The cabinet’s fast-tracking move to get advice for cutbacks in government spending follows on the heels of President Litokwa Tomeing issuing a government hiring freeze last month as the country’s financial situation continues to deteriorate in the face of a dramatic drop in tax collections since October last year.
Coupled with the decline in tax revenue is the annual reduction by $500,000 of U.S. grant funding under the Compact, now in the sixth year of the 20-year financial package.
The “Comprehensive Adjustment Program Advisory Group” is headed by Chairman Ben Chutaro and Vice Chairman Ben Graham, two Majuro-based consultants who frequently work with the Asian Development Bank on government-related projects in the Marshall Islands.
The Advisory Group is on a tight timetable, with a framework of fiscal and economic adjustment options to be completed in draft form by May 30, and a final report due by June 30 when the work of the group is to wrap up.
Although the timetable could be adjusted slightly, Chutaro said the point of fast-tracking the work is so the recommendations get put on the table quickly and do not end up like other reports for government that sometimes take months or years to complete and then are largely ignored.
The Advisory Group is reporting to Finance Minister Jack Ading.
Other members named by cabinet to the Advisory Group are educator Hilda Heine, Bikini liaison officer Jack Niedenthal, National Training Council director Marie Maddison, businessman Mike Slinger, Bikini Mayor Alson Kelen, Resources and Development Secretary Tommy Kijiner, Jr., Foreign Secretary Kino Kabua, Finance Secretary Jefferson Barton, acting Attorney General Tion Nabau, parliament attorney Divine Waiti, consultant Kevin O’Keefe and a representative of the government’s Economic Policy, Planning and Statistics Office.
O’Keefe, an independent consultant, has been active in the Federated States of Micronesia advising Chuuk and Kosrae on measures to reduce state government expenses, including their workforces, to bring spending into line with revenues.
