Letter From Majuro
Is Compact Two Fair?
Negotiations Leave Islanders Irked
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Marshall Islands Compact negotiators say they believe the United States government has issued its best and final offer for Kwajalein missile range rental payments. Kwajalein leaders say the U.S. rental offer—at $4 million less than their demand—isn’t enough. The issue has sparked a huge internal debate that threatens the new, 60-year missile range agreement worth about $2.3 billion.
In both the Federated States of Micronesia and the Marshall Islands, Compact negotiators realize that they can’t get a nickel more out of U.S. negotiators. For the FSM, U.S. control of spending power coupled with a low financial offer has led prominent politicians to call for FSM Congress rejection of the Compact. In the Marshall Islands, Compact negotiators say that they were prepared to sign off on the Compact were it not for last-minute U.S. demands to amend immigration provisions.
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But the negotiations with both the Marshall Islands and the Federated States of Micronesia have been one-sided affairs with the U.S. refusing to come through with funding that, for it, is truly a drop in the bucket. Both island governments have used U.S.-supported Asian Development Bank economists to develop economic plans for the next 20 years of Compact funding—and then, ironically, the U.S. has refused to provide the level of funding that these economists say is bottom-line necessary.
The problem is more acute in the FSM, where the bottom-line position is $84 million but the U.S. final offer is $76 million a year. The Marshall Islands is seeking $36.6 million per year and the U.S. “final offer” is about $34 million.
The U.S. is also taking control of financial decision making through an economic management committee in which it will command a three-to-two majority.
The U.S. government, which spends $100 million per missile test at Kwajalein can’t find an extra $3 or $4 million annually in its defense budget for Kwajalein rent? Or for the FSM or Marshall Islands governments? It’s not credible.
What the US is telling the Islands is clear: The Cold War is over so the islands are of greatly reduced military value. The Marshall Islands and FSM did not use the money they received properly in the first Compact, so they’re going to pay a price.
In Compact One there was neither the time nor the impetus for serious economic development. Political and strategic considerations—terminating the U.N. Trusteeship, keeping the Russians out of the Micronesian area—took top priority in the 1980s. Now there appears to be an incentive for economic development, but if the governments are forced by U.S. Compact funding policies to drastically reduce services and employment at the outset of Compact Two, will serious development be possible?
The U.S. is unwilling to provide a few million dollars more to its staunchest of allies, but it is spending tens of billions of dollars to attack Iraq, and planning to inject billions more to put Iraq back together again.
A one-way relationship is not what the first Compacts of Free Association intended. But clear away the rhetoric and that’s the view from Washington: Take it or leave it. And Washington is counting on the two nations’ inability to do the latter.
