Marshall Islands Nitijela Poised To Pass Controversial Telecom Bill

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World Bank backed legislation to end NTA monopoly

By Giff Johnson

MAJURO, Marshall Islands (Marianas Variety, Feb. 23, 2015) – The Marshall Islands Nitijela or parliament is poised to pass a controversial telecommunications law that would result in the World Bank providing at least $10 million in grant funds to the government. But opponents say the negative impact of this legislation will make it the most costly grant ever received by the Marshall Islands.

Bill 44 passed second reading Friday following major debate and is now awaiting introduction for its third and final reading before Nitijela ends its current session in the next few days.

Finance Minister Jack Ading strongly backed the bill and the opportunity for the large cash infusion to the Marshall Islands government by the World Bank, which is supporting the bill that would end the government’s National Telecommunications Authority’s monopoly control of telecommunications.

Other cabinet members said people criticizing this bill were spreading unsubstantiated fear about its impact.

Opponents shot back that the bill will result in the National Telecommunications Authority or NTA going out of business, major job losses, and foreign control of the telecom sector.

Passage would trigger the next grant payment to the Marshalls, which has already received $3 million for introducing the legislation last year that meets World Bank requirements. The World Bank grant is provided without strings attached and can be used in any way the government chooses.

"I’m surprised they brought it out for a vote (on second reading) because the Resources and Development Committee had voted to defer it last year," said NTA general manager Tommy Kijiner Thursday. He added that the version that passed second reading is the World Bank’s draft, not the revised version that NTA proposed following cabinet directive to work with the attorney general and chief secretary to recommend amendments.

"It will be a sad day for NTA if the bill passes," he said.

"Everyone’s job will be on the line if this happens." He said NTA made several important amendments to the legislation that he believes are in the interests of the Marshall Islands as a nation. But NTA’s recommendations have apparently been rejected by both the government and World Bank advisors.

If the true purpose of this new plan is to "open up" telecommunications to competition, "then it should be done with our version of the bill," Kijiner said. "But now we know the real reason for this bill," he said. The plan behind it is to "sell off NTA." This isn’t NTA trying to scare people, it’s in the World Bank’s report, Kijiner said. "The World Bank wants to sell off NTA to a foreign company," he said. "It’s in their report."

He pointed to a February 13, 2013 World Bank report titled "First ICT Sector Development Policy Operation," a copy of which was never officially provided to NTA, but which he discovered in mid-2014. The report lists three scenarios for reforming the country’s telecom sector. The third scenario, which this World Bank report says will bring the most benefit to Marshall Islands, is "Government transfers control of NTA to a strategic private investor, and permits competition."

Kijiner said the people supporting the legislation need to tell the real story of what is happening. "Don’t give a false sense of security that there will be two or three companies coming in to compete," he said. "The Marshall Islands market is not big enough for two telecoms." Kijiner said the experience of other islands shows this, and the ones such as Palau or Samoa that have more than one telecom also have either major tourism industries or significantly larger populations that provide the business environment for multiple telecom companies to operate in. "Even the World Bank acknowledges that there is not enough market" in the Marshall Islands for competition, he said.

NTA contributes $4.1 million annually to the local economy. Passage of the legislation will kill NTA, he said, adding that although Nitijela members say World Bank grant funds can help NTA to compete, not a penny of the first $3 million World Bank telecom funding went to NTA.

"Donors are not always right," he said. "Marshall Islands has many non-performing loans from the Asian Development Bank that were based on experts’ advice."

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