US bill to avert government shutdown includes funding for key Pacific allies

Stephen Wright
US bill to avert government shutdown includes funding for key Pacific allies U.S. Secretary of State Antony Blinken (second from right) speaks to the press with the Marshall Islands Minister for Foreign Affairs and Trade Jack Ading (left), Federated States of Micronesia President Wesley Simina (second from left) and Palau President Surangel Whipps (right) ahead of a meeting at the State Department in Washington, Sept. 26, 2023.
Mandel Ngan/AFP

Economic assistance for three Pacific island nations that are crucial to maintaining U.S. military strength in the Pacific has been included in a bill to fund the U.S. government following concerted lobbying.

The leaders of Palau, Micronesia and the Marshall Islands, the New Zealand and Australian ambassadors to the U.S. and dozens of U.S. politicians had recently rung alarm bells that delays in securing the funding had created an opening for China’s government to further increase its influence in the region. 

"We are greatly encouraged by the recent developments,” the office of Palau’s president, Surangel J Whipps, said in a statement Tuesday. “We are heartened that the leaders of both houses of Congress and the White House have reached a consensus on the legislation slated for action this week."

The bill published Sunday on the House of Representatives calendar would fund key parts of the U.S. government for the remainder of its fiscal year and the agreements between the U.S. and three island nations – known as compacts of free association. 

It follows protracted budget battles between Republican and Democrat legislators that have threatened to deprive the U.S. government of funding and culminate in a partial shutdown of government services from Friday.

The Marshall Islands, Federated States of Micronesia and Palau give the U.S. military access to their vast ocean territories in exchange for funding and the right for their citizens to live and work in the U.S. The agreements also allow the U.S. to deny other countries access to the waters between the Philippines and Hawaii.

Amid increased U.S.-China rivalry in the Pacific, the three island nations last year signed new economic assistance agreements with the U.S. that are significantly more generous and provide a total of US$7.1 billion over two decades. 

Renewal of the compacts and legislative approval of their funding has been regarded as a litmus test of U.S. commitment to the Pacific.

Micronesia’s government said it was optimistic about the “forward movement” of the legislation this week in the House of Representatives. The next steps would be a Senate vote and President Biden’s signature.

“This development reinforces our confidence in the strength of our partnership with the United States,” Micronesia’s President Wesley Simina said in a statement. 

He said the compact is vital to the well being of Micronesia’s people and the stability of the region. 

Last month, Simina and the leaders of Palau and Marshall Islands had warned in a letter to senior U.S. legislators that uncertainty about funding had “resulted in undesirable opportunities for economic exploitation by competitive political actors active in the Pacific.”

The letter didn’t name China but its inroads with Pacific island nations, including a security pact with the Solomon Islands in 2022, have recently galvanized renewed U.S. attention to the region.

China’s government has courted Pacific island nations as it seeks to isolate Taiwan diplomatically, gain allies in international institutions and erode U.S. dominance. Beijing regards Taiwan, a democracy and globally important tech manufacturing center, as a renegade province that must be reunited with the mainland.

U.S. analysts also have recently warned that failure to secure compact funding would be a blunder for Washington and an opportunity for China.

Micronesia’s previous president, David Panuelo, last year warned of aggressive efforts by China’s diplomats to gain influence in the country, alleging use of bribes and other tactics that he characterized as “political warfare.”

The U.S. military is building an over-the-horizon radar station in Palau while the Marshall Islands hosts a U.S. ballistic missile testing and space surveillance range on Kwajalein Atoll.


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