U.S. Ambassador Clyde Bishop said while the Marshall Islands government has been given an additional five years to resolve a stalemate with landowners who oppose an agreement giving the U.S. use of the Reagan Test Site at Kwajalein Atoll until 2066, if there is no sign of progress, the U.S. government could reassess its position sooner.
The military use agreement for Kwajalein is a key part of a Compact of Free Association that provides the Marshall Islands with about $70 million annually through 2023 and islanders with visa-free access to the United States.
“No one wants for this issue to result in creating instability in other areas of the Compact,” said Bishop, who wrapped up a two-and-a-half-year stint as ambassador to the Marshall Islands Friday.
“That is not to the benefit of either nation. But I’m sometimes concerned that it is a possibility.”
Landowners have demanded $19 million annually in rent, while an agreement signed by both governments in 2003 provided $15 million that is now over $17 million annually because of inflation adjustment.
The approximately $4 million annual difference between the current rent level and an earlier agreement is in an escrow account that now has more than $22 million awaiting agreement before it is distributed to landowners.
In December last year, Bishop gained Washington approval to delay for five years a Dec. 17 deadline that required money held in escrow be returned to the U.S. Treasury in the absence of an agreement with the landowners.
The U.S. has used Kwajalein as a military installation since taking it from Japan in World War II.
It was converted to a missile testing range in 1964 and islanders were relocated to accommodate the testing.
The leading traditional chiefs for Kwajalein have rejected the deal signed in 2003.
“We want a deal that is fair for both sides,” said chief and Kwajalein Sen. Michael Kabua.
His older brother, a former president of the country, Imata Kabua, said if the U.S. does not improve its offer, then U.S. use of Kwajalein ends in 2016, the end date of the current lease arrangement that was signed in 1986.
“The U.S. position has been clear for five-and-a-half-years,” Bishop said. “(The rent level) is not up for negotiation. If, for some unimaginable reason, the military use and operating rights agreement is abrogated, it will have the effect of a snowball rolling down the hill. The U.S. economic presence here is significant. To remove it will cause an economic crisis.”
In addition to the approximately $70 million in annual funding the Marshall Islands receives through the Compact, about 900 Marshall Islanders work at the missile testing range at Kwajalein, and the national government receives taxes on the salaries of the 1,000 Americans working there.
An example of the possible spinoff impact if the military use agreement is not extended to 2066 is to open the possibility of the U.S. withdrawing funding provided to a national trust fund that now has over $90 million and is intended to help this country when U.S. grant aid ends in 2023, Bishop said.
“It’s not a requirement that the funding be withdrawn, but it opens the possibility,” he said. “Another element is the post office. If Kwajalein is not here, why is the U.S. Postal Service here? I’m not trying to take a doomsday approach. We’re not going there. But there needs to be an evaluation of the problem. Is it worth the ramifications that can occur?”
Agreement of the Kwajalein landowners “is like the string in a sweater. You pull it out and the whole thing unravels.”
