Palau still needs direct funding and programmatic assistance from the U.S., he added.
The $18 million financial aid provisions of Palau’s Compact of Free Association with the U.S. will lapse this September, but Palau is asking for at least a one-year extension.In a letter to Alcy Frelick, the director of the U.S. State Department’s Office of Australia, New Zealand, and the Pacific Islands Affairs, and head of the U.S. review committee, Toribiong said reductions in local government costs can only be implemented gradually.“The process of reduction that I contemplate cannot be achieved prudently overnight. It is a complex problem and its implementation must balance the cost of providing the services against the critical needs of my people for employment, and the provision of essential government services such as education, health and public safety,” Toribiong said.Palau’s economy is suffering, he added. Tourism is down by 10 percent, sales have plunged, jobs are being lost and apartments and commercial buildings sit vacant with no prospect of occupancy, Toribiong said.The U.S. and Palau, he added, “share a close and special relationship’ and that the two countries have become the best and closest of friends and allies.”Palau’s request for a one year extension is now pending in the U.S. Congress.
