President Surangel Whipps Jr delivers his inaugural address, January 21. Photo: Richard Brooks
Palau President's has unveiled some of the details of a new economic package under the re-negotiated provisions of the nation's Compact of Free Association with the US.
Palau stands to receive $US890-million in economic assistance from the US over the next 20 years.
Surangel Whipps Jr said the total pledged by Washington was more than double the price initially on the table.
In his state of the republic address last week, the president said they expect to sign off a Compact agreement in the next month.
"We anticipate that in the next month, we will be signing off on a Compact agreement that recognises the value that the people of Palau have as a sovereign nation, and what we bring to the global stage," Whipps told the Palau Congress according to the Pacific Island Times.
"The new agreement includes provisions for continued assistance based on negotiations at that point. This will mean we won't have to solely rely on our Trust Fund for at least the next 20 years."
The package includes $5 million a year for infrastructure and another $5 million a year for maintenance.
The US has also pledged six years of funding at $10 million a year to pay down most of Palau's Covid-related loans and $100 million for the Compact Trust Fund to keep it growing.
The Compact's economic provisions are set to expire next year, but US and Palau negotiators agreed to renew them a year ahead.
"The new agreement includes provisions for continued assistance based on negotiations at that point. This will mean we won't have to solely rely on our Trust Fund for at least the next 20 years," Whipps said.
The package includes $5 million a year for infrastructure and another $5 million a year for maintenance. Currently, Palau is receiving only $2 million for both infrastructure and maintenance.
The US has also pledged six years of funding at $10 million a year to pay down most of Palau's covid-related loans and $100 million for the Compact Trust Fund to keep it growing.
"Funds a year earlier than scheduled, and get a provision that helps address inflation for the course of the next 20 years," Whipps said.
"When we first took office, we inherited a package that we quickly realised was unacceptable. That initial agreement would have sent our nation backward," Whipps said. "It fell far short of honouring Palau's contribution to the partnership in promoting a peaceful lndo-Pacific region."
The president recalled that his administration was criticised for demanding more than what was offered.
"We were told we shouldn't be asking for more than they want to give us. We were adamant that we had to stand up for what our people deserve.," he said. "As a result of our bold request, President Joe Biden appointed Special Envoy Joseph Yun last year."
As for the nation's economy, Whipps expressed confidence about recovery.
"In 2022, we are doing better than we initially expected, although tourism hasn't rebounded as quickly as we had hoped. But we responded quickly to the needs of our community and kept money moving through the community," he said.
The president said the covid-triggered fiscal doldrums prompted the government to tighten its belt and cut its budget by 10 percent for two years.