A re-negotiation of the Compact’s financial provisions may not even be forthcoming, he added.
Palau “graduating” from these provisions is the “default option,” O’Keefe said.The provisions, which provide Palau with $13 million in annual subsidies and grants, will expire in Oct. 2009, and President Johnson Toribiong is hoping that the U.S. will continue providing financial aid.He admits that Palau is racing against time and he cannot say when the U.S. is willing to sit down with Palau.Palau, he added, has been given the “signal” that there is a counter offer “but we do not know what it is.”“The U.S. at this time is in deep economic recession — they will be less generous in extending financial assistance,” Toribiong said.“The global meltdown is a major challenge and we have to face it.”According to Toribiong, the U.S. has not made any response to Palau’s request for a review because the office that will deal with it has yet to be organized by the new administration in Washington, D.C.Toribiong, however, is hopeful that there will be a renegotiation because “the U.S. recognizes Palau as its special friend.”Palau will still need U.S. financial assistance at least for the next few years, he said, given the dip in its Compact trust fund earnings due to the volatile global economy.
