“Actions we took on our own to help ourselves made the decision easy, I believe, for United States to agree to the amendment of Compact,” asserted President Tommy Remengesau Jr. after Palau and United States Officials formally signed the agreement on Wednesday amending the Compact of Free Association Section 432 Review (Compact Review Agreement).
Remengesau emphasized that Palau had taken positive steps on its own to improve its financial status. “We have paid the $10 million deficit on our own. We worked with OEK to create our own road maintenance fund and we have created our own reserve fund,” expressed President Remengesau Jr.
Moreover, Palau’s own performance shows no deficit and have had consistent surplus each fiscal year according to President Remengesau.
United States Government and the Republic of Palau agreed to amend the terms of the Compact of Free Association Section 432 Review which was signed on September 3, 2010 in Honolulu, Hawaii (the Compact Review Agreement).
The amendments did not change the total amount of the funding agreed upon in the 2010 agreement but amended the distribution of funding for each section.
Such amendment include increasing the money to Compact Trust Fund from $30 million to $65.25 million. This investment at projected 5.5% growth each year is expected to reach over $300 million by year 2045, ensuring continued support of Palau government operations.
It also put $14 million of the $28 million infrastructure maintenance fund into the Infrastructure Maintenance Trust Fund to be matched by $150,000 contribution of Palau every quarter.
In addition, $22.106 million in direct assistance will be provided as soon as the agreement enters into force. $20 million infrastructure grant will be made available for approved infrastructure projects.
Other terms and conditions remained such as the process for utilizing Infrastructure maintenance fund and the Capital Improvement Projects funds. Prior approval of the projects by US government is still required and payments will be based on reimbursement process. (L.N. Reklai)