TAIWAN BAILS OUT MARSHALLS WITH $2.5 MILLION

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MAJURO, Marshall Islands (Marianas Variety, Mar. 3) - Marshall Islands Finance Secretary Saeko Shoniber breathed a sigh of relief this week after the Taiwanese ambassador turned over a check of more than $2.5 million to the government. The ministry had been facing cash-flow problems while waiting for reimbursement of funding from both the Taiwan and United States governments.

The Taiwan government funding is the latest support for various projects and government services, and is providing $2,578,895.02 for 14 projects, the largest of which is a matching grant for about $1 million in United States funding for infrastructure on Ebeye, the over-crowded island next to the U.S. Army-run Kwajalein missile testing range.

Ambassador Gary Lin made the presentation to Foreign Minister Gerald Zackios and Finance Minister Brenson Wase on Friday.

Since the Marshall Islands and Taiwan established diplomatic ties in late 1998, Taiwan has provided about $10 million annually to the Marshall Islands for a variety of development projects.

The Marshall Islands is one of the few countries in the world that have diplomatic ties with Taiwan, which is considered a "renegade province" of China.

Shoniber said earlier that both Taiwanese funding and U.S. federal grants are provided on a reimbursable basis, meaning the Finance Ministry has to spend the money first and then seek reimbursement from the two foreign governments.

She says the Marshall Islands government’s financial situation has significantly improved since the late 1990s, when it was often months before it could pay its bills.

But two developments have contributed to temporary cash-flow problem at Finance, she indicated.

The Bank of Hawaii, which had been handling U.S. federal grant transfers for the Ministry of Finance, closed its Majuro Branch at the end of November last year. There has been a lag in receiving U.S. federal reimbursements during the transition to Bank of Guam in handling receipt of federal grants for the Ministry, she said.

On the Taiwan front, prior to this week’s $2.5 million fund contribution, there had not been a Taiwan drawdown since last November.

Since both U.S. federal grants and Taiwan funding are in the $10 million range each year, this strains the Ministry of Finance’s resources to advance funding without relatively quick reimbursement, she said.

Shoniber added, however, that the cash flow situation is a matter of weeks only for vendors to get paid, not months as in past years.

She said one of the problems is that businesses expect to present an invoice and be paid the same day, a totally unrealistic expectation as it normally takes a minimum of two weeks to process check payments at Finance.

Among the projects to be funded by the $2.5 million from Taiwan, more than one-third is going to fund sewer, water and power repairs and improvements on Ebeye Island.

Zackios said these projects are expected to significantly improve living conditions on Ebeye.

Other projects funded include $500,000 for College of the Marshall Islands facilities’ improvements, $346,627.75 for Majuro Hospital and outer island dispensary repairs, and $210,000 for repairs at Marshall Islands High School, the largest public high school in the country. Other projects include judiciary equipment, outer islands solar power work, court house repairs, a fire house building, elementary school repairs, Ministry of Foreign Affairs office equipment and legislative building repairs.

March 3, 2003

Marianas Variety: www.mvariety.com 

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