$100-M COMPACT-IMPACT COSTS CNMI renews pleas for reimbursement

The government has renewed its call for reimbursement of over $100 million that the United States has owed the Northern Marianas for its assistance to citizens of the Freely Associated States under the Compact agreement.

CNMI officials have presented their testimony to the U.S. House Subcommittee on Asia and the Pacific during a recent hearing in Washington D.C. on the federal financial aid to the Republic of Marshalls and the Federated States of Micronesia as part of the accord.

The testimony detailed fiscal impacts of the Compact to the local coffers from 1986 to 1998, which the island government estimated to be between $80 million to $108 million. Last year, $15 million have been spent using taxpayers’ dollars to assist FAS nationals.

The Commonwealth coughs up an average of $15 million every year to subsidize various social services delivered to citizens of FSM, Marshalls and the Republic of Palau which have forged the agreement with the U.S.

So far, the CNMI has received payment of close to $2.8 million in the form of grants released in 1992, 1993, 1994 and 1995. Island leaders have repeatedly asked Washington for reimbursement of other costs for the past few years due to its economic decline.

The Compact’s impact to the CNMI has come under scrutiny in recent months as Washington re-negotiates the terms of the accord that will expire on 2001, specifically on U.S. financial and program assistance as well as on the so-called “defense veto” and provisions on additional base rights.

Over the past 13 years, the federal government has pumped more than $2.6 billion for FSM and the Marshalls, with $2 billion in direct payment to both governments that Subcommittee chair Rep. Doug Bereuter described with minimal or oversight.

The hearing, held June 28 in the nation’s capital, was attended by several officials, including Susan Westin, an associate director at the U.S. General Accounting Office which conducted an investigation into the Compact’s aid to the two Micronesian countries; Office of Insular Affairs Director Ferdinand Aranza and Allen P. Stayman, special negotiator for the Compact.

New formula

According to Mr. Bereuter, both the U.S. and FAS must reformulate the financial relationship amid changing times, and with greater accountability on the part of the two island nations.

Mr. Stayman, a former OIA director who was designated last year as chief Compact negotiator for the U.S., underscored the need for continued economic assistance to FSM and the Marshalls, while reviewing the migration provision of the agreement.

He said Washington is looking into ways to address the impact of free migration by FAS nationals to the U.S. and its territories, particularly Hawaii, Guam and the CNMI.

One of the solutions proposed will allow compensation to the three jurisdictions for the problems associated with hosting these citizens.

An estimated 3,118 migrants from Marshalls, Palau and FSM were recorded by the CNMI government in 1997, although it believed that the number has increased for the past three years.

The wealthier Pacific governments have protested apparent failure by Washington to reimburse the costs such as education, health, housing and social welfare which it has promised when it signed the agreement in 1986.

Other proposals broached by Mr. Stayman included plan to apply admission requirements, like health and criminal background, for FAS citizens before entering the U.S. soil as well as federal grants to improve health and education in their home countries.