CRA to include funding for FY 2024
President Surangel Whipps Jr. said the approach they had going into the negotiation of the economic review of the COFA was based on a mutual and equitable relationship between Palau and the United States.
He said that Palau gave the US perpetual defense rights, but US economic assistance has an ending date. “The perpetual defense rights have value,” said Whipps adding that they sought continued assistance beyond 2044, the expected “graduation” of Palau from receiving financial support from the US under the Compact.
“We can look at US military use of our country as another source revenue into our economy. They continue to use the country beyond 2044, then financial support to Palau should also continue beyond 2044,” said Whipps at press conference on Wednesday.
Specifics of the Memorandum of Understanding signed last month in Los Angeles, California., will be revealed after US President Biden has submitted his budget bill to US Congress, reported Whipps during a meeting with Palau National Congress on January 31, 2023.
Although specific numbers were not revealed, Chief Compact Negotiator Kaleb Udui Jr., shared some pertinent information, including additional funding for FY 2024, which begins this October 1st, 2023.
Even though the new agreement technically will take effect in FY 2025, Palau’s negotiating team sought a financial package for FY 2024, a year earlier.
“They understand that Palau was impacted by COVID and the recovery is slow. We’ve taken a lot of loans to fund our operations and cannot take out more loans. In addition, next year, all the loan payments that were deferred will be up for payment, and they agreed to our request,” said Whipps.
Under the new Compact Review Agreement (CRA), the US federal grants Palau currently access will continue. Under the 2009 CRA, those are set to expire in FY 2024. In addition, other federal grants like FEMA that Palau had not been able to access since 1994, under the new CRA, will be able to access again.
The package still has to go before the US Congress as part of the US national budget bill. The expected date of signing the new Compact Review Agreement is April 2023.