MARSHALL ISLANDS BUDGET TO INCREASE BY 30 PERCENT IN 2002

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MAJURO, Marshall Islands (August 10, 2001 – Marshall Islands Journal)---Finance Minister Mike Konelios introduced a $106.5 million budget into the Nitijela Monday – a budget that represents about a 30 percent jump compared to last year’s RMI national budget.

Konelios said that there is more money available for the new fiscal year, starting October 1, because Compact debts – totaling about $20 million annually – have been paid off and Compact funding for 2002 and 2003 increases slightly.

In addition, he announced that the government is planning to amend the import tax law to increase it from the present five percent to nine percent.

Konelios indicated that the government’s cash flow situation was improving as the government enters into the transition period to a new Compact.

He said that a key goal of the government is improving education and human resource development in the country through investment in education and related areas.

He added that the government was supporting a large investment in Tobolar to establish improved refining capability as one aspect of an effort to lift the declining per capita income levels in the RMI.

Key features of the new budget include:

· $14.5 million in Compact funding and $1 million in Asian Development Bank loan to go into the RMI’s national trust fund.

· $10.4 million for interagency development projects (combined U.S. Compact and Republic of China funding).

· A significant increase for Ministry of Education from last year’s $11.7 million to $15 million, which includes at least $1.4 million for renovations and facilities.

· Funding for expansion of staff and equipment at both Majuro and the soon-to-open Ebeye hospitals.

The primary sources of funding for the budget are:

· Compact: $47,832,400 (includes Kwajalein funding).

· U.S. grants: $7.8 million.

· ADB: $11.6 million.

· Republic of China/Taiwan: $10 million.

· Local taxes (income, import and gross revenue tax: $18 million.

· Fishing rights: $2.4 million.

· Ship registry: $1.4 million.

U.S. Compact and other federal grants account for more than 52 percent of the total budget.

Another reason this budget is bigger than last year’s is that the 2001 budget included the $18 million in annual nuclear compensation funding, artificially inflating the budget to $97.5 million. Without the nuclear funds, last year’s budget would have been at just $79.5 million, or some 30 percent lower than this year.

The Marshall Islands Journal, Box 14, Majuro, Marshall Islands 96960 E-mail: journal@ntamar.com  Subscriptions (weekly): 1 year US $87.00; international $213.00 (air mail).

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