Pacific Magazine > Daily News

Marshalls Extends State Of Emergency

By Giff Johnson on Majuro
Sunday: August 17, 2008

The state of economic emergency in the Marshall Islands has been extended for another 30 days by the country’s Cabinet.

The National Disaster Committee had recommended extending it beyond the early August expiration of the initial 30-day emergency declaration, according to the government’s Chief Secretary Casten Nemra.

The state of economic emergency was declared primarily because the country has had difficulty paying the costs of imported diesel for its two main power plants at Majuro and Ebeye. The two power companies are collecting an average of about $1.3 million per month in revenue from power users, but the cost of buying the diesel to operate the two power plants is more than $2.8 million per month. The government has been forced to reprogram funding for other projects to purchase fuel.

A fuel shipment was ordered last week and is expected to arrive next weekend with enough fuel to supply the country's power plants through October.

As a result of the emergency, the government early last month put a freeze on spending from its General Fund, which accounts for about a quarter of its annual national budget.

Another result of the initial phase of the emergency is an assessment on government facilities for retrofitting and energy conservation installation was completed, Nemra said. The state of emergency is also being used to promote energy conservation.

“The energy crisis remains a potential threat to the fragile economy and social development of the RMI,” Nemra said in a statement issued at the weekend. “Government shall continue to implement the necessary measures to safeguard the nation and minimize the adverse impacts of high prices of imported food and fuel.”

To cut costs of imported food, the government on Friday introduced legislation to exempt rice, flour, poultry products, fruits and vegetables, milk and some other food products from the standard five-to-eight percent import tax. Several legislators called for fast-tracking the amendment to the import duties law to bring relief to consumers who have seen the price of a 20-pound bag of rice skyrocket from $7 per bag early this year to about $16 this week.