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MELBOURNE, Australia (April 22, 1998 - PACNEWS/Ioane)---A new study has found that the Marshall Islands and the Federated States of Micronesia will face increased unemployment, more government layoffs and increased migration when the current U.S. level of funding, under 15-year Compacts of Free Association, end in the year 2001.

The study says that neither nation has the resource base to replace U.S. aid, Radio Australia reports.

It also warned that even if the U.S. agrees to extend financial aid, it is certain to be less than the current level.

The study suggests that development projects will not make up for the loss of funding, meaning continued cuts in working hours and layoffs of government workers.

The sale of fishing licenses to Japanese and other fishing nations, it says, will continue to produce some income, but hopes for a tourism boom will not be realized.

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