Walking the talk…we are not

It is becoming common to say one thing and do the opposite. Such behavior is self-defeating and counterproductive to individuals but more so at higher levels of organizations and government.
Palau’s 2022 Economic Brief, published by Graduate School USA, gives a bleak picture of Palau for this year and the next until the projected recovery in 2024 – 25.
It reports that the Palau government will need about $103 million in financing to carry it through to FY 2024 to maintain operations. It expects external debt to rise to 92% of the GDP and inflation to reach 13.7% this year.
It went further to say that the economic outlook for Palau “looks bleak” until 2025, when tourism has recovered.
The report states that State-Owned Enterprises such as PPUC have grossly underperformed, and public financial institutions such as Social Security Administration and Civil Service Pension Plan are “unsustainable and pose a significant fiscal risk.” Noting Social Security Administration as an example, it states, “A recent actuarial evaluation of SS incorporating recent awards of unfunded benefits found that the system was at risk of collapse by the end of the decade.”
“Actuarial evaluation indicates SS is in a rapidly deteriorating financial position. Until the recent actuarial assessment, the conventional wisdom had been that the SS system was on an even, if not fragile, keel. The revised assumptions, especially concerning the need to incorporate the two remaining unfunded supplemental benefits into the evaluation coupled with a lower rate of return on investments, turned the outlook from cash-flow balance into a rapidly deteriorating financial position,” noted the Palau 2022 Economic Brief.
The report cited solutions and plans that have been put in place to mitigate the crisis and lead Palau toward recoveries, such as the adoption of RPPL 11-13, the Fiscal Responsibility Act and the Debt Management Act.”
The Fiscal Responsibility mandates include “ensuring State Owned Enterprises and Public Financial Institutions are managed to deliver services on an effective and financially sustainable basis and manage fiscal risks and contingent liabilities prudently.”
But saying we will do something or passing a law to enforce a mandate is not as easy as it sounds.
For example, OEK passed the Fiscal Responsibility Act but later added language into the budget law to mandate Social Security Administration pay supplemental benefits that were considered “unfunded benefits” and posed a risk to SSA Fund.
The SSA Board tried to stand its ground, protecting the Fund as their fiduciary duty demands. They were sued and threatened with a resolution calling for the firing of the administrator and removal of the Board chairperson. (Resolution passed the House but Senate has not acted on it.)
The SSA Board members moved to unseat their chairperson and fire the SSA administrator for the decision that they, as a board, approved to please congress.
These counter-productive and undermining actions are not unique to Social Security Administration. The continued undermining of our public institutions, saying one thing but doing the opposite, only further weakens our already battered economy, affecting our well-being today and the generations to come. (By: L.N. Reklai)