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By Colin Woodard

YAP, Federated States of Micronesia (December 27, 1999 – Christian Science Monitor)---Washington's hands-off approach to the grant payments it has sent to the Marshall Islands and Federated States of Micronesia (FSM) over the past 15 years is widely regarded as a failure.

Those grant payments to the former U.S. wards will expire in 2001, and sources in all three countries say the United States has a chance to set things right as it negotiates the provisions.

"The U.S. is willing to help us, but there should be more restrictions on how we spend the money," says Vincent Figir, governor of Yap State, which is considered the most effective government in the region.

"There wasn't enough accountability or strings attached (to the U.S. money)," Figir said. "Far too many people decided they would benefit personally."

U.S. negotiator Allen Stayman has been sending a similar message.

"We want to know what happened over the last 13 years before we make any decisions about the future," Stayman said.

Key congressional leaders have asked the Government Accounting Agency (GAO) to go to the region and assess how the U.S. grants were spent. Until the GAO gets answers, Stayman said it's "premature to be talking about future aid."

Sen. Peter Christian, the FSM's negotiator, said his country welcomes the opportunity to explain itself.

"We spent the first 10 years of the Compact just organizing a system of government," he said. "Now we have the time, experience, and institutions to focus on economic development.... I think we're on the right track."

Former FSM Foreign Minister Asterio Takesy said the U.S. should place future money in a trust fund, rather than make annual payments.

"Not just the FSM, but any child that is trying to establish itself should be given room to make mistakes so that it can grow from them," he said. "If you keep spoon-feeding us we will never become self-reliant."

Marshall Islands officials have taken a tougher stance, arguing it's none of Washington's business what they do with the money. They say it's not foreign aid because the U.S. gets extensive military rights and access in return.

The Marshall Islands' more antagonistic stance reflects a strong bargaining position. Unlike the FSM, the Marshalls have something the U.S. wants: continued base rights at Kwajalein Atoll.

The $4 billion Kwajalein Missile Range is currently the only place in the world where the U.S. can test components of the newly revived National Missile Defense program.

A recent change in governments isn't expected to alter the Marshall Islands' negotiating strategy. But it may soften the rhetoric. Negotiations with both countries are scheduled to continue this year.

The Republic of Palau, another part of America's once vast Pacific Trust Territory, became independent in 1994. Its grant payments won't expire for another eight years. The remainder of the Trust Territory - the Marianas Islands - chose to become a U.S. commonwealth, similar in status to Puerto Rico.

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