The economic prospects of most COFA nations are limited. But their military importance to the U.S. is growing.

By Chad Blair /

When the United Nations passed a resolution last week denouncing the U.S. decision to recognize Jerusalem as the capital of Israel, 128 nations voted in favor and 35 countries abstained.


Only seven countries joined the U.S. and Israel in supporting the controversial move, and three of them have important ties to Hawaii: Palau, the Marshall Islands and the Federated States of Micronesia.

The three Micronesian nations are particularly dependent on American largesse. Known as the “freely associated states” because of their unique treaty status with the U.S., they depend on over $200 million a year in direct federal assistance.

A writer for Middle East Eye, Ali Harb, made note of the Trump administration’s threat to cut off aid to nations that voted against the U.S.

Palau, the Republic of the Marshall Islands and the FSM — the later two poor nations with few resources — need that money. As Civil Beat reported in its series The Micronesians, the Marshalls and the FSM are especially lacking in sustainable economic opportunities.

And that’s not likely to change anytime soon.

A recent World Bank presentation on the economic possibilities of the three countries was given to the U.S. Department of the Interior, which administers and oversees federal assistance in the Compact of Free Association nations.

Tourism and fisheries hold the greatest potential for growth. Improved internet access would help increase productivity.

But there are also prosperity risk factors such as noncommunicable diseases and climate change.

In a press release after the presentations, which were in Washington, D.C., in October, U.S. Interior Assistant Secretary for Insular Areas Doug Domenech said the presentations were “meant to inform and encourage policy discussions for the U.S. government and the governments of the FSM, the RMI, and Palau. We are committed to the partnerships we have under the Compacts of Free Association and to working collaboratively towards enhanced social and economic development for the people now and into the future.”

Meanwhile, many islanders (primarily from the Marshalls and the FSM) continue to emigrate to Guam, Hawaii and the continental U.S. seeking jobs, health care and education.

Palau’s Compact Renewal

It may be coincidence, but it’s worth pointing out that just days before the UN vote, the Palau Compact Review Agreement was approved by Congress as part of the fiscal 2018 National Defense Authorization Act.

Unlike the RMI and the FSM, Palau’s federal funding had stalled, despite a 2010 agreement between Palau and the U.S. The new defense budget implemented the agreement and provides nearly $124 million to the island nation. Financial assistance will total $229 million through 2024.

Funding to all three nations is set to expire at that time, and it’s not clear whether the treaties or some sort of funding agreement will be extended. But there are indications that a relationship might well continue.


For one, the relationship is long and historic. It began during the occupation of the Pacific region by Imperial Japan.

Major fights during World War II included the American conquest of Kwajalein in the Marshalls, the sinking of much of the Japanese fleet in Chuuk and the Battle of Peleliu in Palau.

Those seismic events are not well known to most Americans. Somewhat better known is the horrific U.S. nuclear testing in the Marshalls in the 1940s and 1950s.

The compact known as COFA allows residents of the three nations to freely travel to the U.S. and live and work here indefinitely. In return, the U.S. has full defense control of the 2 million square miles of ocean that comprise the region.

On a related note, the 2017 documentary “Island Soldier” shows how many Micronesians proudly serve in the U.S. armed forces.

Enter Kim Jong Un

Americans’ awareness of the COFA nations may be increasing, thanks to Kim Jong Un. As Scott Leis wrote in The Diplomat last week, “recent events in the Western Pacific are finally challenging the minimalist thinking about these Freely Associated States.”

Leis explained:

In July, nearly four months after North Korea conducted a series of ballistic missile tests, the United States submitted a proposal to the Palauan government to install a series of radar towers among Palau’s islands. The Air and Maritime Domain Awareness project hopes to monitor air and maritime traffic in the vicinity of Palau.

Leis notes that, two months ago, the U.S. formally notified Palau of its “intent to exercise its right, under the existing COFA, to use additional lands, beyond those initially designated for the radar.” That led to a meeting in Honolulu “to work out the technical details, at which time U.S. negotiators pledged to complete the Compact renewal.”

Leis continues:

More tellingly, the 2018 NDAA also requires the secretary of defense to commission a review of U.S. security and foreign policy interests across all three Freely Associated States…

The study will examine “the role of the Compact of Free Association in promoting United States defense and foreign policy interests, including the United States defense posture and plans” and “the economic assistance practices of the People’s Republic of China in the Freely Associated States and the Pacific region.”

Put another way, North Korea and China are forcing America to appreciate and re-evaluate the strategic importance of Micronesia. Kwajalein today is the location of the Ronald Reagan Ballistic Missile Defense Test Site. And Honolulu is home to the U.S. Pacific Command.

Based on the enormous volatility of world events over the past two years, it’s virtually impossible to guess what might come next.

For now, though, Micronesian’s profile seems a little bit higher on the international stage. [/restrict]