Palau President Surangel Whipps Jr unveiled some of the details of the new economic package under the renegotiated provisions of the nation’s Compact of Free Association with Washington.
Palau stands to receive US$890 million in economic assistance from the U.S for the next 20 years. The Washington-pledged amount was more than double the price that was initially on the table, Whipps said.
“We anticipate that in the next month, we will be signing off on a Compact agreement that recognises the value that the people of Palau have as a sovereign nation, and what we bring to the global stage,” Whipps said in his state of the republic address delivered Tuesday before Palau Congress.
The Compact’s economic provisions are set to expire next year, but U.S. and Palau negotiators agreed to renew them a year ahead.
“The new agreement includes provisions for continued assistance based on negotiations at that point. This will mean we won’t have to solely rely on our Trust Fund for at least the next 20 years,” Whipps said.
The package includes US$5 million a year for infrastructure and another US$5 million a year for maintenance. Currently, Palau is receiving only US$2 million for both infrastructure and maintenance.
The U.S has also pledged six years of funding at US$10 million a year to pay down most of Palau’s Covid-related loans and US$100 million for the Compact Trust Fund to keep it growing.
“Funds a year earlier than scheduled, and get a provision that helps address inflation for the course of the next 20 years,” Whipps said.
“When we first took office, we inherited a package that we quickly realised was unacceptable. That initial agreement would have sent our nation backward,” Whipps said. “It fell far short of honoring Palau’s contribution to the partnership in promoting a peaceful lndo-Pacific region.” The president recalled that his administration was criticised for demanding more than what was offered.
“We were told we shouldn’t be asking for more than they want to give us. We were adamant that we had to stand up for what our people deserve.,” he said. “As a result of our bold request, President Joe Biden appointed Special Envoy Joseph Yun last year.”
As for the nation’s economy, Whipps expressed confidence about recovery.
“In 2022, we are doing better than we initially expected, although tourism hasn’t rebounded as quickly as we had hoped. But we responded quickly to the needs of our community and kept money moving through the community,” he said.
The president said the Covid-triggered fiscal doldrums prompted the government to tighten its belt and cut its budget by 10 percent for two years.
“We’ve started preparing our FY2024 budget and, I have to say, we’re optimistic. We’re looking at US$317 million worth of construction projects for the private sector, local and federal government in the coming years,” Whipps said.
“Of those, US$261 million have either started or will be starting this year. These include the PNCC ‘Fiber to Homes’ project, power grid upgrades, in-road construction, as well as Compact Road repairs, and education and medical facility upgrades.
Whipps noted that more projects, with a combined total of US$53.7 million, are scheduled to start after 2024, including a solar program for the National Development Bank of Palau.
“The ultimate goal of these new projects is to improve or build facilities that support services for our people – better roads make it easier for families to build their homes in Babeldaob, better wireless connectivity makes it easier for families to connect or work remotely and emergency vehicles can easily access homes,” Whipps said.
SOURCE: PACIFIC ISLAND TIMES/PACNEWS