'Impact aid' for Pacific compact boosted to $30M

By B.J. Reyes
Associated Press

President Bush signed legislation yesterday that renews partnership agreements with two Pacific island nations and provides $30 million to Hawai'i and three U.S. territories to offset the costs of providing for immigrants from those countries, officials said.

The legislation extends for 20 years the agreements, known as Compacts of Free Association, with the Republic of the Marshall Islands and the Federated States of Micronesia.

"It shows the commitment that the government of the United States places on this relationship between the two countries," David Paul, deputy executive director of the Marshalls' Office of Compact Negotiations, said yesterday.

House and Senate lawmakers gave final approval to the legislation last month.

The new compacts authorize the federal government to provide $3.5 billion over the next 20 years to both island nations, with the goal of weaning the two countries from U.S. aid.

Part of the annual appropriations are to be put in a trust fund for each nation that could be tapped as a source of revenue when direct U.S. grant assistance ends with the compacts' expiration in 2024.

"These countries have to move from a long-term dependent relationship upon the United States to a self-sufficiency that shares a common alliance in the Pacific," said U.S Rep. Ed Case, D-Hawai'i. "That concept is a very good one, because I believe these countries know and understand that the system of ongoing payments really can't continue forever."

The United States has contributed an estimated $2.6 billion to the two island nations since the compacts were established in 1986.

The nations, upon termination of the Trust Territory of the Pacific Islands that gave the United States a United Nations' trusteeship over them, negotiated the compacts for Micronesia and the Marshall Islands in 1986. The island nation of Palau negotiated its own 15-year compact in 1994.

The compacts recognize the nations' independence, provide them federal aid and allow their citizens to migrate freely to the United States in exchange for U.S. defense rights, including continued use of Kwajalein Atoll in the Marshalls as a missile testing facility.

Key to getting the new compacts passed was the increase in so-called "impact aid," Case, and others have said.

The Bush administration originally allocated $15 million a year to be divided between Hawai'i, Guam, American Samoa and the Northern Mariana Islands — regions that say they have borne the brunt of providing education, health and other social services for the Micronesians and Marshallese who arrive on their shores.

In Hawai'i, officials say the state spent about $32 million in 2002 providing services for a population of about 7,000 Marshallese, and a slightly smaller number of Micronesians.

"The $15 million per year proposed was just pulled out of thin air," Case said. "We made the case to our colleagues that the amount was a lot higher and it wasn't fair to penalize Hawai'i and the other jurisdictions for the burdens that were placed on us as a result of free immigration."

Micronesia and the Marshall Islands are about 2,500 miles southwest of Hawai'i.