The Asian Development Bank (ADB) and the East-West Center in Washington held a presentation and discussion on “The Economic Impact of Freely Associated State Compact Renewal”.

About the Study

The United States and each of the three Freely Associated States (FAS) have negotiated renewals of the economic assistance provisions of their Compacts of Free Association. The Federated States of Micronesia (FSM) and the Republic of Palau signed agreements with the US in May 2023. The Republic of the Marshall Islands (RMI) signed a Memorandum of Understanding indicating agreement on a total funding level, and discussions are ongoing.

This presentation focused on the negotiated funding level and terms to be implemented over the next twenty years for each FAS. The presentation highlighted:

  • The improved funding levels available to each FAS;
  • The fiscal policy implications for managing the transition to improved funding levels; and
  • The fiscal policy risks still facing each FAS until the Compact renewal agreements are authorized and appropriated by the US Congress.

Download Presentation Slides

Slides which were delivered during the presentation are available for download through the link below.

DOWNLOAD SLIDES

About the Original Study

ADB engaged a team of Graduate School USA experts to study the range of actions being considered by US, FAS, and donor partner officials with respect to future funding levels under each Compact, and potential economic impacts.

Economic Impact of the Compact and Renewal for the Republic of the Marshall Islands

Economic Impact of the Compact and Renewal for the Federated States of Micronesia

Economic Impact of the Compact and Renewal on the Republic of Palau

For additional work developed under the U.S. Department of the Interior-sponsored Economic Monitoring, and Analysis Program (EconMAP), please visit www.econmap.org.

Additional EconMAP Publications

Impact of the COVID-19 Pandemic on the Federated States of Micronesia: Economic Outcomes and Policy Review

The Economic Impact of COVID-19 on the Marshall Islands with Policy Options for Sustained Recovery

The Road to Recovery: Further Updating the Economic Impact of COVID-19 and Strategies for Mitigation in the Republic of Palau

RMI FY22 Economic Brief

The Team

Dr. Mark Sturton

Macroeconomist

Dr. Mark Sturton is a macroeconomist focusing on small developing nations predominantly in the Pacific Island region. He has worked extensively in the FSM, RMI, and Palau, where he currently serves as the EconMAP team leader.

Kevin O’Keefe

Economist

Mr. Kevin O'Keefe's career has focused on economic development with specialization in macroeconomic policy, international trade and development finance. He has worked in the Freely Associated State for the past 25 years.

Larry Dinger

Ambassador (ret.)

Mr. Larry Dinger served as U.S. ambassador to the Federated States of Micronesia (2001-2004) during final negotiations of the 2nd Compact of Free Association. He has also served as U.S. Ambassador to Fiji Islands, and Chief of Mission to Burma.

Jason Aubuchon

Public Administration Expert

Jason Aubuchon serves as the Program Director of the Pacific and Virgin Islands Training Initiatives (PITI-VITI), which is supported by the U.S. Department of the Interior under contract with the Graduate School USA.