Better Management Of FSM Compact Funds Discussed
Proposed JEMCO To Oversee $91 Million Compact Fund
by Jasmine Henry
PALIKIR, Pohnpei (The Kaselehlie Press): May 30 - June 12, 2002 - A new system is being discussed during Compact negotiations in the hopes of better management and enforced accountability of Compact funding.
According to His Excellency Larry Miles Dinger, U.S. Ambassador, the amended Compact will be targeting several areas, which will be education, health, infrastructure, the private sector, the public sector through capacity building, and the environment.
A new monitoring system is also being discussed in which a Joint Economic Management Committee (JEMCO) will be created. JEMCO would be comprised of both local and U.S. representatives with U.S. holding a slight majority. Its sole purpose is to ensure that Compact funds are being managed and used properly by being the body that gives the final approval on where and how Compact money is to be used an ensuring that accountability is enforced.
JEMCO would have considerable authority, as it will control how Compact funds will be used in areas such as migration, defense, and administration.
Another new amendment will be the Trust Fund. According to Ambassador Dinger, in 2004, the U.S.'s proposed $91 million will be divided into $72 million as grant money and $19 million going directly into the Trust Fund. This will continue until the year 2023, with the grant money diminishing every year by $1 million and the Trust Fund increasing every year by $1 million. The U.S.'s one stipulation is that in the year 2004, the FSM government must deposit $30 million into the Trust Fund. The $30 million is to be taken from the Compact bump-up money, which was given to the FSM by the U.S. during the negotiating period of the Compact.
When questioned as to whether or not he believed the FSM could find $30 million by 2004, Ambassador Dinger replied, "My understanding is yes, it can be done and it requires some political will but that's why the politicians were elected and they can do it."
According to Ambassador Dinger, the "new" Compact is not new. Rather it is an amended version of the Compact. "The Financial Provisions of the compact are expiring and need to be renewed," he said, explaining that the Compact itself has no expiration date.
When asked why, in light of reports documenting evidence of misuse of Compact funds, the U.S. was willing to continue with the Compact rather than terminate it, Ambassador Dinger replied, "I don't think we would be doing it if the oversight and accountability weren't going to be (in the Compact.)"
The U.S. "owes it to the people of the FSM," especially after almost 40 years of trusteeship, he continued. Also said Ambassador Dinger, the defense rights were important. Since the end of the cold war, he explained, the FSM had lost some of its defense importance, but since the September 11th incidents, the FSM, from a strategic point of view, has again become an area of strategic importance.