President Johnson Toribiong refused to divulge the amount but he said the financial package will deplete the Compact Trust Fund by Year 2017.
Palau has been getting at least $13 million as direct assistance from the U.S. under the Compact. The agreement also allows Palau to withdraw $5 million every year from the Compact Trust Fund.
The economic provision of the Compact expired, Sept. 30. Palau is awaiting US Congress to pass its 2010 budget which contains earmarked funding assistance to Palau for at least one more year.
The requested extension is independent from the ongoing review.
A Compact review is scheduled in Palau on Oct. 18, former United States Charge d’ Affaires Mark Bezner said that the US group wants to conclude the talks next week.
Bezner said under the review, Palau will continue access to federal programs such as in the areas of education, postal services, airport maintenance and health.
“Some aspects of the review have been difficult. Palau and U.S. on some aspects have different points of view,” Bezner said.
Toribiong said in the last meeting with US advisory group headed by Alcy Frelick , Director of the Office of Australia, New Zealand and Pacific Island Affairs and head of the United States Compact review group, Palau was given four options; accept the U.S. offer, U.S. will decide for Palau unilaterally, conclude the review as inconclusive or Palau give the U.S. a fourth scenario.
The president said based on the analysis of Palau’s Compact advisory group the amount is “not necessarily unreasonable but analysis shows that it will not sustain the level of government services into the future.”
He said Palau’s advisory group headed by Chief Representative Ambassador Joshua Koshiba is preparing economic data and the country’s own financial analysis of the U.S. offer for the upcoming review.
“The advisory group is reviewing the adequacy of what has been offered,” Toribiong said.
He said the performance of the Trust Fund is not what they have expected.
Toribiong said that after 2009, Palau is allowed to withdraw at least US$15 million from the Compact Trust Fund. Palau’s Trust Fund now amounts to over US$130 million.
