President Johnson Toribiong refused to divulge the amount but he said the proposed financial package will deplete Palau’s Compact Trust Fund by 2017.
Palau has been getting at least $13 million is direct assistance from the U.S. under the Compact which also allows the island nation to withdraw $5 million every year from its Compact Trust Fund.
But the Compact’s financial aid provision expired last Sept. 30 and the U.S. Congress has yet to pass the FY 2010 budget which includes an extension of Palau’s funding assistance for at least one year.
Starting next year, Palau is allowed to withdraw at least $15 million from the Compact Trust Fund which currently amounts to $130 million.
A Compact review was scheduled in Palau on Oct. 18.
The U.S. Embassy’s former charge d’affaires, Mark Bezner, said Palau will continue to have access to federal programs in 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 the U.S. advisory group headed by Alcy Frelick , director of the State Department’s Office of Australia, New Zealand and Pacific Island Affairs, Palau was given four options: accept the U.S. offer, the U.S. will decide unilaterally, conclude the review as inconclusive; or Palau gives the U.S. a fourth scenario.
Toribiong said based on the analysis of Palau’s Compact advisory group, the amount proposed by the U.S. 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 former Sen. Joshua Koshiba was preparing economic data and a 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.
