Presidential candidates say they will use $40 million loan to balance budget

$40 million dollar concessionary loan is made available by the Asian Development Bank (ADB) for the new government to use with certain conditions. Both candidates are well aware of the conditions and plan to seek other alternatives so that they can minimize the usage of the loan.
Both presidential candidates, Surangel Whipps Jr. and Raynold Arnold Oilouch, at the Palau Media Council’s first meet-the-press event last week were asked if they would use the $40 million dollars available to them to balance the national budget in FY 2020 and FY 2021.
“I am the Compact negotiator and would request the United States of America to help us with funds especially during these harsh times of COVID. If the request does get approved, we will not need to use up the $40 million loan or we will be able to minimize the usage.” said candidate Arnold Oilouch.
Mr. Oilouch also adds that it is a pretty rough time for Palau and we can also turn to our friends and allies for assistance and support. Mr. Whipps Jr. also agreed with Oilouch on using the loan money, implementing reforms while seeking other alternatives.
“We need to revive our tourism economy despite the fear of COVID entering Palau. We start implementing steps to help us begin with low risk countries like Taiwan” said Surangel Whipps Jr.
“If it becomes necessary, for example Republic of China-Taiwan who gives us a 10 million a year for infrastructure development, we can ask them to use that money to help develop our country and government” an alternative example Mr. Whipps jr. provided in asking funds from friends of Palau.
Mr. Whipps Jr. also said “No doubt that developing new revenue sources will take time for the republic of Palau. We must rely on the resources we have and implement legislations on those condition of the 40 million from ADB loan so our government doesn’t fall short, as well as take those 5 million from FEMA that have accumulated to help us whilst negotiating with the compact. The money in the trust funds of that compact is ours and not theirs so we can separate that and use it to help us. If it becomes necessary like for example Taiwan who gives us a 10 million a year, we can ask them to use that money to help develop our country and government.”
Both presidential candidates promote opening up tourism in some form.
The new government upon taking office next year has three (3) months to come up with budget for remaining 6 months of 2021. The FY 2021 is projected to feel a $36 million local revenue shortfall and this administration, through approval of OEK, had secured $60 million loan from ADB to help with FY 2020, FY 2021 and part of FY 2022 budget. The loan is a concessionary learn and will require at least two policy changes to occur in order to draw the down the final $20 million. The two policies are tax reform and debt ceiling policy.