MARSHALLS OFFERS LOANS TO STRUGGLING BUSINESSES

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MAJURO, Marshall Islands (Marianas Variety, April 21) — A
multi-million dollar loan fund to help bail out local businesses on the verge of
bankruptcy is being set up at the Marshall Islands Development Bank.

The Marshall Islands government is injecting at least $5 million
and possibly as much as $10 million into a development bank loan fund aimed at
helping local businesses to recover from an influx of businesses owned by Asians
or naturalized citizens as a result of a mid-1990s passport selling scheme that
has since been halted.

"This is not funding straight from the government to
businesses," said Finance Minister Brenson Wase on Friday. Wase is chairing
a cabinet committee created recently to address the problems facing numerous
local firms.

"The government will supply funds to the development bank
and local businesses will have to submit proposals and meet the requirements of
the bank." Wase said that the government was providing "an
opportunity" for local businesses to rebound.

Since the late 1990s, Robert Reimers Enterprises, Gibson’s,
Momotaro’s and Domnick Auto Rentals — all long-established and large
Marshallese-owned businesses that account for close to 1,000 jobs — have been
hard hit by competition from new businesses opened by Asians or naturalized
citizens of Asian ancestry.

"We have to take a risk or face the consequences of having
these businesses close," Wase said in commenting on the motivation to
establish the loan fund.

Resources and Development Minister John Silk said a myth that
needs to be dispelled is that Marshall Islanders cannot compete with businesses
run by Asians. "Personally, I don’t believe that Marshallese can’t
compete," he said.

He believes that part of the inability of local firms to adapt
to encroachment by many newly opened businesses resulted from complacency during
the United States administered Trust Territory period — when there was no
business competition — and during the early years of the Compact of Free
Association from the mid-1980s — when there was very little competition.

The government wants to see citizens of the Marshall Islands
running businesses and Marshallese prospering, Silk said. But at the same time,
the government wants to see fair prices. "There’s no doubt that prices
for the consumer have gone down with the influx of competition," he said.

Silk said that the issue of "Marshallese-owned" stores
is complicated by the passport sales program because now many of local firms are
owned by naturalized citizens of Asian ancestry. "The constitution doesn’t
discriminate against naturalized citizens," he said. "All the citizens
are equal."

Both Wase and Silk said the development bank will play a
critical role in the business recovery fund. "Politicians will stay out of
the loan decision-making process," Wase said.

April 21, 2003

Marianas Variety: www.mvariety.com 

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