PALAU STRUGGLES WITH SLUGGISH ECONOMY

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‘Pay not enough to buy things from store’

By Bernadette H. Carreon

KOROR Palau (Palau Horizon, Sept. 23, 2009) — Palau will still need time to recover from the economic crisis, unless new money is infused into the country, Vice President and Finance Minister Kerai Mariur told reporters.

In an interview, Mariur said "the economy is still not picking up. Palau is at the end of everything."

Mariur said Palau’s economic growth is very slow and cited the prices of food have gone up while salaries and wages remain low.

"Take home pay is not enough to buy things from the store," Mariur said.

The government however remains optimistic that the economy will be picking up. He said the Compact of Free Association Trust Fund went up to $140 million within seven months.

Mariur said new money or investment can fuel the economy. He said that there are pending revenue-generating bills before Congress that could help the country recover from the economic slump.

Mariur said as it is, the government does not have enough money to run government operations.

Mariur said the government is expecting a shortfall of at least US$10 million due to unpaid obligations and the target revenue collections of US$40 million will not be reached.

He said that Palau has unpaid obligations amounting to US$10 million and to retire this, the government is considering taking out a loan from the National Development Bank of Palau.

Mariur said Palau owns money to utility companies and local vendors.

The government has also urged businesses to take advantage of the tax amnesty which will be available until Oct. 20.

He said the government understands that times are hard and that the community will need to work together.

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