By Nic Maclellan in Majuro, Marshall Islands 

Republic of Marshall Islands President, Hilda Heine, has questioned whether the Marshalls have reached a crossroads in its relationship with the United States.

As Marshallese gathered to commemorate Nuclear Victims Remembrance Day on 01 March – the 70th anniversary of the U.S Bravo nuclear test on Bikini Atoll – President Heine stood before the crowd to make some pointed comments about the delay in the Compact of Free Association (COFA) funding: “When we are told that there is ‘wide bipartisan praise’ for the agreement, yet the United States Congress fails to pass the legislation necessary to turn on the funding taps linked to our agreement, and instead goes on vacation for the next two weeks, leaving us high and dry, it begs the question whether we are now at the crossroads with our relationship with the US,” said Heine.

Sitting next to the US Chargé d’affaires, the RMI President pointedly suggested that there are other regional players who are eager to build ties with her nation: “At some point, our nation to needs seriously consider other options available to us if the U.S is unable or unwilling to keep its commitments to us. Our nation has been a steadfast ally of the United States, but that should not be taken for granted.”

Growing dysfunction in the US Congress has led to delays in funding for three Micronesian states, raising concern about Washington’s commitment to partners in the northern Pacific.

Last year, the U.S government renegotiated and signed updated political framework agreements known as Compacts of Free Association (COFA), with the Republic of the Marshall Islands (RMI), Federated States of Micronesia (FSM) and Republic of Palau.

Since then, however, the US Congress has failed to pass legislation that would begin the transfer of US$7.1 billion dollars pledged to the three Freely Associated States over the next twenty years.

In recent months, the presidents of RMI, FSM and Palau have repeatedly called on the U.S Congress to fund the commitments made by President Joe Biden’s administration – with no success. In recent days, there have been suggestions that U.S lawmakers will add riders to other legislation in order to approve the funding, but there is still no guarantee that the Congress will deliver.

Speaking to Islands Business at her office in Majuro, RMI President Hilda Heine expressed concern that the delay to finalise COFA funding raised doubts about the long-standing US partnership with the Marshall Islands.

“We’re concerned that the relationship is not as appreciated as it could be,” she said. “We’re told that we’re one of the closest allies of the United States, and yet it’s taken time to get this agreement solved.”

Forging the Compacts

At the end of the Trust Territory of the Pacific Islands (TTPI) – the post-war United Nations strategic trusteeship in the northern Pacific – the three Micronesian nations moved into a new political relationship with the United States, signing Compacts of Free Association with their former colonial power. First adopted in 1986 (for FSM and RMI) and 1994 (for Palau), the Compacts have been revisited and upgraded in subsequent decades.

The Compacts guarantee migration rights for Micronesians into the United States, access to a range of U.S federally-funded programs and grants towards local services in health, education and other sectors. In return, the U.S government gained unprecedented powers over defence, security and foreign policy, which allows Washington to maintain a policy of strategic denial across the northern Pacific. Under the Compacts, “the Government of the United States has full authority and responsibility for security and defense matters in or relating to the Marshall Islands, the Federated States of Micronesia and Palau.”

Last year, U.S COFA negotiator Ambassador Joseph Yun finalised talks on the latest versions of the three Compacts. In May 2023, the United States signed agreements for the next 20 years with FSM and Palau. Agreement on a 20-year economic assistance program for the RMI was delayed until October, in part because of unresolved issues over compensation for the nuclear legacies of 67 US nuclear tests at Bikini and Enewetak Atolls.

Under the new deals, the Biden administration pledged US$7.1 billion COFA funding over the next twenty years, to be shared between the three Micronesian states. Funding was supposed to commence on 1 October 2023 – the start of the US fiscal year – but five months on, the US Congress has repeatedly failed to appropriate the necessary funds.

Even as they allocate billions of dollars for conflicts in Ukraine and Palestine, the U.S Congress failed to include any COFA finance in the 2024 National Defence Authorisation Act. Weeks later, they again failed to include funding for the three Compacts in a separate Senate supplemental bill. Reports from Washington now suggest the House of Representatives may attempt to address the issue later this month, but the lengthy delay is raising concern across the islands region that some U.S pledges are not worth the paper they’re written on.

Heine takes the reins

Hilda Heine served as RMI president between 2016-2020, the first woman elected to head an independent Pacific Island nation. Her successor, President David Kabua, led the process for Compact re-negotiation, but after November 2023 elections for the RMI Nitijelā – the local parliament – Heine returned to office for a second term. She was re-elected as President of the Republic of the Marshall Islands on 02 January this year, defeating Kabua by one vote in the 33-member legislature.

President Heine now faces a fiscal crisis. The U.S Republican Party has a very narrow majority in the U.S House of Representatives, which means that policy initiatives can be blocked by a group of conservative extremists known as the Freedom Caucus. This group ousted former House Speaker Kevin McCarthy (a member of their own party) and has repeatedly stymied policies advocated by U.S President Joe Biden and the Democratic Party. As Biden heads into this year’s presidential contest with Republican leader Donald Trump, domestic political brawls will continue to disrupt agreement over key bills before the U.S Congress.

These dramas in Washington reverberate across the Pacific.

President Heine told Islands Business that the Marshall Islands was pressed to finalise the revised Compact by 01 October 2023 (the start of the financial year in the U.S government’s annual budget cycle).

“We’ve negotiated in good faith,” she said. “Last year, we asked if we could lengthen the negotiation process to give us more time to get our thoughts together and find the information that we need to sit across from them and negotiate. But they told us that ‘time is running out – we’ve got to get everything done by 01 October, or we won’t get any funding.’”

“The fact is that they rushed us, so we rushed. The former [Kabua] government went ahead and signed the MOU with the United States. Now, we’re sitting here and asking ‘what’s going on?’ How come we were told that time was running out and we have to get this done, but now we’re having to wait?”

Despite the range of global crises facing the United States, the U.S Congress has not yet passed its fiscal year budget for 2024. To avoid a government shut-down, the US Congress approves payments under a stop-gap funding measure called a continuing resolution.

President Heine said the U.S and Micronesian states are working on a new continuing resolution, “as the current one ends on 01 March. We don’t know what happens after that. We’re hopeful that there will be another continuing resolution so that funding can continue to come and support us through this fiscal year. Not knowing what the future holds for us gives us great uncertainties.”

She highlighted the concrete problems facing her new government, as it seeks to maintain government services without any timeline to guarantee RMI’s share of the COFA pledge.

“If 01 October comes again this year and there is still no agreement, we don’t know if a continuing resolution can save us,” she said. “Right now, we’re drawing from our RMI Trust Fund, with the understanding that the U0S will reimburse us. But I don’t know what’s going to happen next year. We’re talking about salaries for teachers and health assistants and school lunch programs – the everyday operation of a government. So this affects everyone.”

Asked if the Micronesian states have been forgotten at a time of global crisis – from Russia’s invasion of Ukraine to the Israeli massacre in Gaza – President Heine said “we don’t like to think so, but their actions are saying otherwise.”

“There are a lot of promises, with people saying the right things about the relationship and how important this region is to the security of the United States,” she added. “Everyone says they’re on our side and all the right things are being said, but here we are…that puts lots of questions in our minds.”

Billions for military expansion

The delay over COFA funding comes at the same time the Biden administration has expanded its military and security budget for the vast region covered by the Hawai’i-based U.S Indo-Pacific Command.

At a time of strategic competition with China, the U.S government has increased funding for a range of military and security projects around the region. Under the FY24 National Defence Authorisation Act, multi-billion investments have been committed for new military facilities and equipment: the expansion of naval shipyards at Pearl Harbour Naval Base; planning for radar systems in Palau and missile-defence systems in the U.S territory of Guam; the renovation and upgrade of airstrips on Tinian and other islands in the Northern Marianas, to allow dispersal of US forces from Guam in times of crisis; and upgrades to military installations including Hickam Base in Hawai’i and Camp Blas, a new base in Guam for US Marines re-deployed from Okinawa.

This extensive military spending stands in stark contrast to the continual blockage on climate finance in the U.S Congress, which has failed to allocate the full funding required to meet the Biden administration’s pledges to developing nations and multilateral funds like the Green Climate Fund (GCF).

In April 2021, then RMI President David Kabua was invited to Washington to attend Biden’s Climate Action Summit. The US President made a series of climate pledges, announcing plans to double America’s international climate finance to US$11 billion annually by 2024. As part of this goal, his administration pledged to triple the amount committed to climate adaptation by 2024.

However despite multi-billion-dollar funding for domestic climate and energy projects under Biden’s 2022 Inflation Reduction Act, the U.S Congress has repeatedly refused to commit the full funding pledged for overseas programs. As we move into 2024, these pledges have drowned in the rising seas that surround low-lying atoll nations.

In the Marshall Islands, President Heine says that the climate emergency remains a central priority for her new administration: “Right now, we just approved our RMI National Adaptation Plan. That’s going to be a big item on our agenda going forward, because we need to make sure we can raise the money necessary to do adaptation.”

Beyond RMI’s long-standing efforts to increase funding for adaptation and loss and damage, “the other issue is the need to continue campaigning internationally with big emitters, to cut down their emission levels. We know that 1.5 degrees is going out the door pretty soon, if the world doesn’t do its share of controlling emissions, especially rich countries.”

The RMI government launched its National Adaptation Plan at COP28 last December, but President Heine is also looking towards longer-term transformation. Can the low-lying atoll nation afford to build new infrastructure and raise land to protect communities from sea level rise and storm surges? Heine acknowledges this will require difficult cultural conversations with landowners, customary leaders and affected communities.

“There’s a lot of things to be done, including changes to land systems,” she said. “If we’re going to raise land, there’s an issue as to where we’re going to raise it. A lot of talking with communities needs to take place. Of course, we cannot raise all the islands – we have 29 atolls and 22 of them have communities. We can’t raise all of them to make sure all the people are safe – so we will have to make some hard decisions down the road, to determine what islands should be saved and what islands to let go. It’s not going to be easy, we know that, but we have to do what’s needed.”