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Marshall Islands Journal News Archive beginning in 2005 through 2009 From the 12/25/09 issue of the Marshall Islands Journal The 21st century is coming to RMI By GIFF JOHNSON The small cable that made its Majuro debut Saturday didn’t look like “technology on steroids” — as the new fiber optic cable has been described by local business people who appreciate the power of this new development — but the message of 21st century communications hardware is “small is beautiful.” With the kick off of installation of a state-of-the-art submarine fiber optic cable, 21st century telecommunications will soon open in Majuro, Ebeye and Kwajalein. The Tyco Durable, a high-tech cable-laying vessel, successfully attached the new multi-million dollar cable to Majuro Atoll on Saturday. “The end of dial-up Internet is near,” said Marshall Islands National Telecommunications Authority General Manager Tony Muller Saturday as the cable was being installed. “We’ll have DSL (high-speed) Internet to all subscribers early next year.” “The cable is more than just a cable,” Bank of Marshall Islands Chief Information Officer James McLean said. McLean called the “broadband” the cable is bringing as “technology on steroids. It enables different business models we’ve never had before.” NTA is paying $21.5 million for Tyco Communications to install the submarine fiber optic cable that will run on the ocean floor. Majuro is the last point on the cable that will connect to the US Army base at Kwajalein in the Marshall Islands, to the Federated States of Micronesia capital Pohnpei and finally to Guam, where it will feed into global communications networks. The Tyco Durable, after making the cable connection in Delap Saturday, headed for a point 30-miles from Kwajalein where the Majuro trunk cable will link with the branch that goes into the missile range. It will then continue toward Guam, stopping briefly at a point 90-miles north of Pohnpei, where the main line will be connected to Pohnpei’s branch. “Cable laying will be completed by the end of January,” Muller said. The Kwajalein branch was laid last week and the Pohnpei one was put in last month. “In February we’ll do testing and commission the line,” Muller said. The aim is to begin using it by April 1 or earlier, he said. The high-speed Internet available next year will open up numerous possibilities, including cell phone banking, McLean said. “Cell phones will become mobile ATMs in the near future,” he said. Pumping information at the speed of light It is hard to believe looking at the new submarine fiber optic cable — which is small, probably no bigger across than an inch-and-half — that this will transmit a huge volume of information almost instantaneously. “Real time” is how information technology experts like their data. Not three hours from now or tomorrow. The days of information taking days or weeks to arrive are gone in most parts of the world and soon enough will disappear even from our slow-moving islands. Take Kwajalein, for example. The people running missile tests today have to send out a crew of a couple of hundred tech guys and gals to sit around for weeks getting ready for a test and to record everything during the actual mission. Then it all gets packed up and flown back to the Lincoln Labs at MIT, or to the Pentagon. In April, once the cable gets turned on, this is how it will work at Kwajalein: Just a handful of technicians fly out from the US, the rest sit in their computer labs in Washington or Boston watching eight different screens providing data on every phase of the missile test. Film and data by the gigabyte will be flying through this one-and-a-half inch diameter pipe from Kwajalein to the USA so that the USA-based technicians and scientists can watch the test unfold as it is happening. Same for people on Majuro and Ebeye, assuming NTA can solve its domestic connection challenges. Imagine having the problem affecting one local guy who went abroad and was faced with unknown territory: high speed Internet. “I kept clicking on the download button because it wasn’t working,” he said. But a few minutes later the hard drive on his computer was full. “What happened?” he wondered to himself. Then he discovered the download was so fast he had literally missed it, and so had repeatedly downloaded the same document about 100 times. Let’s hope we, too, will soon have this experience.
From the 12/4/09 issue of the Marshall Islands Journal 10,000 ATMs in Majuro? By GIFF JOHNSON How about 10,000 ATMs in Majuro? And a few hundred on the outer islands? If that sounds so outrageous as to be impossible, then you are not talking to the right people. Majuro, as everyone knows, has two “automatic teller machines” (ATMs) provided by Bank of Guam outside its bank and also at the RRE complex. But the fiber optic cable that will go into play in April 2010 will afford the Marshall Islands a quantum leap in technology, rending the type of ATM now in use in Majuro obsolete for anyone with a cell phone and Internet access. Bank of Marshall Islands is positioning itself to make full use of the cable technology. Over the past 10 years, major banks have launched Internet-based banking, said BOMI’s Chief Information Officer James McLean. But the Internet continues to be plagued with security issues. Meanwhile, cell phones offer a new and better opportunity for banks and other businesses, he said. “We’re looking at jumping over ‘e-banking’ and going to the next technology,” McLean said in anticipation of the new cable that will enable world class communications speed and quality. Cell phones will become “mobile ATMS” in the near future, he predicted. The convergence of technology — the cell phone and the high-tech cable — means “a hand-held mobile device is the future of banking,” he said. There are 10,000 cell phones on Majuro, McLean said. “That’s a huge market,” he added, saying these are “potentially 10,000 ATMs moving around.” He noted that in the US, only a couple of banks have started moving in the direction of mobile banking, including First Hawaiian Bank. “It is very attractive for third world countries,” he said, adding in many developing countries cell phones are Internet-linked, helping people to start and run small businesses. “This (mobile banking idea) falls in line with this,” he said. “We can jump over decades of technology we missed out on.” The bank is looking outside the box to see how it can maximize use of the new cable when it goes online next year, McLean said. “If others look at themselves in the same light, they will see more opportunities to improve efficiency or generate more revenue,” he said. “Seemingly separate things — water, electricity, taxes — are suddenly not so separate anymore.” He pointed to time-saving opportunities that can be provided to pay bills or for services in this manner. “The cable is more than just a cable,” he said. McLean called “broadband” — high speed Internet service the cable will bring — as “technology on steroids. It enables different business models we’ve never had before.”
Editorial: How to ruin good businesses in RMI For the past few years, local business people individually and the Chamber of Commerce collectively have complained about obvious smuggling activity evident in some Majuro stores. The availability of products for lower cost than the tax for these products confirms the obvious: the items were smuggled in. Finally, the Ministry of Finance launched an investigation into illegal tobacco sales in late 2008. In October that year, Finance and National Police came up with evidence of smuggling, going so far as to get court orders to search two businesses and confiscate tobacco products alleged to be smuggled. So here’s our question: Why does it take the government 13 months to file criminal charges against the companies involved? It does not help to delay enforcement. It just allows illegal activity, if indeed it is happening, to continue unabated. Smuggling hurts the government and tax-paying businesses in two ways: The government is not getting the tax revenue it should be from the companies breaking the law and law-abiding companies that are paying taxes are being put out of business because they can’t compete with the low “no-tax” prices. Taking this to its natural extreme, tax-paying businesses go bankrupt and close, leaving the Majuro and the RMI government with few or no tax-paying businesses. How do you think that will affect the RMI’s budget?
From the 11/27/09 issue of the Marshall Islands Journal Ading: RMI’s future at stake By GIFF JOHNSON “Difficult, but can be done.” That sums up Minister of Finance Jack Ading’s response to the Comprehensive Adjustment Program (CAP) Advisory Committee’s report to President Zedkaia and Cabinet on Monday this week that recommends ways the RMI government can cut spending by $4 to $10 million a year. “If we don’t start now and put more money into the trust fund, who suffers?” Ading asked. “Our children and grandchildren. We have to think about future generations.” The CAP report, commissioned by Cabinet, identified 13 areas where spending can be reduced by government. These areas range from the $34 million price tag of the public service, and housing and electricity allowances for VIPs to vehicle purchases and subsidies to government agencies. “The report is great,” Ading said. “The next step is for Cabinet to consider seriously if it is ready to implement the recommendations.” He acknowledged the challenge of implementing some of the recommended cutbacks. “Some of the recommendations are not easy,” he said. These include “entitlements” such as Nitijela sitting fees that provide $5,000 annually to each member of Nitijela. The recommendations to cut housing and power allowances for high-ranking government officials “may be easier and can be implemented as soon as possible,” Ading said. Prominent in the report are a series of options regarding the government’s large salary bill. It suggests eliminating up to 70 vacant positions, a limited reduction in force from 50 up to 400 workers, reducing the number of hours worked, and reducing the pay scale of government workers from one-to-five percent. He acknowledged the difficulty of these public service pay cut recommendations, but added “if it’s got to be done, it’s got to be done. “I’m willing to sacrifice my benefits for the benefit of the Marshall Islands.” Now that the Cabinet has been briefed, it needs to meet to consider the recommendations and next steps, Ading said. A few key points from the new report Key facts presented in the CAP report to Cabinet: • Salaries account for 46 percent of all General Fund spending • Salaries, debt payments, subsidies to RMI agencies and electric bills account for 80 percent of the General Fund • The average salary for RMI government workers is $14,417 • A reduction in force (RIF) of 50 RMI employees would save the RMI $700,000 year while reducing by 400 would save $5.6 million a year. • Reducing the pay scale for government workers across the board by one percent would save the government $350,000; a five percent cut would save $1.75 million • While Nitijela law requires that senators not receive the $100 daily sitting fee for any session days missed through unexcused absences, “it is known that all Nitijela members receive the entire $5,000 allowance regardless of their attendance records.” • 30 top government leaders, from the President, Cabinet, Nitijela Speaker and Vice Speaker to PSC Chairman/commissioners and an ambassador at large, receive a $9,000 annual housing allowance • In 1992, Cabinet authorized giving 150 landowners on Majuro a 1,000 kilowatt hour electricity allowance at a cost of $180,000. The number of landowners on the 1,000 KW free power list has jumped to 565 and now also includes 24 top-level RMI government officials bringing the bill in 2008 to $900,000 • In 2008, $66,346 was spent on new vehicles from the General Fund. “In fiscal year 2009, as of early July, the General Fund trend had doubled, totaling $126,223.” • General Fund travel spending was its lowest in 2008 since 2002. In 2008, the General Fund spent $1,134,305 • General Fund subsidies to RMI agencies and other entities have increased 43 percent from FY2004 through last year. The amount of subsidies jumped to over $6.3 million in 2008, with a total spent over the past five years of about $28 million. Who’s on the team? The Comprehensive Adjustment Program Advisor Committee was headed by chairman Ben Chutaro and vice-chairman Ben Graham. Other members of the Cabinet-appointed panel were: Dr. Hilda Heine, Jack Niedenthal, Mike Slinger, government Secretaries Tommy Kijiner, Jr., Kino Kabua, and Jefferson Barton, Nitijela Counsel Divine Waiti and Marie Maddison. The group’s advisor was Kevin O’Keefe.
From the 11/20/09 issue of the Marshall Islands Journal Secured transactions good for business Secured transactions expert Anthony Frazier gave local business people a briefing Friday on a new system going into effect that is expected to have a positive impact on loan funding for the private sector. He and local consultant Ben Chutaro also led trainings on the soon-to-be-implemented secured transactions program for bank and other officials over three days last week. Although Nitijela adopted the secured transactions law more than two years ago, it is only in recent weeks that the necessary elements are being put in place to actually implement it. Frazier said he expects it to be in operation by early in 2010, following adoption by government of new regulations enforcing the law. Not only banks but businesses can benefit from the new regime, Frazier and Chutaro indicated. “Secured transactions can increase economic activity in the country,” Frazier said. “It is easier for lenders to secure loans by using moveable property as collateral.” Frazier emphasized that land is not included in the definition of “moveable property.” The law will allow banks to more easily get their money back in case of a default by the company taking the loan, he said. The new system will set up an electronic system that allows lenders to know if a would-be borrower has already pledged this same collateral to another lender by establishing a filing office into which notices of liens may be filed. Frazier said these two developments “give lenders greater comfort in extending credit. “By increasing access to credit, this law can help spur overall economic growth as it allows for increased investment in the local economy and, ultimately, increased employment.” The filing office where information will be administered by a Secured Transactions Filing Office that is located at the Land Registration Authority in the MIDB building. It will be an electronic operation, with all filing and searching of the records done via the Internet. Countries that have adopted secure transaction legislation have “seen a direct uptick in their gross domestic product in the year following adoption,” he said. “Everything is in place,” he said. “All we need are the regulations.” The Asian Development Bank has provided funding to assist with the final implementation of the Nitijela law. Lower interest rates for commercial loans Interest rates for commercial loans will be reduced once regulations implementing a new “secured transactions” law are completed by the government, a Bank of Marshall Islands official told the Marshall Islands Chamber of Commerce meeting Friday. Once the bank can use “moveable property” as collateral for commercial loans, the bank will reduce its interest rates for these loans, said BOMI Chief Information Officer James McLean. The regulations that are in draft form are currently with the Ministry of Resources and Development, which is the government ministry responsible for assisting private sector development. R&D Secretary Tommy Kijiner, Jr. told the Journal Friday that the regulations are expected to go to Cabinet for review and approval later this month.
From the 11/13/09 issue of the Marshall Islands Journal The meter principle The Department of the Interior’s Insular Assistant Secretary Tony Babauta has agreed to partially fund a proposal from the Marshall Islands government and the Marshalls Energy Company (MEC) that will implement initiatives to assist the utility company to become self sustaining, DOI said in a release Wednesday. Under the proposal submitted to DOI, the MEC seeks a three-pronged approach to: • Install debit meters for accountability • Establish a meter-calibration program to ensure accuracy • Install meter locks for security. “I applaud the proposal of the RMI government and the Marshalls Energy Company to ensure the fair delivery of services to Marshallese residents,” Babauta said. “Plans such as this one submitted by the MEC work toward the goals of accountability and transparency, which in the end results in a more efficient system from the standpoint of both provider and consumer.” The DOI grant, from the Operations and Maintenance Improvement Program, in the amount of $200,000 will help to address studies that have shown that the MEC incurs a more than 10 percent loss from theft and non-payment of electric utility services. This can result in millions of dollars a year in unrealized revenue, DOI said. The installation of electrical meters is intended to cut down on such loss and has been successful in other islands such as Kosrae and Palau. The DOI grant is subject to an equal matching funding requirement from the RMI. MEC records net loss of 4.1 million The Marshalls Energy Company suffered a $2.9 million operating loss in fiscal year 2008 and overall its net deficit for the year was $4.1 million, giving the company an overall $10.9 million net deficit when previous years losses are combined, the latest Deloitte and Touche audit reported. Aside from detailing MEC’s heavy losses, auditors identified only two findings (problems) in the company’s accountability. Overall, it had $19.6 million in revenues and $22.5 million in operating expenses. Added to this was $1.5 million in interest payments and small subsidies for the Jaluit and Wotje power operations totaling $355,000 that produced the overall $4.1 million net deficit. “Despite the wildly fluctuating fuel prices, MEC has been able to maintain electricity tariffs at levels which are one of the lowest in the Pacific,” MEC said. In 2008, MEC received a cash advance from the RMI government of slightly over $7 million, of which $2.3 million was applied to outstanding utility debt owed by the RMI government and its agencies, the audit said. MEC also has a five-year fuel contract with SK Networks Co., Ltd. that started in 2007 and runs through December 2011. MEC management “acknowledges that it is currently dependent on RepMar for cash advances to fund operations and for its affiliates to pay for actual services rendered in order to maintain MEC as a going concern,” the audit said. “Should RepMar and its affiliates choose to discontinue cash advances and payment for services rendered, MEC management may have to consider alternative measures including, among other possibilities, an increase in electricity and fuel rates to maintain MEC as a going concern.” The audit raised the issue of account reconciliations not being prepared on a timely basis, “which resulted in numerous year-end correcting entries for electricity and fuel receivables, inventory, construction-in-progress, import tax payable, import tax expense and related party accounts.” Management said “procedures are in place covering reconciliations” and “staff have been instructed to comply with these procedures.” From the 10/23/09 issue of the Marshall Islands Journal Yards of MEC meters MEC’s plan to install prepaid meters for Majuro power customers is moving ahead with Interior Department, Asian Development Bank and Pacific Power Association assistance. MEC General Manager David Paul said a request for proposals advertisement will go out through the Fiji-based PPA, which will also help review bids received from overseas companies. MEC is planning to install meters for its 3,400 customers — residences, businesses and government offices. The Interior Department has approved funding to assist this three-year installation project. ADB funding will also support the project, Paul said. The meters, about $300 each, are expected to cost over $1 million. “We’re going to work closely with the PPA to get technical assistance (on the bids),” said Paul. “We want to do it right the first time.” PPA Director Tony Neil, who visited Majuro last week, said the prepaid meters “provide a means for utility companies to get into the black (make money).” The Interior Department is also funding an assessment of power plant and distribution losses in utility companies in all US-affiliated islands in the Pacific, Neil said. MEC’s plant and distribution system will be the first to be evaluated in early December. Paul described this study as a critical part of MEC’s recovery plan. Shortage of statistics By GIFF JOHNSON US and RMI leaders want to see better performance in government services, and have set new requirements for the ministries of Health and Education to improve data collection and to use it to demonstrate if they are meeting required standards. Two resolutions from the recent US-RMI Joint Economic Management and Financial Accountability Committee (JEMFAC) meeting in Honolulu focus on the need of RMI to improve its collection of data and to strengthen the link between data and budgeting. The Ministry of Health was directed to “undertake a systematic program to diagnose health data problems and discrepancies in the production of statistics by using technical assistance offered by the United Nations Population Fund (UNFPA). JEMFAC advised the Ministry of Health to provide a report to its technical meeting early next year on “progress made to complete the diagnostic activity, interim recommendations and a tentative timetable and list of resources to implement solutions.” This resolution follows problems being identified with Ministry of Health statistics, including the recall of the 2007 annual report when data discrepancies were pointed out by other agencies. The JEMFAC resolution comments that “if the Office of Insular Affairs deems insufficient progress has been made, after appropriate consultations with the Ministry of Health, then JEMFAC may direct the Ministry of Health to undertake additional remedies at its August 2010 meeting.” The Ministry of Education was directed to “contract with outside expertise to develop comprehensive technology plans, including standards for students, teachers and administrators, and budget and training schedules to meet those standards.” JEMFAC recommended that Education request use of unspent money from Supplemental Education Grant (SEG) funds from fiscal years 2005 and 2006 to support these efforts. RMI Chief Secretary Casten Nemra pointed out the need is to “get credible data so we can properly analyze (issues) and make decisions based on the data.” Nemra said both the US and RMI recognized “the issue needs to be addressed.” And, he said, the Ministry of Health fully supports the resolution. Interior Department official Alan Fowler said JEMFAC “put more emphasis on getting statistical data” at this year’s annual meeting. The RMI ministries “need data to make performance-based budgeting work,” Fowler said. The aim, he said, is to get RMI officials to produce the statistics themselves and to reduce reliance on outside consultants. Nemra said the government’s planning office and other agencies have been making good use of an official statistics program at the University of the South Pacific campus in Majuro. “This is an investment and it takes time, but when it’s done, we have skills here,” Nemra said. Planning office Director Carl Hacker said last week that there is room for 12 new students in the USP statistics program. He said there are 16 Marshallese currently enrolled and if government offices “want to push to improve their organization’s ability to handle performance budgeting, administrative statistics and data analysis, this is a way to develop long term and local sustainability.” In a separate resolution, JEMFAC directed the RMI government to “refocus the performance budgeting effort on the three Compact-funded entities for fiscal years 2010 and 2011 to resolve performance budgeting and measurement issues fully, and ensure that the ministries demonstrate improvements in handling budgets and data, and strengthening the link between both.” The Ministries of Health and Education and the RMI EPA are the three entities being funded by the Compact.
From the 10/16/09 issue of the Marshall Islands Journal ALRO tanker to cut fuel cost? Despite high shipping costs to deliver gas to Ebeye and Jaluit, ALRO prices for gas at the pump are close to or slightly less than Majuro pump prices. ALRO is the Ebeye-based petroleum company that supplies fuel to Ebeye and Jaluit through a contract with Mobil Oil Micronesia. ALRO Chief Executive Officer Alvin Jacklick, who also represents Jaluit in the Nitijela, spoke to the Journal Saturday about his plans to bring down the cost of supplying fuel to remote islands and Ebeye. Currently, he said, Ebeye is paying $4.95 a gallon for gas at the pump, about five cents lower than most Majuro stations, while the price at Jaluit is $5.25 a gallon. “Our goal is to provide fuel to the outer islands as inexpensively as possible,” Jacklick said. “To do that, we need our own tanker to deliver the fuel.” Jacklick said ALRO’s board supports services to the outer islands “with minimal profit. They see their responsibility to meet this important need for daily life.” If ALRO is successful in buying a tanker — which it is working on now — “the fuel price on the outer islands will be way less than the Majuro prices,” Jacklick predicted. He said he is working with banks to obtain financing for buying a tanker. One that he has identified is available for about $1.5 million, he said. Jacklick’s plan is to buy a tanker that can also carry cargo and passengers. Since Ebeye only requires shipments about once-a-month, and Jaluit is generally on a quarterly basis, with passenger accommodations and cargo space, the vessel could be used to transport people and goods when not delivering fuel, he said. “My goal is to bring a tanker next year,” he said. “It is critical for the business to have a ship for outer islands delivery to minimize delivery costs.” Copra price cut by 30 percent The price of copra in the Marshall Islands will drop dramatically on November 1, Tobolar’s board of directors announced late last week. “Based on world market prices, we had no choice but to drop the price,” said Tobolar Copra Processing Authority board Chairman Jemi Nashion, an assistant secretary at the Ministry of Finance. The price will drop from the current 23.5 cents to 16.5 cents per pound in Majuro, and from 22 cents to 15 cents per pound on the outer islands. This is a 30 percent drop. The old price is being maintained through the end of the month for two atolls that are currently having a copra pickup service from the Marshall Islands Shipping Corporation, said Nashion. Even at the lower price that starts November 1, Tobolar may have difficulty keeping the price at this level through next September, the end of the current fiscal year. The Nitijela’s approved budget puts $1.2 million aside for copra subsidy. “That will probably cover the price for 10 months,” Nashion said. He expressed hope that the world market price will rebound. But if the world market price drops, “we will absolutely need more money to maintain the price,” he said. Usually Tobolar announces price changes effective almost immediately. This three-week window is giving a short-term advantage to Arno and other islands that can transport their copra to market by small boat. Nashion said Tobolar has seen an upswing in copra coming in from Arno as producers are apparently hustling to get their copra in before the October 30 cutoff of the higher price. From the 10/9/09 issue of the Marshall Islands Journal High level talks with Japan The first Japan-Marshall Islands Policy Consultation on Economic Cooperation will be held this Friday at the Marshall Islands Resort. The aim of the high-level talks is both to “deepen understanding” about Japanese aid cooperation policies and to discuss specific development projects for RMI, said Japan Charge Kazuyuki Ohdaira (pictured). Yukio Numata, the Senior Coordinator of the International Cooperation Bureau at Japan’s Ministry of Foreign Affairs, is heading the Japan side to the one-day discussions. Ohdaira said the RMI side will be headed by Chief Secretary Casten Nemra, and include representatives from the President’s Office and secretary-level officials from five ministries. The talks were initially planned for March, but were delayed by Japan. “We will explain Japanese cooperation policies toward the Marshall Islands, and learn about development plans and policies of the RMI (at the meeting),” Ohdaira said. The Charge indicated the Japanese side is keen to review detailed sector development plans from individual RMI ministries. This will help “to deepen our understanding,” he said. Among the specific plans up for discussion are the RMI’s request for funding for a campus for the University of the South Pacific and new vessels for outer island services. These are two large budget projects now under consideration by the Japan government, he said. Two other Japan-funded projects that are in motion are an $8 million fish market for Uliga Dock, and a $4 million grant to install a large solar system at Majuro Hospital. Trust fund at $87.7 million At the end of August, the Marshall Islands government’s trust fund stood at $87.7 million — nearly returning to the level it had attained two years previously before the financial collapse that hit global financial markets starting in late-2008. The “A” Account, which is the main account of the trust fund was $75.6 million at December 31, 2008, according to the RMI’s Compact Implementation Office at Foreign Affairs. As of August 31, 2009, it had grown to $87.7 million, a 16 percent return over 11 months, according to the report from the Compact Implementation Office. This level, however, is still lower than the $89 million the trust fund had attained in late 2007. Demonstrating the severity of the losses the trust fund sustained over the past two years, the $75.6 million balance at December 31 last year included the $10.8 million US Compact annual contribution made in October 2008. The RMI’s Trust Fund lost more than $20 million, or nearly a quarter of its value, when the global financial crisis hit beginning a year ago. The annual US contribution to the Trust Fund is scheduled for this month and will total $11,132,214. The “D” Account of the trust fund, which the Republic of China/Taiwan is contributing to each year, went from $3,987,233.58 on December 31 last year to $6,087,662.96 as of August 31 this year.
From the 10/2/09 issue of the Marshall Islands Journal MOH financial issues not being resolved By GIFF JOHNSON Auditors report seven serious problems with accountability at the Ministry of Health’s “Health Care Revenue Fund” in 2008, including violations of the RMI procurement code that have remained unsolved despite being identified in audits since 2006. The report, by Deloitte and Touche auditors, was issued to Nitijela in September. It found $273,771 in Health Care Revenue Fund purchases during fiscal year 2008 that did not have enough documentation to prove that they followed the RMI government’s purchase (procurement) law. That is 35 percent of all non-payroll spending checked by the auditors that did not follow the law. Auditors said this showed there is a “lack of adequate internal control policies and procedures” governing procurement documentation required by law. Auditors said the Ministry of Health has been advised in the past two audits for FY2006 and FY2007 that it has not followed the procurement law in administering the Health Care Revenue Fund. The Ministry responded to say that it is going to “make it a policy for all high level administrators in the Ministry responsible for initiating purchase requisitions to be well versed in RMI procurement code to ensure compliance.” Other key points made by auditors: • Ministry staff did not reconcile the Health Care Revenue Fund’s Bank of Marshall Islands account during FY2008, resulting in unrecorded collections from Ebeye hospital of $38,997. In addition, Ebeye hospital’s daily collections and deposits of money are “not monitored by accounting personnel in Majuro,” and related receipts, daily cashier reports and bank deposit slips were not sent to Majuro in a timely way. The audit said that June and July 2008 documents were not sent to Majuro until February 2009. • Money received from patients at Ebeye hospital was not entered into the Ministry’s accounting program (known as the MIP system) as done for Majuro Hospital. “Management,” said the audit, “only learned of this condition when it was brought to their attention during the audit.” These problems relating to reconciliations and Ebeye hospital money collections could result in misstatements and theft of cash going undetected, auditors said. The Ministry said it would take action on these problems, by performing monthly reconciliations and by having the Director for Support Services at Ebeye provide deposit and cash information to Majuro for entry into the accounting system. • Prepayments of $96,932 were not “liquidated” (closed out) in a timely manner “due to incomplete receiving reports and lack of vendor invoices,” the audit reported. “One prepayment of $6,644 was not supported by a vendor invoice.” This problem occurred because the Ministry does not have a system for timely monitoring and reconciliation of prepayments, the audit said. “Effective immediately,” responded the Ministry, “the accounts receivable accountant will ensure that timely monitoring, reconciliation and liquidation of prepayment is implemented.” The Ministry said that “management may revisit its prepayment policies and procedures.” • The Health Fund automatically cancels unfilled purchase orders (POs) after three months “without investigation to determine whether cancellation should occur,” the audit said. This leads to management being unaware of unrecorded and outstanding vendor invoices for these POs. “Reconciliation procedures performed by management in response to audit inquiries revealed additional unrecorded expenditures of $180,163.” Auditors said Health Fund management should check unfilled POs prior to cancellation. The Ministry said this would be done, including preparation of invoice and receiving reports. Nitijela approves $137 million budget The Nitijela approved the second highest budget in RMI history for the new fiscal year that started on Thursday this week. The $137.4 million budget was approved officially signed into law on September 21 by Speaker Jurelang Zedkaia. Only one floor amendment was made to the budget bill before it was passed. Minister in Assistance Ruben Zackhras moved a floor amendment to take $300,000 from the Ministry of Education’s “professional development” account and put it in the school lunch program account. This pumped the school lunch program from $100,000 to $400,000. Prior to passage of the budget, the Ministry of Education had cancelled its lunch program at all Majuro public schools for lack of funding, and Education officials said they feared this would have a seriously negative impact on student learning. The Nitijela responded, though it did not add new money to Education’s budget, simply moved money within the large $25.9 million budget for public schools. From the 9/25/09 issue of the Marshall Islands Journal Power at risk By GIFF JOHNSON Adding a new degree of uncertainty to an already challenged business environment in Majuro, MEC General Manager David Paul warned Wednesday’s Chamber of Commerce meeting that power for the capital is in an unpredictable phase and electricity service could be interrupted if one of the two large engines break down. “I don’t want to panic anyone, but the assessment from our mechanical engineers is that the big engines in the new power plant could go tomorrow, next month or in six months,” Paul said. “We’re aggressively working to get parts in and the generators overhauled.” But, said the new Marshalls Energy Company general manager, “as a responsible manager, I don’t want people to panic but this is the reality (of the power situation in Majuro). I don’t have a crystal ball.” Several of the smaller generators in the old plant are still ‘down’ as a result of a fire three years ago, and while one was recently returned to service, Majuro’s electricity usage is at the point where MEC currently has almost no backup generating capacity. And if one of the big six megawatt engines is forced to shut down — as happened recently — it will put MEC in the position of rationing power. The new plant’s two engines “are in a state of disrepair,” he said. “They require a major overhaul.” MEC has been financially strapped the past three years, with little money available for major engine work. For the new plant’s two Deutz engines, it can take many months lead-time to fabricate new parts, which also have to be paid for in advance, Paul said. A Marshall Islands Social Security Administration official said Paul, who is on the MISSA board, advised the board to purchase a generator, which the retirement agency is now planning to do. “On Tuesday, we briefed the Cabinet regarding the financial situation of the company, and I expect the Minister of Public Works (Maynard Alfred) who chairs the MEC board will go on Nitijela to explain the situation to the public,” Paul told the Chamber. Paul concluded by asking if there were any questions. The normally voluble Chamber crowd responded with an unusual silence. New freight rules on the way A new US Homeland Security rule comes into effect early next month will require anyone shipping any cargo to and from the Marshall Islands to use a US-recognized freight forwarder or agent. Triple B Sales Manager Andrew Alt was at the Marshall Islands Chamber of Commerce meeting Wednesday to explain that on October 7 the Transportation Safety Administration rule goes into effect. Triple B’s local agent is Pacific International Inc., and Alt explained that PII will assist local businesses and others to move their cargo in either direction. The TSA is ramping up security of cargo carried on US passenger airlines. The new TSA regulations will impact all islands in the Micronesia area, Alt said. “Continental will not be able to accept cargo from current ‘known shippers’ after from October 7,” he said. After that date, all cargo must go through a freight forwarder. Alt is here through Friday to meet with businesses wanting to prepare for the new regulation. From the 9/10/09 issue of the Marshall Islands Journal EPA to get tough on unpaid fines Unpaid fines are an ongoing concern for the EPA as the loss of income has resulted in an inability to maintain equipment and respond to environmental problems effectively. At the same time EPA recognizes that litigation should only be used as a last resort as it is costly, time-consuming and adversarial. For this reason, EPA is implementing a new procedure starting on October 1. Permit applications by individuals or companies with outstanding fines will not be considered until the fines have been paid in full. Those who disagree with fines issued may appeal EPA’s decision, a right provided under the National Environmental Protection Act. Any appeal before the courts or an alternate dispute resolution process will not be considered, the EPA said. RMI hosts climate meeting The Marshall Islands will host the second annual Pacific Climate Change Roundtable (PCCR) and related meetings October 19-23. The meetings will be held at the International Conference Center (ICC). The Secretariat of the Pacific Regional Environment Program, in collaboration with the RMI government, is sponsoring the PCCR and a preparatory Climate Change Negotiations Workshop to help the Pacific islands prepare for the upcoming UN Conference of the Parties which will be held at the end of the year in Copenhagen. The event will bring together climate change experts, advisors, regional and international organizations on climate change, including policymakers to discuss climate change issues and mitigation efforts in the region. While much effort is being invested in the international and Pacific islands communities to mitigate greenhouse gases that cause climate change, some impacts will be inevitable regardless of how this is addressed due to the longevity and amount of carbon dioxide already in the atmosphere, said the RMI Office of Environmental Planning and Policy Coordination in a statement. “It is important that the resiliency of our people and islands is built to help us combat these negative changes.” In 2005, Pacific island leaders adopted the Pacific Islands Framework for Action (PIFACC) 2006-2015, and the South Pacific Regional Environment Program was directed to develop an Action Plan to implement the PIFACC, by establishing a set of national and regional activities that would meet the key principles of the PIFACC. From the 9/3/09 issue of the Marshall Islands Journal Five-year wait for investment return Pan Pacific Foods (RMI) Inc.’s parent company chairman and president Xie Feng says they are giving the RMI-based fish processing plant five years before its parent company Shanghai Kaichung Deep Sea Fisheries Co, Ltd expects to see a return on its $12 million investment. Shanghai Kaichung Deep Sea Fisheries is one of China’s biggest fishing companies — 40 percent owned by the Chinese government and the remaining 60 percent to private stockholders. Much is riding on PPF as it is the first ‘foreign-based-division’ of Shanghai Kaichung Deep Sea Fisheries Co. Ltd, and as one of China’s fisheries industry leaders for the past 30 odd years, PPF brings to the table decades of experience. But, despite this experience PPF says it needs the RMI government’s support to make the project a success. During President Tomeing’s recent tour of the plant, PPF laid out a road map of milestones that need to be reached in order for the plant to maximize its production capacity and remain in production long into the future — providing an employment opportunities for the nearly 40 percent unemployed Marshallese citizens. Some of the hurdles PPF says it needs RMI assistance with to reach its milestones include: • Timely processing of labor permits to bring in their skilled trainers to train locals. • Finalization of a Memorandum of Undestanding with the Marshall Islands Marine Resources Authority to license four more of their purse seiners to increase fish supply for processing — currently only two vessels are licensed. • Assistance with negotiations with the US to treat fish from RMI as a domestic product and gaining approval to provide fish to the US military. • Receive an official letter from the government/cabinet regarding PPF’s ‘tax holiday’ status. “PPF doesn’t only belong to China,” PPF (RMI) Inc. president Zuliang Zhang clarified to RMI’s President Tomeing. “It also belongs to the Marshallese people.” Pollution fines to be raised to $1 million? To combat a rash of recent lagoon oil spills, the RMI EPA is seeking to increase pollution fines to $1 million. If you’ve been in Majuro in the past few weeks, you might have noticed a marked increase in the number of small oil spills along the shore, evidenced by foul odors and dark blotches in the water. The RMI Environmental Protection Authority (EPA) has investigated three spills appearing at G&L, RRE Shoreline and Rita. All have been cases of bilge or ballast oil deliberately dumped in the middle of the night to avoid detection, EPA said. “Each spill has been too small to warrant sophisticated off-island chemical analysis (the only certain method of finding the culprit), but is still big enough to pose a threat to marine life and the environment, and in one case has led EPA to make a radio announcement to alert children of the potentially harmful health effects of swimming near the spills,” EPA said in a release. “In the past, spills have been treated with soaps or fertilizer, but it is now known that for small spills, these treatments can cause even greater damage to the environment than the spill itself,” EPA said. “That is why the oil is left to disperse and degrade on its own.” The EPA said illegal discharges like the ones in Majuro recently are significantly affecting the environment. “It is sad that some commercial vessels feel they can bypass the law and intentionally harm our environment and recreational areas,” EPA said. EPA is seeking to strengthen legislation to deter the illegal discharge of oil by ships. “EPA will be proposing amendments to the Coast Conservation Act designed to ensure that enforcement and prosecution of ships shown to be illegally discharging bilge oil is effective,” EPA said. “These amendments will increase fines up to $1 million, bringing them in line with other countries such as the United States, Canada and Great Britain.”
From the 8/28/09 issue of the Marshall Islands Journal Hospital hazard concerns Chamber Continuing problems with fixing Majuro Hospital’s hazardous medical waste problems were a focus of concern at last week’s Marshall Islands Chamber of Commerce meeting. Concern was raised about containers loaded with hazardous medical waste sitting for months near the airport, and bags of hazardous waste piling up at Majuro Hospital. It was explained that an incinerator for burning this hazardous waste was installed by Majuro Atoll Waste Company about a year ago at its location near the airport, but has not been operational as it is waiting for provision of electrical equipment by the Ministry. While MAWC has the contract for hauling hospital waste for disposal, AC Construction has the contract for handling incineration of the hospital’s hazardous waste. One Chamber attendee asked a question about large scale funding for the Ministry of Health that comes from the US government, and why the US doesn’t assist in this matter. “This is an independent country,” said the US Embassy’s Interior Department representative Alan Fowler. “They determine how best to use the funding. Yes, it could be used better, in Education, too, but we don’t run these ministries. This is a sovereign, independent country.” MAWC makes a difference Thousands of tons of auto batteries, aluminum cans, and steel from vehicles have been exported from Majuro in the past two years, by Majuro Atoll Waste Company. The Batkan-based firm is preparing to add millions of “pet” plastic bottles and hundreds of cars to its list of recycling materials. MAWC Manager Roger Clark gave the Marshall Islands Chamber of Commerce a report Friday on its work since formation in 2007. In the past two years, MAWC has exported for recycling 250 tons of automobile batteries. “We don’t get a lot of money for them, but it gets rid of a lot of lead,” Cooper said. Another 900 tons of steel has been removed from the island and exported for recycling the past three years, Cooper said. “We’re now preparing our first container of ‘pet’ plastics to recycle,” he added. “We can get about $200 per ton, which is a break even price.” Unfortunately for MAWC, the world market price for recycled steel crashed over the past year, going from $365 a ton in 2008 to $160 a ton today. Cooper said that the business and private waste collection program is working and generating about $100,000 a year to help out with some of the costs of operating the waste company. Cooper is particularly happy with MAWC’s green waste/compost operation, which is converting bushes, grass, fish scraps and copra cake into a fertilizer. The end product “is in high demand,” Cooper said. “We can’t keep up with the demand from the community.” MAWC is selling sacks of compost for $3 and a loader scoop for $15. He recognized the national government and a wide range of donors who have helped provide equipment and support for the waste company. From the 8/21/09 issue of the Marshall Islands Journal
India helps to light up Laura The long awaited solar streetlights funded through a grant from the government of India have finally arrived. Last year Majuro Atoll Local Government was awarded a $100,000 solar streetlight grant to purchase about 30 streetlights that will be installed in the Laura area — a response to the high cost of powering streetlights and addressing the need of ensuring security and safety of the community. Mayor Titus Langrine told the Journal MALGov is coordinating with Ministry of Foreign Affairs to inform the Indian Embassy in Philippines to confirm the arrival of the solar streetlights and to schedule a blessing ceremony. He said the aim is to have the Ambassador of India on island for the ceremony before installation work begins. “This is a pilot project with installation of the solar streetlights starting in Laura,” said Langrine. “MALGov will collaborate with MEC and Public Works to install the lights.” The solar streetlight units were purchase through Island Eco. Wally to represent Marshalls The Marshalls Billfish Club board-appointed All Micronesia Tournament Committee will be hosting the 17th Annual Budweiser All Micronesia Fishing Tournament in Majuro in early September. The major sponsor of the 17th annual tournament is Budweiser (Ambros-Guam) with co-sponsorship by Deloitte and Ching Fu. Other sponsors include ALRO, ACE International, Bank of Marshall Islands, Do it Best, ePacific, JoeMar Construction, KOOs, MALGov, Matson, MEC, MI Shipping Corporation, MIDB, MIMRA, MIR, MIVA, NTA, Office of the President, Pepsi, PII, RMI Ports Authority, RRE Hotel, Republic of China Taiwan, TCMI, V7AB. Both the RRE Hotel and the Marshall Islands Resort are offering discount packages for our visitors, which really help make traveling to Majuro a success, MBC said in a release. Visiting teams from Japan, Taiwan, Guam, Saipan, Pohnpei, Yap, Kosrae, Kwajalein and Samoa are set to compete in this event, with more teams possible. The team representing Majuro and the Marshalls Billfish Club will be the 2009 Atjang Paul Memorial Trophy winner Captain Wally Milne of Team Marah.
From the 8/7/09 issue of the Marshall Islands Journal Komol tata PII By SUZANNE CHUTARO Gas prices plummeted this week in Majuro with the introduction of a new player in the local gas market. Despite an eight-month lag Pacific International Inc. (PII) delivered on its promise to start selling gas and as of Thursday last week it is now selling gas at the pump for $4.90 a gallon — a 50-cent difference from the current highest priced gas on island. In January PII Operations manager Kenneth Kramer told the Journal the decision to sell gas arose from PII’s discontent with the four local gas stations that were not translating decreases in world fuel prices to the Majuro market. “Prices charged (at the pump) are ridiculously high,” Kramer said at the time. Until PII joined the market the price for gas at Riwut, SEPS, Aces One Stop and RRE Gas stations ranged from $5.15 to 5.40 per gallon. Riwut corner was the first to respond, dropping its price on Saturday to match PII’s. Both SEPS and Ace’s One Stop dropped to the $4.90 gallon rate on Monday, meanwhile RRE followed suit first thing Tuesday morning. The rapid price cuts by all the other fuel stations on Majuro in response to PII’s reduced price suggest that over the past year, the four stations were cooperating to maintain nearly similar prices at the pump — until last month when a 25-cent price spread opened up among the four. Mobil is currently the only supplier of gas on Majuro, and Mobil has not reduced its selling price in recent weeks. Meanwhile, although Mobil is supplying fuel to Majuro stations at around $4 per gallon, gas in America is retailing at the pump at less than $2.40 per gallon, meaning the wholesale price is under $2. But one of the original four Majuro gas station operators, who asked to remain anonymous, denies price fixing by the four downtown stations, saying that PII can afford to sell at a loss because “it is a big company that can survive off its other operations.” This operator claims “PII is only selling at a loss to penetrate the market. We’re only a small company and this new price has really eaten into our margins. It was already tough competing with the other three companies. Now it’s going to be double the hurt because the market share will be smaller.” This operator says that at this $4.90 rate they will “manage to just break even. “We will have to make some drastic changes,” the operator said offering that there may be some employee lay offs as a result. Meanwhile this same operator says they have also lost business on diesel sales because both PII and the Batkan Fuel Depot have been selling diesel for $3 a gallon, a pricing policy originated by the Batkan Fuel Depot. But Mobil’s dealer rate to the Majuro fuel stations has been slightly over $4 says the operator. Batkan Fuel Depot is buying its diesel from the Marshalls Energy Company, which sells diesel for under $2.50 a gallon. “How is it that ALRO, which buys its diesel from our same supplier Mobil, can sell fuel to the outer islands cheaper than what we can buy here in Majuro?” asks the operator. “Mobil is really the one who is making all the money here,” said the operator. RMI gets 7.1 million in Compact money The Marshall Islands Government’s Ministry of Finance received just over $7.1 million in US Compact-funded payments last month. According to a release from the US Embassy in Majuro, these payments are the fiscal year 2009 Compact Sector Grants for the month of July, Compact infrastructure projects for the month of July, the Enewetak Food & Agriculture Program, the fiscal year 2008 SEG, the 4th Quarter Kwajalein Landowner Payment, and the 4th Quarter Kwajalein Landowner Escrow Payment. The breakdown of these July payments which totals $7,149,524 is as follows: • Education Sector Grant, $1,315,000 • Health Sector Grant, $815,000 • Kwajalein Environmental Impact Grant, $20,000 • Ebeye Special Needs Education Grant, $215,000 • Ebeye Special Needs Health Grant, $195,000 • Public Sector Capacity Building Grant, $25,000 • Project Management Unit, $7,332 • Outer Islands Elementary Schools, $213,544 • Power Generation, $213,118 • Captitol Building Complex, $56,775 • Enewetak Food & Agriculture Program, $270,000 • FY08 SEG, $1,105,923 • 4th Quarter Kwajalein Landowner Payment, $1,562,000 • 4th Quarter Kwajalein Landowner Escrow Payment, $1,135,832
From the 7/31/09 issue of the Marshall Islands Journal
MAWC builds employee base After starting off with just eight employees two and a half years ago, Majuro Atoll Waste Corporation’s staff has grown to about 30, with all of its staff on pay rates higher than the minimum wage. “We hire people on the lower rates and then if they produce the work I advance them,” MAWC manager Roger Cooper told the Journal Tuesday, adding that his highest paid worker is on $8 an hour. As well as the Marshallese staff, Cooper is coordinating the group of Filipinos that are on island to reduce Majuro’s tons of heavy scrap metal into pieces that can be shipped off island. “We have teams at the PII (Pacific International, Inc.) yard and Public Works yard.” The steel cutters are not, however, working at full capacity. “We need 40 bottles of oxygen a day for the cutting equipment,” Cooper said, “but PII can only put out about 10 a day the moment. But they’re working on it.” So while the cutting of scrap metal is slow, “the guys are doing a lot of prep work for when oxygen supplies improve.” In other news from MAWC, which is a government-owned corporation similar to Marshalls Energy Company: • The corporation is working on a number of grants to pay for new waste collection equipment • A JICA senior volunteer, who is an expert in land-fill and recycling techniques, is due to join MAWC in late September • The corporation is working with the Asian Development Bank on a feasibility study for a waste incinerator that produces energy and fresh water. What would we do without water? In the last month, Majuro Water and Sewer Company has fixed three major water leaks in Delap. “One was across from former President Amata Kabua’s house, one was across from Stevedore, and the other was in front of the Capital Building’s main gate,” MWSC administrator Arlington Robert said on Monday. At the time of the interview, Majuro’s reservoir held 11.5 million gallons with pumping only on Mondays. “We raise it to two days when it reaches 12 million gallons,” he said. Leaks in the main water system are only visible during water hours. “We drive around looking for leaks, especially when we get reports of very low pressure.” The problem of illegal leaks is harder to deal with. “Since we began looking for illegal leaks in about 2000 we have probably investigated about three a year,” Robert said. None of these were in 2009. “Usually we hear about illegal leaks from people complaining about their neighbors. Our procedure is that a policeman and I will go to the house and take a photograph and get the peoples’ names.” It is then up to the police to file a report with the Attorney General’s office. As well, MWSC charges the household a $100 fine. “If they pay the fine, we will reconnect them,” Robert said. To the best of Robert’s knowledge none of the previous illegal leak cases has gone to court. A majority of households in RMI have improved water sources compared to 1999, according to the Demographic and Health Survey 2007 published by the Economic Policy, Planning and Statistics Office. “In urban areas, close to eight in 10 households have access to an improved water source while almost every household has access to an improved water source in rural areas.” Despite this data, Majuro’s Water and Sewer Company is this week still only pumping city water on Mondays. As well, according to the Health Survey, “Water from an improved source can be contaminated at collection during transportation, and during According to the World Health Organization, polluted drinking water causes about five million deaths around the globe a year and that safe water could prevent 1.4 million child deaths from diarrhea each year.
From the 7/24/09 issue of the Marshall Islands Journal Tobolar loses $1.4 million By SUZANNE CHUTARO Tobolar has lost $1.4 million since late 2008 because of the artificially high price paid to copra producers and a huge reduction in the world market price for coconut oil — developments that could herald the end to the primary cash crop in the Marshall Islands. Pacific International Inc.’s Chief Executive Officer Jerry Kramer, whose company holds the management contract for Tobolar, warns that the current copra price approved by the government is hurting the Delap-based copra processing plant. “The government wants Tobolar to pay a price that far exceeds the world price,” said Kramer, adding that while the government’s heart is in the right place, this price comes with consequences. According to Kramer, the world price for copra is at seven to eight cents per pound while government has ordered the price paid to copra producers be 22¢ per pound for the outer island producers and 23¢ per pound for Majuro’s producers. In recent weeks, outer island copra producers have been complaining that they have not been getting paid for their copra. In June, after a cry for help from Tobolar to the government, Cabinet approved a $500,000 subsidy to Tobolar. This fund however did not materialize until last week — a month after the approval — and only $170,000 of it was made available. “I understand government’s position to help the people but this has consequences, it costs,” said Kramer. “We have to bite the bullet and cut the price of copra.” Kramer said because of the high cost, Tobolar is in the red by $1.4 million. “We can’t sell our oil, we’ve used up our line of credit with Bank of Guam and we’re on the boarder line of whether or not Tobolar can pay its loan,” said Kramer. Tobolar’s last copra oil sale was in November 2008. Even as the world price of copra oil has fallen from $1,400 per ton back to $440 per ton now, Kramer said Tobolar still can’t find a buyer. Kramer warns that if the current RMI price for copra doesn’t reflect the world prices, then come 2010, Tobolar will need an additional $3 million subsidy just to cover the cost of buying copra from producers. But with no one buying the Marshallese copra oil, one is left with the question of what Tobolar will do with all the copra it continues to buy? Ship registry tops 50 million tons The Marshall Islands ship registry surpassed the 50 million gross ton mark earlier this month, continuing its steady growth, said International Registries Inc. (IRI) in a release this week. In less than six years, the Marshall Islands fleet has grown from 18.5 million gross tons and 626 vessels at the end of 2003 to 50 million gross tons and 2,044 vessels in July 2009 reflecting an average annual growth rate of 23 percent in terms of gross tonnage. The registry, which is administered by IRI, attributes its success to the decentralization of registry services to its 20 worldwide offices. The milestone was passed last week when the 11,259 gross ton new tanker Songa Emerald, managed by Songa Ship Management of the UK, was launched at Samho Shipbuilding in Korea.
Reform for RMI By GIFF JOHNSON FSM President Emanuel ‘Manny’ Mori has at least four recommendations for island governments, including the RMI, that are trying to solve financial problems and deal with huge government payrolls. Mori’s home state of Chuuk has been attempting to work its way out of a more than $40 million deficit over the past two years, and Kosrae is also trying reforms to deal with its lack of funding to meet payroll and services.In comments to the Journal, Mori listed his top suggestions based on experience in Chuuk and Kosrae: • “We must live within our means,” he said. “We cannot run government deficits.” • The islands need to encourage more people to stay in the subsistence system by fishing and farming to improve health and food security. This underlines why conservation of land and ocean resources is so important for the islands, Mori said. • Key to addressing an over-staffed government is getting people to shift into private sector jobs. “My warning to Marshall Islands officials is do not reduce the public sector without growing the private sector,” he said. About 400 government workers in Chuuk and 100 in Kosrae were let go as part of reforms. Many simply left to Guam or the United States. This has caused many problems for the FSM social security and health funds, as well as national and state tax revenue streams, because so much revenue was cut off overnight, he said. • By teaming up as a region, US-affiliated islands can get more attention and action from Washington. Mori said he sees cooperation among the three freely associated states as well as Guam and the Northern Marianas, in dealing with Washington as key to engaging Washington. During this week’s summit, Mori said he will be asking the Presidents to go to Washington as a group later this year to meet top Obama administration officials. “We can go as a group and impress upon the new administration that we in the Pacific have unique needs and we’d like to engage (with Washington),” he said. “It will be most effective if we all go.” Mori sees numerous possibilities with US relations since President Obama took over. “The attitude of US officials we’ve met so far has been very positive,” he said. “We still don’t know all the players, but the lower level staff are very positive about helping us.” The US government is now getting on board on climate change — “a big change” for the US, he said. “The whole world welcomes Obama turning from no position to ‘we’re with you.’ I’m very positive the Obama administration will help our islands.” New USAKA rules hurt Ebeye stores By SUZANNE CHUTARO A shopping policy at the US missile range at Kwajalein has retailers at neighboring Ebeye crying foul over loss of revenue and local government taxes. Ralik Store owner Tom Butler is calling in to question the new shopping policy at USAKA that he says is hurting the Ebeye businesses and the local government. “Most Marshallese (who work at USAKA) would come to Ebeye and spend their money on the island,” said Butler. “Now it seems USAKA is selling cola and other goods with no local or national tax. They are hurting Ebeye business.” USAKA’s Public Affairs Officer Vanessa Peeden confirms that the sale of retail goods to USAKA employed Ebeye residents has been in effect for the past year adding that “the USAKA/RTS Commander has designated certain retail shopping for C-badge contractor employed personnel who do not reside on USAKA/RTS.” According to Peeden, C-Badge employees are authorized to shop and purchase retail goods at Army/Airforce Exchange Service (AFES) retail outlets up to a total value of $250. Since the policy has been in effect, Ebeye retailers say they’ve seen a dramatic drop in sales. Triple J owner Robert Jones who was on Ebeye last week says that their records are reflecting a slowing of the economy on Ebeye and he wonders what role the tax-free competition from USAKA plays in the equation. Meanwhile Kwajalein Atoll Local Government’s Chief Administrative Officer Aeto Bantol said they are concerned with the USAKA policy because 80 percent of the local government’s revenue is dependent on Ebeye business. “Mayor Johnny Lemari is studying the situation and will probably meet with USAKA officials,” said Bantol. “While some think (the policy to allow Marshallese employed at USAKA to purchase goods) is a good thing, the local businesses are the ones suffering therefore making them lose money and most importantly, paying less taxes to the local government of Kwajalein.” Peeden says, however “over the course of the last year, the USAKA/RTS commander has discussed with the RMI government the sale of retail goods to C-badged contractors employed personnel. “USAKA/RTS provides purchasers with a detailed receipt of purchase so as to comply with Article V, paragraph 7 of the Status of Forces Agreement concluded pursuant to Section 323 of the Compact of Free Association. Said provision requires that property imported into the Republic of the Marshall Islands under exemption, which is subsequently transferred to a person not entitled to such exemption subjects that person to be liable for import duties and other charges according to the laws and regulations of the Government of the Republic of the Marshall Islands.” According to Jones, “Ebeye residents can buy a 12-pack of Pepsi or Coke for $3 on Kwajalein. This is about half of our landed cost with the high tax and freight rates on Ebeye. This creates the incentive for resale on Ebeye through the so-called black market. I feel they should be required to pay the same taxes as Ebeye merchants pay to the two governments.” Ralik Store’s Butler asks if it’s fair that local business are now forced with compete with a subsidized business that pays no local or national taxes, be it import or gross revenue tax? “I’m a small business owner on Ebeye,” said Butler. “We are seeing a 25 percent drop in sales since this has gone into effect.”
From the 7/10/09 issue of the Marshall Islands Journal
Mr. MEC The Marshalls Energy Company will see its first change of command in more than 23 years, with the MEC board on Monday naming David Paul as its new General Manager. MEC GM Billy Roberts is now in a 90-day transition period, with his last day on the job expected to be in early October. Roberts has managed MEC since early 1986. Paul is to be joined by an experienced Australian technical advisor who has experience in the power industry, including in the Pacific. The MEC board has established a new position for this second post. “Making these changes is a step to reorganizing the company,” said MEC board Chairman Public Works Minister Maynard Alfred (pictured). Paul will start July 20, beginning a transition with Roberts for management of the company that oversees Ebeye’s power company, Majuro Water and Sewer Company, Jaluit and Wotje power operations, and installation of solar equipment on the outer islands. Paul is in the process of resigning from his post as Mobil Oil Micronesia’s territory manager for the RMI and FSM markets, a position he’s held for four years. Prior to that, from 1998, he worked at the Ministry of Foreign Affairs and with the Office of Compact Negotiations. “This is a great challenge and opportunity to be part of an organization that is vital to the economy and development of the Marshall Islands,” Paul said. Majuro’s power operation was launched in 1982 by a British company known as IPSECO. MEC was incorporated as a company two years later and managed as a joint venture with IPSECO. Roberts, who was brought to Majuro by IPSECO as a power plant engineer, was named GM of MEC in March 1986, when the MEC-IPSECO partnership dissolved with IPSECO’s bankruptcy. “This was not an easy undertaking for me as Chairman,” Alfred told the Journal of his giving notice to Roberts earlier this week. “Billy is a talented chief executive who has worked since the company was established.” Roberts tendered his resignation from MEC in mid-2006, and his final day was to have been October 2006. But former President Kessai Note asked Roberts to stay on for an indefinite period to help MEC get through a crisis period that was developing. Hacker: Poverty is a big issue There is serious hardship in the Marshall Islands, particularly in urban communities, RMI chief planner Carl Hacker told a group reviewing RMI progress on meeting “Millennium Development Goals.” “In the field, you see how big an issue this is,” said Hacker, whose office has been conducting a series of surveys on Majuro, Ebeye and the outer islands. People would be shocked to spend two days in the community to see houses with no water or electricity, and so many kids that you wonder what are they eating.” He said the water survey now being conducted shows that from the bridge to the airport, the percentage of houses with no access to water is high, he said. In the Ajeltake to Laura area a big problem for the environment is for many homes, the beach is their bathroom, he said. “There is plenty to be concerned about,” Hacker said. The demographic and health survey “showed 22 percent of homes headed by women, and only 30 percent of women working (in RMI),” Hacker said.“Those are prime indicators of poverty.” Hacker also raised concern about the relatively high budgets for the ministries of Health and Education, which have more than doubled since the 1990s.“But we’re still seeing a lot of the same results,” he said. “We need to look at outputs. We’re thinking too much about the funding and not worrying enough about results.” The government ability to provide services to the public “is going to get tougher because of higher debt issues and Compact funding going down,” he said. “Efficiency is the key. If we don’t make some changes now, we will have real problems soon.” Hacker believes an important missing element in decision-making is using statistical information to inform decisions by government departments. “Senior management needs to know how to use these numbers throughout the year (in running their programs),” he said.
From the 7/3/09 issue of the Marshall Islands Journal
1 million in Compact money not spent The Marshall Islands government did not spend nearly $1 million of Compact funds provided in fiscal year 2008, requiring it to be returned to the US government recently for reallocation to a future fiscal year. Nearly half of the $978,587 unspent by September 30, 2008 has already been given back to the RMI, with the balance to be put into FY2010, which starts October 1 this year. This unused balance is the highest ever since the new Compact went into effect in 2004. It also includes $153,852 in unspent money from FY2006. The US Embassy provided a breakdown of the unused Compact funds for FY2008: • Education: $0 • Health: $252,862 • Kwajalein Environmental Impact: $7,554 • Public Sector Capacity Building: $128,891 • Ebeye Special Needs Education: $326,644 • Ebeye Special Needs Health: $108,784 • FY06 Unused Carryover: $153,852. In FY 2004, the first year of the new Compact, unspent funding amounted to $198,770. It has increased every year since then, to $295,154 (FY2005), $573,436 (FY2006), $601,830 (FY2007) and $824,735 (FY2008) plus $153,852 (FY2006) for the FY2008 total of $978,587. “All FY04-FY07 carryover funds have been re-granted to the RMI,” said US Embassy-based Interior Department grants official Alan Fowler. “Out of the $978,587 in FY08 carryover funds, $435,428 has already been re-granted in FY2009 as per a RMI government request for use by KAJUR on Ebeye. “These were the Ebeye Special Needs funds for Education and Health (listed above). These funds were drawn down by the RMI in March. The remaining $543,159 is included in the FY 2010 Compact allocations and will be available for use on October 1, 2009.” Diver rushed to Kwajalein Another Majuro diver suffered the “bends” while diving last Saturday, forcing the Ministry of Health to pay for a medical referral to Kwajalein Hospital because Majuro Hospital’s hyperbaric chamber does not work. The diver, Raimon Anmontha, works for a local tropical fish export company, and experienced problems on a deep dive Saturday. The Laura resident was rushed into Majuro Hospital’s emergency room Saturday afternoon after experiencing symptoms of decompression sickness, including vomiting blood. The Ministry of Health moved quickly to organize a medevac to Kwajalein, and AMI flew Anmontha to Kwajalein early Sunday morning. The AMI charter flight cost the Ministry of Health more than $5,000. As of Wednesday, the diver was reported to be on his fourth period of time inside Kwajalein Hospital’s hyperbaric chamber. He is the second diver during June to seek treatment at Majuro Hospital for the bends. The hospital’s hyperbaric chamber has been here since 2007, but has not been in operation.
From the 6/26/09 issue of the Marshall Islands Journal Million for Mili By DOUGLAS HENRY
A proposal to invest $1 billion for the development of Mili Atoll is on the table by representatives from the Russian government. According to Mili Senator Kejjo Bien, the Russian government is proposing to invest $1 billion in developing hotels, fisheries, and scuba diving on Mili. “It’s not just for Mili, but for the betterment of the Marshall Islands,” said Bien. Vasily Shestakov, vice-chairman of the Russian party ‘Just Russia in the Duma’ — and a former judo partner and confident of President Vladimir Putin — along with Dr. Ei Ho Kim, who was appointed by President Litokwa Tomeing in 2008 as RMI’s Special Presidential Economic Advisor, traveled to Mili last week with Senator Bien to hold meetings with landowners on Mili. Bien told the Journal the next step is to request and organize a meeting in Moscow between the RMI and Russian officials to discuss the proposal. As part of the development proposal he said he hopes to designate Mili as a port of entry to allow direct and easy access of equipment and material to the Atoll. Bien, who is hoping to wrap up the arrangements between the two governments within the next two months, said if successful “building equipment and materials will also be funded by the Russian government.” Japan helps on fuel issue The Marshall Islands this past week was beneficiary of nearly 900,000 gallons of fuel, a shipment that arrived in the islands as an outcome of an assistance request made a year ago by President Litokwa Tomeing’s administration to the Government of Japan. According to a press release issued by the Marshalls Energy Company, the arrival of the tanker vessel MT YC Clover into the Port of Majuro is an important occasion for the people of the Republic of the Marshall Islands. The tanker vessel is carrying fuel purchased by the people and Government of Japan trough the Japan’s Non-Project Grant Aid (NPGA) program. This is the first time the Republic of the Marshall Islands has received an award under this program. The tanker vessel MT YC Clover has been chartered by SK Networks of Korea to deliver fuel to the Marshalls Energy Company under the existing supply contract between the two companies. The vessel had available the space required to carry the 892,000 gallons of diesel fuel in addition to the 1.5 million gallons of fuel requested by the Marshalls Energy Company which was already loaded on board the tanker. As a result of President Litokwa Tomeing’s visit to Japan in late 2008, the Japan Non-Project Grant Aid program approved the Republic of the Marshall Islands application for assistance as requested during the Economic Energy Emergency that the government of the Republic of the Marshall Islands declared in June of 2008. The government of Japan responded with an approval of approximately 200 million Yen to be dispersed the Non-Project Grant program. The NPGA program of 200 million Yen for the Marshall Islands is administered by the London based international procurement agency Crown Agents Foundation. Crown Agents Foundation staff based in Japan and London visited the Marshall Islands earlier this year to finalize the arrangements for the purchase of the fuel supplies and to arrange shipment of fuel products to the Marshalls Energy Company from SK Networks from Korea. His Excellency President Litokwa Tomeing, the government and the people of the Republic of the Marshall Islands would like to convey their appreciation to the people, the government of Japan and the Charge d’Affaires, a.i. Kazuyuki Ohdaira and the staff of the Embassy of Japan for their prompt attention in coordinating this important assistance to the energy needs of the RMI.
From the 6/19/09 issue of the Marshall Islands Journal
Tax collection down 4 percent Tax collection levels through April are down about four percent compared to 2008, according to the Ministry of Finance. Majuro’s collection rate is significantly lower than Ebeye’s, according to figures supplied by Assistant Secretary Bruce Bilimon. “For the Majuro comparative analysis, we only focused on the tax revenues, meaning we excluded non-tax revenues including ship registry, Republic of China grants, fees and other revenue,” Bilimon said. The figures for October 2008 to the end of April this year show that $12.1 million was collected in Majuro, about $465,000 less than the same period for fiscal year 2008. Ebeye data show tax revenue from 2008 to 2009 being nearly equal. Through April, Ebeye’s tax collection showed a $21,000 shortfall when compared to the same period in 2008. “Of significance, we are realizing a drop on import tax that we expected due to enacted laws on selected food items and MEC import tax exemptions,” Bilimon said. “Conversely, we are realizing an increase in the Gross Revenue Tax (GRT) compared to 2008.” Bilimon said “the significant drop has been on the import tax side, and for a good purpose — to help our people.” He said the solution to lower tax revenue will be forthcoming from the tax reform plans now in progress to “bring about the changes that as a country we will need to take if we are to sustain going forward.” Bilimon said he “saluted the staff for doing their best when it comes to administering our tax process and procedures effectively, and ensuring tax laws are being followed.” He promised to continue developing the tax office’s professionalism to serve the interests of the RMI. “Of course, our job will be much more successful if everyone, taxpayer and tax collectors, observe their duty to our country,” he said. Boot camp to build jobs for youth By GIFF JOHNSON With the College of Marshall Islands’ accreditation woes behind it, the Majuro institution is branching out to offer new training opportunities to Marshall Islanders. Its latest effort is the “ABC Toolbox” — ABC for “Academic Boot Camp.” With the financial support of the National Training Council and its own money, CMI is gearing to launch its first group of approximately 60 students to attend a live-in, 10-week session that aims to develop skills that will allow entry level employment in construction jobs and help students aiming for Job Corps training to improve their chances, said CMI President Wilson Hess. The program is expected to start in August. The program will be held at CMI’s Arrak Campus. “The aim is to introduce basic skills for employment,” Hess said. It will include a focus on reading, writing, computers and math. But it won’t end there. Part of the training will be to develop work skills and attitudes needed to succeed, he said. Those eligible are people who have graduated from high school, GED or NVTI. The origin of the plan was to develop people who can compete for jobs in Guam, with the coming military buildup. But Hess says the training should provide skills that will help ABC Toolbox graduates get jobs in the local construction industry or go on to successful completion of Job Corps programs. “At CMI, we see kids who can’t measure with a ruler or read a thermometer,” Hess said. “These are every day tasks.” The ABC Toolbox aims to develop these types of skills among participants. “After a 10-week immersion, there should be demonstrable ability to perform in a work environment,” Hess said. Tamara Greenstone, a former field director for WorldTeach, will direct the program that is currently seeking staff to deliver the various parts of the program. The longer-term aim is to run this program two-to-three times with NTC and other donor support, test and monitor student progress, and “then get it approved by the United States Department of Education as an English as a Second Language educational/vocational program,” Hess said. “Then students attending the ABC Toolbox will be eligible for Pell grants” — a development that will help sustain the program.
From the 5/29/09 issue of the Marshall Islands Journal BOMI to get Hawaii branch? By GIFF JOHNSON Bank of Marshall Islands effort to open its first branch in the United States will move forward this week with RMI Banking Commissioner Ann Marie Muller (pictured) issuing a letter approving BOMI’s application to the state of Hawaii. “There’s still additional work to be done for the bank to qualify on its own merits as a standalone bank with its own ABA (American Bankers Association) routing number,” Muller told the Journal. “But it shows significant progress has been made for my office to issue an approval for application to the State of Hawaii.” BOMI hired the Los Angeles-based Secura Group — one of several US firms recommended by Muller — to assist it in the application process. Although the application process is at the very start, a BOMI official explained the significance of the move. “The single most important aspect is Ebeye has no access to negotiate checks off-island,” said BOMI’s Chief Information Officer James McLean. “We’re their only bank. If this goes through, it will give Ebeye banking services it needs.” The bank is seeking to set up only a “clearing branch” to act as a way to clear BOMI checks in the US. Currently, individuals and businesses with BOMI accounts can only transfer money to US companies by wire transfer — or by opening an account with a US bank. The branch, if approved, would not handle deposits or issue loans. Muller said her office has been engaged over the past year with Secura Group officials. “The bank management and compliance department also has done a significant amount of work to address the Banking Commission’s recommendations,” she said. The RMI Banking Commissioner’s approval is the first step in BOMI’s application process. It then must get approval from the Hawaii State Banking Commission, then get the okay from the US Federal Reserve. Muller said BOMI success in establishing a US bank branch is important for economic development of the country, and she is hopeful that the US government will “help the RMI achieve economic development and progress. “This is significant progress and we are hoping for the best to come,” Muller said. “Helping our financial sector is a major step toward that goal.” She noted the bank is pursuing the most difficult option among those recommended by the Banking Commission in 2006. That same year, Citizens Security Bank of Guam terminated its relationship with BOMI because of increasingly strict US banking requirements for dealing with foreign banks, ending BOMI’s ability to have its checks transacted in the US. Regional fisheries office for Majuro By GIFF JOHNSON Majuro is to host an important new regional fisheries office. Ministers from eight Pacific nations that control the majority of the $3 billion in tuna caught in the Pacific voted earlier this month to make Majuro the headquarters for the PNA Secretariat. Over the past year, the “Parties to the Nauru Agreement” (PNA) countries have flexed their muscles, seeking to enforce tuna catch limits to prevent over-fishing while at the same time increase the revenue flowing into the islands from the fishing industry. Currently Pacific islands receive less than five percent of the total catch value, or about $150 million. Marshall Islands Marine Resources Authority Director Glen Joseph told the Journal fisheries ministers from the eight PNA nations — RMI, Federated States of Micronesia, Kiribati, Tuvalu, Palau, Nauru, Solomon Islands and Vanuatu — voted for the new secretariat to be in Majuro. The move is being fast-tracked with a study team established to evaluate details of costs and administrative issues associated with setting up the new headquarters. A special meeting to focus on the secretariat is scheduled for June, Joseph said. Foreign Minister John Silk confirmed the development before Nitijela recessed from its recent session. RMI was the only nation seeking to host the new regional body. With the approval of the PNA country ministers, the issue is now going to the RMI Cabinet for review, approval and action. Joseph expects the new headquarters to start with about five staff. Based on a previous bid by the RMI to host the Tuna Commission headquarters (which is in Pohnpei), a floor in the MIDB Building or the second floor of the K&K Payless Long Island building are among venues under consideration for the PNA HQ. The PNG government has committed $1 million to developing the PNA Secretariat, Joseph said. Joseph said establishment of the PNA Secretariat is not an effort to break up the Forum Fisheries Agency (FFA), which has represented all the independent countries in the region since the 1980s, but is rather an effort by PNA to fully establish itself. “PNA has always been a group within the FFA,” Joseph said. “We’re not advocating a split.” He said a more powerful PNA will translate into greater economic benefits for both PNA and non-PNA countries in the region. “There will definitely be spinoff benefits for non-PNA nations,” Joseph said. “This move is a catalyst for change. The status quo is not acceptable. We want a larger slice of the $3 billion pie.”
From the 5/22/09 issue of the Marshall Islands Journal MediSource to help on diabetes By DOUGLAS HENRY A private pharmaceutical business is stepping up to help treat a major lifestyle disease: Diabetes. “MediSource Pacific will soon be helping diabetic patients by providing their medical needs,” said Sandy Alfred, manager of MediSource Pacific. MediSource sells prescription and non-prescription medicines and medical instruments and caters to individuals and agencies such as Majuro Hospital. “We’ve provided maintenance and repair to Majuro Hosptial’s medical equipment,” Alfred said. The pharmaceutical company, which is on the ‘back road’ behind Pacific Basin Wholesale in Uliga, also provides services to Ebeye Hospital, the 177 Health Care Plan, and the Department of Energy, he said, adding that he has not yet ventured into small clinics. The pharmacy brings in their medical products from suppliers in Australia, Canada, and the US “because we believe in quality,” Alfred told the Journal. According to Alfred, it is possible to negotiate for a best price, “but we can’t compromise on the quality.” Alfred used to be the administrator of Majuro Hospital, but he made the leap into the private sector because: “ I wanted to fulfill a dream to operate a pharmacy.” He said that his business allows him to help the community on their medical needs and “switching from an employee to an employer, means I get to support my employees’ families.” Alfred graduated from Creighton University, School of Pharmacy, Nebraska, in 1989 and then worked as a pharmacist in the US for 15 years.
Last ditch bid to lure JAL to RMI By SUZANNE CHUTARO
The Marshall Islands has hit, yet again, another snag in its bid to jump-start its tourism industry as air access via the Japan Airlines (JAL) direct Japan-Majuro charter begins to crumble before it even took off. Marshall Islands Tours owner Satoshi Yoshii, who has been acting as the liaison between JAL and RMI, told the Journal earlier this month that he is hoping to bring in another JAL charter in August. But this all depends on several factors. Yoshii said JAL is now seeking approval from the RMI to contract Continental Airlines to handle all of its ground handling services. According to Yoshii, when JAL first approached the government a verbal request from the government under the Note administration was that JAL contract Air Marshall Islands to provide the ground handling services. But recently, in what AMI General Manager Bill Capelle describes as a “cost-saving” measure, AMI had suspended its IATA membership — a membership, which Yoshii says JAL requires in order for a third-party to provide service for JAL. Capelle told the Journal that AMI is trying to focus its efforts on returning regular service to the outer islands. Yoshii’s recent visit to Majuro was a last push effort to secure permission from the government for JAL to contract Continental for its ground handling service needs. While in town Yoshii met with officials from the Ministry of Foreign Affairs and Marshall Islands Visitors Authority (MIVA). According to MIVA’s General Manager Delores deBrum-Kattil, Yoshii also put a request for the RMI to guarantee 100 seats on JAL in order to secure the planned August charter. Before departing for Japan Yoshii said all he needed to make the August charter happen was a permission letter for JAL from the RMI government. MOFA Secretary Kino Kabua told the Journal last week that she was waiting on her staff to provide her with the details of JAL’s request and to review a letter that was being drafted by the Ministry to respond to Yoshii and JAL’s request. Kabua and Foreign Minister John Silk flew to Japan to accompany President Litokwa Tomeing at the Pacific Area Leaders Meeting on Tuesday. This latest hurdle creates a feeling of dismay as confidence in RMI’s tourism industry continues to wither away. The JAL news follows the announcment that two of Majuro’s three major hotels are now up for sale.
From the 5/15/09 issue of the Marshall Islands Journal Tobolar loss Local film a hot item in stores From the 5/1/09 issue of the Marshall Islands Journal Copra production down From the 4/25/09 issue of the Marshall Islands Journa John Silk works on diplomat for DC From the 4/3/09 issue of the Marshall Islands Journal Are RMI’s Millennium Goals even possible? From the 3/27/09 issue of the Marshall Islands Journal MEC lures Navy to RMI The visit this summer by the US Navy vessel Dubuque is giving the Marshalls Energy Company the opportunity to promote Majuro as a destination for regular US Navy refueling visits. Landowners hear worth of tourism Many Marshallese are unaware of the importance and benefits of tourism, the head of the Marshall Islands Visitors Authority said at Monday’s opening of National Tourism Week at the ICC. From the 3/20/09 issue of the Marshall Islands Journal Bed boost Majuro’s new hospital will go out for bid this summer, with groundbreaking to start construction now set for November.
From the 3/13/09 issue of the Marshall Islands Journal Kramer: We need grant writers now By GIFF JOHNSON The Marshall Islands has missed out on dozens of opportunities to bring “new money” into the RMI economy, but those opportunities have not been lost forever, says a local businessman. In order to capitalize on potentially thousands of international grant options open to the RMI, the government urgently needs to establish a grant office, said PII CEO Jerry Kramer. His key point: Hiring skilled people to write grants that bring money into the RMI “grows the economy,” creates new jobs for Marshallese, and increases tax revenue for the government — without raising tax rates as the government is planning to do. Kramer says both the Federated States of Micronesia and Palau appear to be taking better advantage of European Union, Japan and US grant funding options than the RMI. This was confirmed by an article in this week’s Marianas Variety reporting that Palau will be receiving almost $400,000 from the Obama Administration’s workforce investment program that is funded under the American Recovery and Reinvestment Act. “We need to hire people able to do the (grant writing) job,” Kramer said. It will require paying high salaries to qualified grant writers, “but at the end of the day, they will bring in tens of millions of dollars.” Tax revenue collected by the RMI is down 30 percent this year and that reflects the downturn in the economy, he said. “We need the jobs (these grants) create, people need expendable income, and the government needs the tax revenue.” Kramer mentioned specifically EU funding for energy projects, Japan’s “Cool Earth” grant program, Japan “soft loans,” JICA large-scale infrastructure funding available on an annual basis (but from which the RMI has had only one project in nine years), Japan non-project funding that FSM states are using for fuel and other support, and hundreds of US federal programs waiting to be tapped. “We need to grow the economy,” he said. Kramer worries that plans to increase taxes when the economy is contracting could result in its collapse. Cargo ruling hits customers A suddenly enforced rule has sparked concern among local businesses and individuals who send freight on Continental. The US Transportation Safety Administration (TSA) has directed Continental to require all freight to go through a cargo agent, consolidator or freight forwarder. Mike Slinger, whose company exports tropical fish, is one of many hard hit by the sudden change. “It adds another layer of paperwork and cost that makes our products less competitive,” he said. The only approved agents who can provide freight to Continental in Majuro are DHL, TNT and Marshall Islands Fishing Venture. Slinger said Continental is working with TSA to try to find a solution to this. Human remains, small packages, tropical fish and other marine life — anything that has normally been sent on Continental — is affected by the new ruling. Slinger said TSA’s abrupt enforcement of the rule provided no time to sort out an alternative. It is affecting all Continental destinations in the freely associated states. From the 2/27/09 issue of the Marshall Islands Journal Jerry: ‘We’re letting millions slip away’ By GIFF JOHNSON PII chief executive officer Jerry Kramer’s message to anyone who is listening: there is money available to RMI that is not being accessed and that means jobs, spending money and tax revenue are being lost. “The government is not taking a holistic approach to working with its ministries and agencies to develop the economy,” he said. “The government needs revenue to provide essential services but increasing taxes takes money out of the community. Growing the economy is the direction the government needs to go in.” The key to improving life in the country is getting disposable income into people hands by creating jobs in the business sector, he said at last week’s Chamber of Commerce meeting. His idea is to create more revenue at lower levels of taxation by increasing the volume. Among areas where the RMI can improve, according to Kramer: • US Compact construction money is not flowing as quickly as it could be, and this means it isn’t turning into jobs. • The RMI is eligible for a $6 million to $10 million annually in major infrastructure projects from Japan, “but we haven’t had one project in five years.” A total of $30 million to $50 million has been available but RMI “hasn’t taken advantage of it.” • Up to $40 million in US FAA money could be in danger because of a law passed in 2008 concerning land-filled areas. The FAA-funded airport road diversion project is being held up by the Nitijela law. “A one-sentence change in the law can bring in $30 million to $40 million for construction work and jobs.” • The European Union, Asian Development Bank and other international donors have tens of millions of dollars available for a range of grant-related projects. • The RMI is eligible for multiple US federal programs for which it is barely scratching the surface right now. • The government sees funding for the Marshall Islands Visitors Authority as an expense, but Saipan and other islands see it as an investment. “Tourism brings in money, revives the culture, creates jobs and is a market for handicrafts.” Every agency, ministry and non-government group needs to buy into Japan Airlines and make it a top priority to develop the charter service. • Encouraging yacht tourism helps the economy and the Marshall Islands is a preferred place to visit in the region, but our customs and immigration rules are keeping yachts away. “There are other revenue sources,” he said. “If the right buttons are pushed to grow the economy we can get more money into the country.” One good way to shake loose money available to the government from overseas donors is to hire a good grant writer. “What would the addition of $30 million a year into the economy do for us?” he asked. “That’s jobs, spending money, tax revenue.” People talk negatively about the economy because people are feeling in poor condition, he said. “If people have money to go to the stores, they are happy.” Hope for more yachts During his ‘Tax According to Kramer’ speech at last Friday’s Marshall Islands Chamber of Commerce meeting, PII executive Jerry Kramer noted that there were hopes that the number of yachts visiting RMI could triple in the next few years. Mieco Beach Yacht Club committee member Karen Earnshaw later in the meeting agreed with this statement, adding that for this to happen a number of new facilities need to be added to the lagoon’s foreshores. “The yachts need a good haul-out facility, with a ‘travel-lift’ and shower and bathroom access,” she said. As well, she explained that there is a need for the existing 90-day visa limit for non-Americans to be extended to six months. “The yachts who want to escape the South Pacific cyclone season need to be able to stay here six months, not just three months.” In related news, a sub-committee of the Marshall Islands Tourism Association is currently preparing suggested additions to RMI’s Immigration regulations, which are currently under review by the government. The recommendations are aimed at raising tourist numbers and include an outline for a ‘cruising visa.’ From the 2/20/09 issue of the Marshall Islands Journal Visitor numbers plummet in 2008 The number of people visiting the Marshall Islands took a dive last year compared to 2007, according to figures released this week by the Marshall Islands Visitors Authority. A total of 6,022 people came to RMI in 2008, a 17 percent drop over the 7,200 who visited in 2007, MIVA reports. Leading causes of the drop in visitors appear to be the cutback in Japan Airlines charter flights, the halt to diving at Bikini Atoll and the lack of flights directly from Australia, which makes it difficult and expensive for visitors from south of the equator to get to Majuro, according to MIVA’s Emelyn Simon (pictured above). The number of visitors from Japan was down as a result of a dip in charter service. There were six JAL charters in 2007, but only two in 2008, according to Simon. Bikini Atoll Divers called a halt to its tourism program early in 2008 after having a string of divers stuck at the atoll when AMI’s planes were grounded in late 2007 and 2008. Although Bikini didn’t account for a huge number of visitors, it was averaging more than 200 per year. “The fact that Air Marshall Islands was down for quite a long while resulted in Bikini (canceling) fully booked diving tours,” Simon said. When Our Airline quit flying to Majuro last year, it ended direct flights from Brisbane that were a small, but significant contributor to the local tourism industry. Simon also said the Marshall Islands cannot escape the overall global economic downturn. The 6,022 visitors in 2008 was higher than in 2006, which saw 5,780 come to RMI. The statistics for these years include all arrivals by plane, but don’t include incoming yacht visitors. The ups and downs of taxes An important missing element from last week’s report on RMI tax revenue being significantly down compared to a year ago is that historically collections pick up during the summer months, according to Ministry of Finance Assistant Secretary for Tax and Revenue Bruce Bilimon. “The quarters are not all the same (in terms of revenue collection),” he said. “During the summer, tax collection goes up.” He also said that there is no question that tax compliance is much improved with more aggressive action by Finance officials. Bilimon did note that two changes in tax laws made by the Nitijela late last year to respond to the economic and fuel crisis have affected tax income for the government. The elimination of tax on MEC fuel imports and the elimination of import tax on certain staple food items have all reduced the flow of revenue to government, he said. Coupled with these tax losses is the overall negative economic situation that is impacting not just Marshall Islands but the whole world at this time, Bilimon said. “The report seemed to suggest we are not collecting,” he said. “We’re doing our best.” From the 2/13/09 issue of the Marshall Islands Journal PII wins $25 million Chuuk contract By Suzanne Chutaro While the welcoming of 2009 has been marked with news of economic doom and gloom, Chuukese residents in the downtown Weno area have much to look forward to in 2009. After years of being synonymous with pot-holed roads, Chuuk State is set to begin phase one of a three-phased US Compact-funded capital improvement project that will give the island a much need face lift. In January, the Federated States of Micronesia’s national government awarded a $25 million contract to the Majuro-based construction company Pacific International Inc. to begin the first phase of the three-phased project aimed at fixing Chuuk’s road and sewage system. According to PII operations manager Kenneth Kramer, phase one of the project involves the installation of a new sewage system under a four and a half mile stretch of road in downtown Weno. Once all this underground work is completed then the contract calls for pavement of this same stretch of road with a nine-inch thick concrete cover. “Along this stretch of road you can only drive at about five to seven miles per hour,” said Kramer describing the current state of Chuuk’s road. “It’s like Majuro back in the 1990s where it takes you 30 minutes just to drive four and a half miles.” Kramer said that while PII will be taking some of its key Marshallese workers from Majuro to work the Chuuk road project, PII will also hire locally from Chuuk. Gordon Macpherson, who was PII’s project manager in the late 1990s for the Japan-funded Majuro road improvement project, will again be the project manager for PII in Chuuk. Meanwhile in related developments, Kramer says PII is lining itself up to bid for other construction projects in FSM. These include two US Federal Aviation Administration (FAA) funded airport projects on Chuuk and in Kosrae. With the number of US Compact capital improvement projects seemingly slowing down in Majuro and the limbo status of FAA funding available to the Marshall Islands because of the newly passed landfill law, looking at opportunities with our neighbors in FSM may be the key to survival for RMI’s construction companies. RMI tax income sees big decline A bleak report on RMI tax collection was issued this week by the national government. It shows that in the first four months of fiscal year 2009 (October 2008-January 2009), only $5.5 million was collected. This rate of collection is 30 percent down from FY2008, the government report said. If the rate of tax collection in the first four months continues, the Ministry of Finance would collect only $16.8 million in tax this fiscal year compared to $23.8 million last year. Of significance is that after hitting a tax collection high of $25.5 million in FY2007, collections dropped by over $1.7 million last year and look to be dropping much further this year. “Even if some under-estimation is taken into consideration, the final (tax collection) results could be well below what was budgeted, having a severe impact on (government) expenditures,” the RMI report said. Although the average salary went up in FY2008 to $9,706 compared to $9,523 in 2007, the report noted that the total number of jobs in RMI went down in 2008 compared to the year before. The job picture “underscores the need to look at ways to expand employment in the private sector,” the report said. It also points out that job cutbacks are expected to continue at the US Army base at Kwajalein this year, which, “given their higher wages, will severely impact conditions on Ebeye and Enniburr.” From the 2/6/09 issue of the Marshall Islands Journal Fish wish By GIFF JOHNSON It’s time for Marshallese to get seriously involved in commercial fishing — and the Marshall Islands Service Corporation is ready to lead the way. The local company has hired former Marshall Islands Marine Resources Authority Director Danny Wase as a consultant to help locate joint venture partners in a soon-to-be-launched purse seine fishing operation. “It’s time for us as resource owners to participate in the fishing industry,” Wase told the Journal Tuesday. “License fees (for foreign vessels) bring peanuts compared to what the fishing countries make.” “This is an important project,” said MISC President and CEO Patrick Chen. “We need to get into fishing to bring money into the RMI.” Wase said he and Chen recently spent time meeting with fishing companies in Taiwan, Japan and S. Korea. “There is a lot of interest in joint venturing with us,” he said. Fishing company owners in Taiwan “are showing a lot if interest,” he said, but added: “We’re looking at all options.” The preferred option for MISC is to buy a new purse seiner, Wase said. These cost in the range of $15 million. He said the plan is to get a JV partner to kick in half of the purchase cost. Wase believes that there is a significant difference between RMI government-funded fishing operations in the 1980s — which failed — and MISC’s current plan. “The previous fishing ventures, management was overseas so we really didn’t know what was happening,” he said. “With this, we’ll control it locally, so we’ll know the costs and the amount of sale proceeds.” Wase said it will take 12-to-18 months to build a new vessel once investment partners are secured. NTA signs for fiber optic cable The Marshall Islands National Telecommunications Authority has signed a contract with Tyco Telecommunications to install an undersea fiber optic connection to Majuro and Ebeye, wrapping up six years of off-again, on-again negotiations. More than six years in the planning, NTA has finally executed a contract with Tyco, a business unit of Tyco Electronics, to construct a Micronesian Cable System (MCS) extension to the Kwajalein Cable System (HANTRU-1). “The extension into Majuro and Ebeye, which is part of a larger trunk from Guam to Kwajalein, will provide high bandwidth connectivity between the Republic and the rest of the world,” said NTA General Manager Tony Muller. “The opportunity to connect to the global fiber optic network will be nothing short of transformational for an isolated country like the Marshall Islands.” Muller added: “The extension we are deploying with Tyco Telecommunications is essential to our development and will enable us to provide services to our customers that we have only dreamed about.” The extension will comprise one fiber pair segment, from an optical branching unit outside of Kwajalein Atoll, serving a dedicated fiber pair on the HANTRU-1 trunk. When integrated into HANTRU-1, the Majuro and Ebeye extension will have direct connectivity back to Guam. The fiber pair will have an ultimate capacity to transmit sixteen 10 Gbps wavelengths, shared equally with the FSM Telecommunications Corporation. Since Guam is a regional telecom hub, NTA will have a variety of onward connectivity options. The NTA extension is being financed through the U.S. Department of Agriculture Rural Utilities Service (RUS) Telecommunications Loan Program. “With the backing of our government, we’ve acquired an $18.5 million loan with RUS and have executed down payments to secure our participation in this project,” he said. The contract was executed on January 12, and the project is scheduled for completion in March 2010. From the 1/16/09 issue of the Marshall Islands Journal UES heads to bowling alley By SUZANNE CHUTARO The plight of Uliga Elementary School students may soon be over. Before departing Monday night, RMI’s Ambassador to the United Nations Phillip Muller told the Journal that his family business — Krystal Enterprises — has been in discussions with the government and they have agreed in principle to convert the Majuro bowling alley building into Uliga Elementary School. “It’ll be a win-win situation for the government and the students,” said Muller. Negotiations are still ongoing but he expects that by the 2009-2010 school year, the UES students will have a new home opposite EZ Price Mart. He said they are now finalizing terms for the purchase with the Minister of Education, Internal Affairs and the Marshall Islands Development Bank — which will front the funds to allow the government to buy the facilities. Danny Wase, who operates Awa Zero night club at the bowling alley, said he has been advised of the possible use of the facility for a new UES school and added: “Obviously we’ll have to move.” But he said he has been given no date to vacate. In the meantime, he has already started looking at other options for housing the popular nightspot. He said the loss of the bowling alley if the new plan goes through is unfortunate because it is a unique recreation option on Majuro. “All ages can play (bowl) at the same time,” he said. “You can’t play basketball with your daughter, but you can bowl with her, and she might beat you,” he said. Wase said the original plan for a replacement school for UES located next to Assumption was excellent in part because of the significant recreation facilities it included. “A lot of good things would happen if UES was constructed at that location,” he said. AMI lease plane from Australia Air Marshall Islands expects to have a Dornier-228 flying to the outer islands before the end of January — the first time in more than 17 months that a Dornier has been operating in the RMI. AMI General Manager Bill Capelle said the company has leased a Dornier from an Australia-based firm, and the plane is expected to arrive Friday or Saturday this week. According to Capelle, from the date of its arrival it will take about a week of flight tests and pilot refresher training before it goes into regular service to the outer islands. Since AMI’s own Dornier-228 was grounded in August 2007, about two-thirds of the outer islands with small airstrips have been without air service. The larger Dash-8 is able to service only about one-third of the available runways. The Dornier-228 is being ferried from Melbourne and was expected to leave Australia for Majuro on Wednesday this week, Capelle said.
From the 1/2/09 issue of the Marshall Islands Journal Gas costs less in Ebeye By GIFF JOHNSON Ebeye and Jaluit are making history this week with gas prices lower than Majuro’s for the first time ever. By dropping its gas price at the pump 60 cents below Majuro’s lowest gas price, the ALRO fuel company is demonstrating Majuro is completely out-of-step with pricing in the rest of the world. Even the outer island of Jaluit is enjoying gas at $4.29 a gallon. The last time world market fuel prices were as low as they were this week, Majuro drivers were paying less than $3 a gallon for gas. Instead, prices in Majuro on Tuesday as the Journal went to press ranged from $4.89 (Riwut) to $5.09 (SEPS) — 60-to-80 cents higher than Ebeye’s and Jaluit’s new gas price. ALRO chief executive officer Alvin Jacklick approved the price cut for Ebeye and Jaluit gas on Tuesday this week, dropping the price from $5.84 to $4.29 per gallon. While the bottom has dropped out of the world market price for Brent Crude oil, prices in the Majuro have not followed suit. Last July, world market prices peaked at over $140 per barrel, and Majuro’s gas prices at the pump set a record at $6.89 per gallon. But the world market has dropped to under $37 a barrel this week. Gas prices at the pump in the US have dropped from an average of $4.11 a gallon in July to $1.62 — a 60 percent drop, compared to less than half that percentage for Majuro. When world market prices for a barrel of oil were $92 in November 2007 — more than double this week’s world market price — the price of gas at the pump in Majuro was still less, at $4.76 a gallon, than it is today. Mobil cut its price to Majuro gas stations on Christmas Day by 15 cents, bringing the Mobil price to Majuro gas stations to $3.57 per gallon — that wholesale price is nearly $2.50 above the current cost to Mobil at the refinery in Singapore, where gas for the RMI originates. This is Mobil’s second price drop in December, bringing the total reduction for December to 30 cents. Riwut’s new price of $4.89 is a 20-cent drop on the station’s previous pump price. Ace’s One Stop, which is now at $4.94, also cut 20 cents off the price. RRE dropped by 15 cents to $4.99. SEPS, which was till at $5.09 Tuesday is expected to mirror Riwut’s price later this week. Cabinet backs $1 million for nuclear payment The RMI Cabinet has approved in principle a plan to provide $1 million to resume partial payments to nuclear claimants after a three-year hiatus. The development is a result of President Litokwa Tomeing pushing the Cabinet to find an interim way to address the lack of US funding for nuclear compensation to Marshallese with personal injury awards from the Nuclear Claims Tribunal, according to officials in the Cabinet. This follows US Interior Department rejection of Tomeing’s proposal to use Compact funding as an interim measure to provide compensation until a new compensation agreement can be reached. But there are still significant hurdles before any payment can be issued by the Tribunal, including the fact the Tribunal now has no sitting judges to issue a “determination” (decision) — a requirement for an annual payment by the Tribunal. There is also some dissention in the Cabinet over the payment plan. Some members have raised concerns that paying nuclear test awards using RMI money could set a precedent that might undermine future attempts to obtain compensation from the US government. “This might make it very difficult to get in the door with the US,” one official commented. But one advisor to the President told the Journal the plan for a Marshall Islands-funded payment “doesn’t waive US responsibility for nuclear claims.” President Tomeing’s concern, he said, is that “the victims need relief. People are dying every year without receiving their full compensation. How long do nuclear test victims have to wait?” The President’s advisor said the government has identified a source of RMI funds, with a loan application pending with Bank of Marshall Islands for $1 million. This is about the amount that was last paid by the Tribunal in 2005, when it made a one percent annual payment for personal injury claims that amounted to about $980,000. Tribunal Chairman Gregory Danz’s contract with the Tribunal expired in late October and currently there is no judge sitting on the Tribunal. The Judicial Service Commission, which makes recommendations to Cabinet for appointment of judges, reportedly has a recommendation with Cabinet for it to reappoint Danz. Tribunal officials said from the point at which they are officially notified that funding is available and a determination is made, it will take at least three weeks to generate a payment.
From the 12/5/08 issue of the Marshall Islands Journal EZ’s latest fresh idea After receiving top marks from the RMI EPA, EZ Price Mart has begun selling “Ultra Purified Marshallese Rainwater” at its shop in Uliga. Dennis Yates, Director of the Diabetes Wellness Center, has endorsed and inspected the product. He was also the first customer to get his bottle filled with EZ Price’s Ultra Purified Marshallese Rainwater. The rainwater is collected in a 28,000 gallon tank then sent through a series of filters before being stored in a 500-gallon holding tank. Upon demand the water then goes through two “polishing” filters and an “ultraviolet” filter and is dispensed from the self-serve water dispenser located by the main entrance of the store. Neal Skinner, owner of EZ Price Mart, said he wants to give the people of Majuro a quality product at a reasonable price. The price per gallon will be fifty cents. But to launch his new water business, Skinner is offering a special, introductory price of twenty-five cents per gallon until December 14. In order to keep the cost down, customers must bring their own containers. The dispenser will provide water in one, three, and five-gallon quantities. “Make sure you bring clean containers so that the water does not get contaminated by dirt in your container,” said store manager Liz Rodick. US slows worker flow Business and government officials say they are having an increasingly hard time recruiting workers from the Philippines because of problems obtaining US transit visas through the US Embassy in Manila. Health Secretary Justina Langidrik told the Journal, “Ebeye has been having problems getting people already approved for recruitment because of the visa problem.” Anil Construction CEO Carlos Domnick said even when Philippines workers he recruits have all of their documents in order, the US Embassy is rebuffing them. “For Ebeye, even one doctor is a lot,” Langidrik said. “If there is no ophthalmologist, then there is no service because they have very limited staff.” Until recently, the Ministry of Health — which recruits medical doctors and nurses regularly from the Philippines — experienced few problems with the US Embassy in Manila, she said. “Now, there are long delays,” she said. “When that happens, sometimes people who’ve been recruited change their mind and we have to go through the recruitment process again.” For workers from the Philippines to get to Marshall Islands, they must travel through either Guam or Hawaii, both of which require that they have US transit visas. Guam, obviously, is the most convenient and cost-effective transit point for workers coming from the Philippines to the Marshall Islands. Depending on flight scheduling, transit time can be as little as three hours on Guam. But since September 11, 2001, all visitors require transit visas, even for brief stop offs such as the one at Guam. “I have been very frustrated with the US Embassy in Manila,” Domnick said. “They give our hired workers from the Philippines a hard time.” Domnick said US officials in Manila ask Filipinos recruited by Anil Construction why “they do not transit via Japan. Maybe they heard about the chartered flights from Japan and think that our workers should either not come to Majuro or hope to book a seat on the not-so-definite JAL chartered flights.” The result of delays or denial of a transit visa by the US Embassy in Manila “is very frustrating because our hired workers have worked very hard and spent a lot of money to get their police clearance, health certificate, HIV clearance, school transcripts, etc. and we do a lot of work and spend a lot of money from this end to advertise the position, get the entry permit, get the work visa, etc.” Domnick said frequently US Embassy officials “deny the worker his/her transit visa for stupid reasons like ‘take the Japan route.’ And worst is our workers just need the US transit visas to transit through Guam and they will stay at the Guam airport for only three hours, they do not leave the airport.” He said he’s asked for help from the US Embassy Majuro, but isn’t seeing much result. “How can our construction industry grow and be successful when we cannot bring in the skilled workers that we need?” he asked. “How can our businesses be more accountable when we cannot bring in the skilled accountants that we need?” The RMI Foreign Ministry is also talking to the US Embassy in Majuro about the situation in Manila, according to officials there. From the 11/28/08 issue of the Marshall Islands Journal Local embassy to contact Manila colleagues on issue In response to concerns expressed by government and business officials in Majuro, the US Embassy is preparing a briefing paper on the Marshall Islands for the US Embassy in Manila that officials hope will provide better understanding of employment needs in the Marshall Islands. But US Embassy Majuro Charge d’Affaires Doug Morris made it clear that the Majuro embassy has no authority to involve itself in decisions of the Manila embassy. “A vice consul has full legal discretion to make a decision (rejecting or granting visa applications),” Morris told the Journal. “An ambassador cannot go to a vice consul and tell him to issue a visa.” Anyone applying for a US visa is assumed to be an intending immigrant to the US unless they can prove otherwise and the way regulations are structured, the onus is on the applicant to prove they are qualified for a visa and are not planning to illegally migrate to the US. Morris said that he worked as a vice consul in the US Embassy in Manila, and he saw 250 people per day seeking visas to the US. Of this huge number, perhaps one or two per week were Filipinos attempting to come to Micronesia or the Marshall Islands, he noted. “We’ve been engaged with the Manila embassy for the past year (on this issue),” Morris said, adding the Majuro embassy has attempted to develop better understanding of the situation in RMI for visa-issuing staff at the Manila embassy. But Morris pointed out that there are also many human factors that come into play in the process. “We might hear that the visa applicant is the perfect guy for the job, but he may present himself poorly at the US Embassy in Manila,” he said. “We’re attempting to create for Manila a description of the circumstances here, including salary ranges for the government and private sector,” Morris said. The aim is to provide perspective on the RMI that may be missing from the evaluation of people who’ve been recruited to work in RMI. For example, Morris said that if a refrigeration engineer couldn’t get a transit visa so couldn’t go to work on Ebeye and if there’s no one else with the skill to handle refrigeration there — which could easily be the case — it could end up causing a major health/humanitarian situation triggering the need for a more costly US response, he said. Generally, he added, medical doctors have an easier time getting visa applications. But nurses “are trickier,” largely because there is such a huge demand for nurses around the world, including the US. Would a nurse making $12,000 in the Philippines want to go to the US where she could make $70,000? he asked. This is the type of decision facing US embassy officials worldwide, he added. But the bottom line is that it is the Manila embassy’s decision. “They make the call, and we can’t do more than what we are doing,” Morris said. As to why this is more of a problem now than in the recent past, Morris observed, “the reality is it is a human system and it is human beings making decisions about other human beings.” Vice consuls are appointed on two-year rotations and are likely not to have much knowledge of US-affiliated islands since very few of the visa applicants they see want to head to the islands. Cable chances looking brighter Developments on the proposed fiber optic cable are “considerably more optimistic than reported recently in the media and in public discussion,” said US Embassy Chargè d’affaires Doug Morris in a statement provided to the Marshall Islands Chamber of Commerce earlier this week. The cable project, which is expected to involve both the Marshall Islands National Telecommunications Authority and the Federated States of Micronesia Telecommunications Corporation, was discussed during last week’s Micronesian Chief Executives meeting in Pohnpei, Morris noted, adding that the negotiators are more optimistic than has recently been presented. “Perhaps of most significance is that the 10 years versus 25 years issue has been satisfactorily resolved,” he said. The recent sudden reduction in the time period of the proposed agreement was seen as a major obstacle to moving forward for NTA. Morris said the Pohnpei meeting was told that the US Rural Utility Service has approved in principle an RMI loan request for the cable, pending their review of the final contract. “This is a major step forward as the RUS loan is regarded as essential to RMI’s participation,” Morris said. “I understand that the negotiating parties are now focused on the one major issue yet to be resolved, namely the required $3 million escrow account for (cable) maintenance in the unlikely event of a cable failure due to the RMI and FSM branching units. This escrow account can be jointly funded by FSMTC and NTA. “The US government is open to receiving a proposal from the government of the RMI to direct Compact infrastructure funds toward RMI’s share if the government of the RMI indicates that it does not have other funding available for this purpose.” Clarifying who is negotiating with who in this complex project involving multiple parties, Morris said: • According to US Army officials, Hannon Armstrong, owner of the cable and the main financier for the Army project, has been in the picture since day one. The company is not just arriving on the scene. TKC Communications and Hannon Armstrong did agree several weeks ago to shift the lead for negotiations to Hannon Armstrong, but they have both been involved from the start. • There have been discussions, but never negotiations, between the Army and FSMTC and MINTA. TKC and Hannon Armstrong are not managing the bidding for the Army. The Army contract signed on June 11 was negotiated by the Defense Information Systems Agency (DISA) and its contracting entity, the Defense Information Technology Contracting Organization (DITCO), on behalf of the Army. The DISA contract is with TKC and Hannon Armstrong, but the Army was not a direct party to those negotiations and is not a party to the current negotiations. Nor is DISA/DITCO a party to the present negotiations. These are parallel business negotiations, not an effort coordinated by the US government or the Department of Defense. “I hope that this updated information helps to dispel some of the rumors and misconceptions circulating around the Marshall Islands in recent days,” Morris said. SK fuel on its way to Majuro About 2.1 million gallons of diesel fuel were loaded on an SK Networks tanker this past weekend for shipment to Majuro. MEC General Manager Billy Roberts told the Journal that this fuel shipment is less expensive than the last one ordered in October, which will lead to further reductions in electric rates starting January 1. After the arrival of last month’s diesel shipment, MEC began selling diesel retail at $2.92 per gallon, about three dollars less per gallon than the retail price in local gas stations that rely on Mobil for diesel supply. The MEC shipment of diesel is expected to arrive from S. Korea the second week of December. But unlike many previous shipments over the past three years, MEC is not facing a countdown to running out of fuel at its Delap fuel farm, Roberts indicated. As of earlier this week, it global market prices for oil were hovering around $50 a barrel, down from about $150 per barrel in July. From the 11/21/08 issue of the Marshall Islands Journal Wanted: RMI hotel workers By GIFF JOHNSON Encouraged by a first group of Marshallese workers doing well, American labor recruiters are back in Majuro looking to recruit another 60-to-80 Marshallese for hotel jobs in the US. Practical Employee Solutions Director of Operations Veronica Strickland and a team of officials representing her company and Starwood Hotels is currently in town to interview and select a second “pilot group” of Marshallese workers who will be flown to jobs in the US from January. Marshall Islands workers remain “an unproven option” for US hotels so future jobs depend totally on how well the current Marshallese group works out, Strickland said. For US employers, the fact that Marshallese don’t need visas to get into the US is a big advantage to hiring people from the RMI. But the current program also requires hotels to make a big upfront payment for one-way airfares that cost at least $1,500, which is then deducted from the workers’ salaries. For the first group, it cost more than $75,000 in airfares. “That’s a huge investment on a pilot program,” Strickland said. “I hope it will develop,” she said, adding that there is a big need for foreign workers in the US. “It all depends on the success of the people who go. If just one or two don’t work out, it’ll be a problem.” Despite some initial teething problems with the first group, things have gone well, she said. The aim for this second group is to send some to the US in January, and the second batch in June. Strickland said they are hoping to meet with bank officials while on island to discuss opportunities for loans for airfares to support recruitment of workers locally. Practical Employee Solutions currently recruits 7,000 to 8,000 foreign workers annually for hotel jobs in the US and fast food restaurants in Canada, Strickland said. Although the group has focused on Majuro in its initial efforts of recruiting, Strickland said they aim to add Kwajalein to their recruiting in the future. Strickland, Danny Eaton of Practical Employee Solutions, and Nancy Campbell and John Boulanger, who are both human resource directors with Starwood Hotels, are here through Friday to recruit the new group of workers. Russell Langrine is the group’s local agent. The group is working at the RRE complex conducting interviews. Stevedore fixes problemChamber of Commerce Public Affairs Committee chairman Sam Smith reported good news back to local businesses that import container loads of goods. Last week, DAR CEO Carlos Domnick had complained about a new Stevedore policy imposed without consultation that prevented local businesses with their own trucks from hauling containers from the Stevedore yard at Delap Dock. Smith took the issue up with Stevedore General Manager Clyde Heine. “Clyde read my e-mail and then called me that he has cancelled this policy,” Smith reported to Domnick and other interested businesses by email. “All is back to normal again.” In related developments: • Heine announced that effective this week, Stevedore has eliminated its fuel surcharge that had been placed on all container delivery since the summer. • Stevedore has requested approval from the RMI Ports Authority to increase charges for some of its services. The request is pending with the PortsFrom the 10/31/08 issue of the Marshall Islands Journal Gas rip-off The Marshalls Energy Company this week dropped its diesel price to under $3 per gallon, but local gas stations report that they are still paying more than $5 per gallon for gas and diesel from Mobil Oil Micronesia. But a Mobil official disputed this, saying the wholesale price to local dealers is less than $5 while the gas stations are charging more than $6 per gallon. Worldwide fuel prices dropped to their lowest level in two years this week. As of Friday last week, the gas price at the refinery in Singapore — where fuel used in the Marshall Islands originates — was $1.49 a gallon, virtually identical to the refinery price in November 2006, when gas was selling in Majuro for $3.80 to $3.85 per gallon. As of Wednesday, fuel prices in Majuro ranged from $6.09 to $6.20 per gallon despite the continuing fall of world market prices. “How come MEC can sell diesel for $2.92 a gallon and we’re paying over $5 a gallon from Mobil?” said one station manager who asked not to be named. “Yes, Mobil has been dropping prices, but they’ve been smaller five-to-ten cent drops.” The price at the Singapore refinery has dropped from a July 14 peak of $3.42 per gallon for gas to $1.49 as of last Friday. From July 25 to Monday October 27, Mobil has dropped its price to local dealers by 87 cents. While a Mobil official contends that gas stations are marking up prices by more than $1 per gallon, gas station managers say they add just a small markup. “I know the stations are not making a lot of margin (profit),” RRE’s chief executive Ramsey Reimers said. “We follow Mobil up and down.” Local gas stations, though they have dropped their prices, have also not kept pace with Mobil’s 87 cent drop. In mid-July, gas prices at the pump here peaked at $6.85-$6.89 per gallon. On Wednesday they were $6.09 at Riwut, $6.12 at RRE and Ace’s One Stop, and $6.20 at SEPS. Reimers said one explanation for Mobil’s prices to Majuro stations being higher today than in 2006 is the generally higher cost of doing business. This may account for why Mobil isn’t reducing its wholesale price to dealers to the level two years ago, he indicated. But, Reimers reiterated, his station and the others “are making only a small margin to survive.” His comments were echoed by other station managers. A Marshalls Energy Company official told the Journal that this week MEC has dropped its selling price for diesel from over $5 per gallon to under $3 — a more than $2 dollar per gallon drop. In Kiribati, according to the government’s newspaper, the retail price for gas at the pump is about US$3.90 per gallon. The government enforces price control in Kiribati on certain food items and fuel products. In Pohnpei, gas prices have been reported to be consistently about $1 lower per gallon than in Majuro. $1.8 million for MALGov staff and council members Majuro Atoll Local Government’s rejected fiscal year 2009 budget shows $1.8 million is planned for salaries for the 192 workers, council members and mayor. The projected salary budget amount is 47 percent of the total proposed FY2009 budget of $3,870,045. MALGov budget documents prepared by Mayor Titus Langrine’s administration show that of the 192 employees of MALGov, nearly half — 90 — are in public safety. A total of 89 are police and one is a mechanic. Another 37 are in the parks and recreation department, which is in charge of both sports and garbage collection. Another 16 are in administration and 12 are in the finance department. MALGov indicates that it collected $3,446,521 in tax revenue from October 1, 2007 through September 17, 2008 (all but two weeks of the entire fiscal year 2008). Although it collected $3.4 million in FY2008, MALGov projects it will collect $400,000 more this fiscal year, and has projected its budget at $3,870,045. The budget figures prepared by MALGov also show that FY2008 spending outpaced its $3.4 million revenue, leaving MALGov with a more than $500,000 deficit for this past fiscal year. From the 10/24/08 issue of the Marshall Islands Journal The $17 million Kwajalein landowners have less than two months left to their crucial $20 million deadline for US rent money. But the National Telecommunications Authority and the Marshall Islands is facing a more pressing deadline — in less than a month, the initial payment is due to secure a contract for an underwater fiber optic cable to connect Majuro and Ebeye with the outside world. The cable, while costly, will provide the RMI with a huge communications upgrade. “Cabinet has already endorsed it,” Minister of T&C Dennis Momotaro told the Journal Wednesday. “We really want it to happen. I’m going to push for the government to guarantee the loan. We’ll finalize it either this week or next week.” NTA General Manager Tony Muller told the Journal, “roughly $2 million will be required upon signing (of the contract).” The NTA board and the RMI Cabinet have endorsed the cable project. The US Army is spending $100 million over a 10-year period to bring the cable from Guam to Kwajalein, and the Ebeye/Majuro leg will cost the RMI about $17.9 million. NTA has talked to the US Rural Utility Service about loan options, and reportedly RUS has indicated its willingness to refinance NTA’s existing loan, provided NTA has a guarantor. Muller said November 21 is the deadline for NTA to make the first payment confirming the deal. The Federated States of Micronesia’s telecom company has reportedly already signed up for its portion of the cable project with the firm handling the project for the US Army. MEC cuts 8 cents off KW hour Electricity rates will drop November 1 in Majuro, giving Majuro residents, businesses and the government some needed relief. Minister of Public Works and MEC board Chairman Kejjo Bien told the Journal that MEC will be reducing the price of electricity next month. MEC will reduce for all consumers by eight cents per kilowatt hour. This means that lifeline customers (who use under 500 KW hours per month) will pay 31 cents, down from the current 39 cents per KW hour; regular residential customers will pay 33 cents, down from 41 cents per KW hour; businesses will pay 39, down from 47 cents; and government will drop to 40 from 48 cents. The drop has been made in line with the drop in world market fuel prices that have plummeted from a high of around $150 a barrel earlier this year to around $80 a barrel as of last week. From the 10/17/08 issue of the Marshall Islands Journal RMI tax laws being revamped The Marshall Islands tax law was passed nearly 20 years ago and needs overhaul and change. That’s the mandate for the Tax Reform and Modernization Commission set up recently by the Cabinet, Ministry of Finance assistant secretary Bruce Bilimon told Friday’s meeting of the Chamber of Commerce. Bilimon said the goal is to improve both the tax system and compliance. He outlined the plan of action for the Commission, saying that it will be consulting with businesses, government officials and others over the next couple of months to help it formulate a new tax plan. The plan will be provided to the Minister of Finance Jack Ading next year. “We’re seeking a partnership with everyone,” he said. Bilimon asked people to submit their ideas and comments directly to him or the Commission’s chairman Carlos Domnick. Domnick told the group, “we’ve been complaining a lot about enforcement.” With five members from businesses on the Commission, it gives the private sector some clout in recommending improvements, he said. “It’s an opportunity to make the system right.” Tony against NTA into television In a presentation made during what was supposed to have been the last day of the current session of Nitijela, Foreign Minister Tony deBrum addressed the subject of the National Telecommunications Authority’s plans to begin providing a television broadcast service in Majuro. He explained that in his view, due to the fact that a private concern has been providing such a service for a considerable time, NTA should not enter the market to compete. He said NTA operates under conditions of exclusivity and would gain an unfair advantage over the current private sector endeavor. A cable operation, owned by Marshalls Broadcasting Company, provides TV service in Majuro now. From the 10/10/08 issue of the Marshall Islands Journal Bank must cut rates The RMI Banking Commissioner ordered all local banks to reduce consumer loan interest rates to a maximum of 15 percent — a move that will have the most impact on Bank of Marshall Islands, which currently uses a 17 percent maximum rate for most consumer (personal) loans. Banking Commissioner Ann Marie Muller issued the order September 30, more than six weeks after getting Cabinet approval of the measure, and ordered that the banks implement the change on Monday this week (October 6). BOMI President Patrick Chen said the reduction in interest will reduce bank earnings by $1.5 million a year. He said the bank is now gearing to reduce hours of operations and of staff, and possibly cut back on various other services, including community donations, to reduce its costs to the mitigate losses. Muller said the “new lower rate is to assist the Republic of the Marshall Islands’ citizens to cope with the higher cost of living as a result of increases in the price of fuel, foods and other commodities.” The directive to the banks to reduce their unsecured consumer loan interest rates to 15 percent follows an unsuccessful effort earlier this year by some Nitijela members to pass legislation reducing the current interest rates allowed by the “usury” law of 24 percent. Chen expressed surprise that there was no prior consultation with the bank, since the provisions of the RMI banking law — which give the commissioner the power to issue orders setting maximum interest rates — requires consultation with local banks. Chen indicated that in discussions with Muller after receiving the letter, she has given the banks additional time to implement the new directive. Bank officials said that they are gearing to implement the new interest rate, but as of Wednesday this week did not have a date for it to go into effect. BOMI dropped its maximum rate from 18 to 17 percent two months ago in response to the RMI government’s declaration of a state of economic emergency. “It’s not a problem to follow the instructions (from the Banking Commissioner),” Chen said. “We’ll find a way to deal with it.” MISC ready for fishing launch The Marshall Islands Service Corporation (MISC) is gearing to launch a Marshallese-owned and run fishing business. Bank of Marshall Islands President and MISC President and CEO Patrick Chen told the Journal that following endorsement of the fishing proposal by the Marshall Islands Marine Resources Authority, MISC is now aiming to raise $3 million in capital to launch fishing activities with two purse seiners. Chen said that MIMRA Director Glen Joseph attended a MISC board meeting last month, and said MIMRA is prepared to issue licenses for two purse seiners operating under MISC. “He gave us the green light,” Chen said. “We’ll try to raise $3 million working capital and locate a partner to join us (in the fishing business).” Chen said they are starting to look for used or new purse seiners, possibly from Taiwan. Chen said MISC is now offering 300,000 shares of common stock at $10 each in an effort to come up with the $3 million. “There will be a lot of benefits from (Marshallese-owned and run) fishing,” he said. “There will be jobs, tax revenue, training opportunities.” Chen said as a Marshall Islands corporation, “we’re in it for the long-term. We want to preserve and maintain the fishing resources and increase benefits for the Marshall Islands.” Looking back at the failure of a Marshall Islands government-supported fishing effort in the late 1980s — that included a purse seiner purchase and longliners operated by local businesses — Chen said he believes that “times have changed.” “Today the timing is good,” he said. The skill and experience levels in Marshall Islands are much better today than they were 20 years ago, he added. Chen said he does not think it will be hard to raise the working capital through sales of MISC shares. From the 10/3/08 issue of the Marshall Islands Journal US sees US health break down A US Department of Interior report issued Friday describes health services in the Marshall Islands and other US-affiliated islands as being near a “total breakdown.” The report says Majuro Hospital is not properly handling dangerous hospital wastes, medical records management remains problematic, training opportunities for staff are limited, and hemodialysis treatment is not provided despite diabetes being the number one cause of sickness in the country. The three-page report on Majuro Hospital that is included in the DOI report on all of the US-affiliated islands focuses heavily on the waste management problem, with photos (similar to ones that been printed in the Journal over the past two years) that show the problem of bags of waste piled high. “Open industrial-size trash cans overflowing with red biohazardous waste bags are scattered across the rear of the hospital,” the report said. “Used syringes and latex gloves mixed with soda cans and Styrofoam cups are piled in a soggy mess from the recent rain. No fence or wall prevents community access to the piles of biohazardous trash and medical waste.” The report also commented on the state of medical records at Majuro Hospital. “Two years ago, the (hospital) began implementing an electronic medical records system and began to transfer its inventory of records online,” the report said. “This process was halted when the hospital’s server reached capacity and staff also realized they had a database that contained over 100,000 medical records for a population of only 57,000.” Supporting the report’s contention that residents of many different islands are jumping on planes to get treatment in US hospitals, the report concludes on diabetes in RMI: “Despite the fact that the Ministry of Health’s Secretary classified diabetes as the number one cause of morbidity (sickness) in the Marshall Islands, the (hospital) no longer provides hemodialysis services. Hemodialysis is the most common method used to treat advanced and permanent kidney failure.” Hospital staff said “they eliminated this service years ago because it was not economically feasible to provide. They also stated that they had no idea how many citizens in Majuro needed this service because this population had either died or left the island for a place where this service is available.” JICA aid stymied By GIFF JOHNSON Confusion reigned in Nitijela debate Monday over aid being sought from Japan to support multi-million dollar projects in the RMI. Government and opposition leaders traded shots over planned projects that have been sidelined in favor of new priorities of the government. But no definitive priority list was offered by government officials during Monday’s debate. Acting President Christopher Loeak confirmed in his comments that outer islands ships are now a top priority for the RMI government. In April, President Litokwa Tomeing made a state visit to Japan and presented a list of three priority projects to Japan International Cooperation Agency (JICA) officials for consideration. The list was headed by a water reservoir project, which was to be switched from Majuro to Ebeye, making it a new project. Second on the list was funding for a new USP campus in Majuro and the third item was support for outer island runway improvements. According to Japan Charge Dr. Kazuyuki Ohdaira, following receipt of this list in April, the Japan government repeatedly requested more detailed information from the RMI government, including budget estimates, which is a required step in the JICA process, but no follow up information has been provided by RMI to date. Until this information is received, JICA cannot move forward on these projects, he indicated. But a new development has further delayed Japan funding of projects here. Chief Secretary Casten Nemra confirmed to the Journal this week that late last month, the Cabinet revised the project priority list to be proposed to Japan for funding consideration. He said that ships to improve outer island service is now number one, and renewable energy is the second priority. This is followed by the water reservoir project for Ebeye and the USP campus. Ohdaira told the Journal Wednesday he had been informed verbally of these changes by RMI officials but has not received the information in writing. “We’re waiting for written information on this,” he said. Nemra indicated that the new priority list would be submitted to the Japan Embassy in the near future. Historically, it has taken about two years of discussions, design work and negotiation between the two governments to launch a new project. Ohdaira explained that Japan only responds to requests from recipient governments. “It is not Japan who decides the projects,” he said. “The ball is always in the RMI government court.” From the 9/19/08 issue of the Marshall Islands Journal OTEC plan waiting for RMI decision By SUZANNE CHUTARO The Marshall Islands could become the first energy sufficient country in the Pacific within the next three years. A company prepared to build an Ocean Thermal Energy Conversion (OTEC) plant in Kwajalien and/or Majuro made its pitch to both Kwajalein and Majuro senators on Tuesday, proposing a 10 megawatt land-based OTEC plant at the cost of about $250 million. Robert Nicholson, III, of Sea Solar Power International, LLC and associate Hunter Johnston of Steptoe & Johnson LLP Attorneys at Law told government leaders that the OTEC technology is “ideal for the Marshall Islands” and that the “Marshall Islands participation will lead to the success of the project.” Foreign Minister Tony deBrum has promoted the OTEC plan as a way to power both Kwajalein and Ebeye. Nicholson said the proposed plant would be capable of this. According to Nicholson, OTEC, which is a low temperature reverse refrigeration system, is technology which will not only provide for Ebeye or Majuro’s electricity needs at a much lower cost than a diesel power plant but the proposed 10 megawatt plant will produce as a bi-product three million gallons of fresh drinking water per day. In Majuro, MWSC pumps out one million gallon of water into the city during water days, which is currently only two days a week. Meanwhile, Marshalls Energy Company is capable of producing 24 megawatts in Majuro, but its peak power use now is only 10 megawatts. Ebeye on the other hand only uses only a little over one megawatt. Nicholson adds that positive off-shoots of establishing an OTEC plant include the possibility of maricultural farming for meeting food security needs and the replacement of the islands auto fleet from gasoline powered to electric plug-in cars that are better for the environment. Nicholson said that the OTEC technology is ready and his “team” is ready to get started. He said his company has also just signed with Hawaiian Electric Co. to build a 100 megawatt OTEC plant to serve Oahu. He said now it is just a matter of getting an okay from the government, identifying a site for a land-based OTEC plant and securing agreements to allow Sea Solar Power International to provide the RMI with electricity and water. “We’re prepared to build, own and operate the plant,” said Nicholson. “We’ll put our money where our mouth is.” But he adds that ideally he’d like the RMI to own the OTEC plant so that the money made from the plant stays in the RMI. Although his company can fund the project itself, Nicholson believes the project will need support from the RMI government to assist coordination between his company and the US government. Normally OTEC plants are offshore — with facilities similar to that of a drilling rig. But the proposal for the RMI is forland-based plants — a first for this sort of technology and it will need about four acres of land. NTA dominates Chamber forum Marshall Islands Chamber of Commerce vice president Mike Slinger at the outset of last Friday’s monthly meeting made it clear that Chamber President Hirobo Obeketang and other members of the NTA board are not there representing the Chamber. He made the comments in relation to recent controversial NTA board approval of a plan to launch TV broadcasts in competition with MBC, a private business. “They are not representing the Chamber,” Slinger said. “However NTA board members voted is up to NTA shareholders to respond to.” Later in the meeting, NTA board member David Strauss was asked a number of questions about NTA services. Asked why NTA offers only one Internet plan, Strauss said some board members had suggested lowering the “outrageous prices” of the dedicated lines to encourage more customers but had been told by management that it would need to spend $100,000 on a study to assess the cost-benefit of the idea. “Some board members say that ‘trial and error’ should be considered,” he said. As to the reduced dial up Internet charge of $1.80 per hour that the board earlier this month voted to resume effective October 1, Strauss said the public won’t know if it will happen or be changed since in the past, board meetings have reversed decisions reached by earlier meetings when some members were off-island. In response to questions about NTA lowering its prices, Jerry Kramer said, “NTA is a private company. We don’t have the right to tell NTA what to charge.” Instead, Kramer said, “we should be supporting competition.” Ben Chutaro asked about the fiber optic cable plan, to which Strauss said NTA has submitted a loan application to the US Rural Utility Service that the RMI government is supporting. Strauss added that there is a board meeting this week at which the annual NTA budget is to be discussed, including the expected drop in revenue from the reduction in Internet dialup rates. EZ Price’s Liz Rodick said the company has been experiencing repeated problems with its land lines, which NTA repair crews explain is to do with deterioration of the underground cable. “If we still depend on these underground cables that are deteriorating, it won’t matter if we have (the new) fiber optic cable,” she said. Strauss said that at the NTA meeting earlier this month, Bank of Marshall Islands Chief Information Officer Jim McLean had delivered an excellent presentation about moving to a wireless system and dropping the old copper system (now in use for land line phones). Strauss indicated that McLean’s recommendations were “ignored” by NTA officials. “It’s a very real problem, especially in the downtown area,” McLean said of the poor quality of the underground phone cables. “For us to use broadband (that the proposed fiber optic cable will offer Majuro) we need a significantly more reliable” system, he said. McLean recommended to NTA that as soon as the contract is signed for the fiber optic cable to be installed to Majuro and Ebeye, “the focus should shift to the distribution system so it is ready when the new (fiber optic) system is turned on (in 2010).” A wireless system can handle broadband for an unlimited number of users, he said. “Once the cable deal is signed, don’t relax,” McLean said. “Deal with distribution.” NTA’s customer service manager Colin Allen, who attended the meeting, said he was there to listen to complaints and suggestions to take back to management to resolve. He said he wanted to work together with Chamber members. “On the Internet dial up package, we can work something out,” Allen said. From the 9/12/08 issue of the Marshall Islands Journal Digicel wants RMI Digicel Chairman Denis O’Brien flew in to Majuro Sunday on his jet with top company executives to meet with President Litokwa Tomeing and members of his Cabinet — demonstrating Digicel’s interest to get into the Marshalls’ market. O’Brien and the government leaders huddled at Long Island Restaurant for a 90-minute get-together before the Digicel group took off to continue its island-hopping. O’Brien, ranked “number two” this year in Pacific Magazine’s annual Pacific “Power 10” listing, was here to lend weight to Digicel Pacific’s pitch to get government approval to provide competition in the cell phone sector. With him was Digicel Pacific CEO Vanessa Slowey, chief legal counsel David Dillon, and several board members. Tomeing, who earlier expressed concern to the Journal over the poor quality of NTA-provided cell phone services, told the Digicel group that he was delighted with their visit and hoped that it would lead to improvements in telecommunications in the RMI. “We believe that broad use of cell phones is the first step to an information society,” O’Brien said. The Digicel founder said that the company has reduced cell phone costs by more than 40 percent in Samoa, the first Pacific market it entered. “We keep our promises,” he said. In addition to Tomeing, attending the gathering were Ministers Dennis Momotaro, Christopher Loeak, David Kramer, Jack Ading, Amenta Matthew, Nidel Lorak and Kejjo Bien. Iroij/Senator Mike Kabua and presidential advisor Fred Pedro also joined in. Who will be GM of MEC? Hiring of a new general manager to replace Marshalls Energy Company GM Billy Roberts is moving forward with the short-listing of candidates. Three MEC board members — Casten Nemra, Fred Pedro and Ben Graham — are rating the 31 people who responded to MEC advertisements earlier this year. The expectation is that the list will be reduced to about five of the top candidates, after which job interviews will be conducted before a decision is made. At MEC’s board meeting next Wednesday, the shortlist will be reviewed. Roberts has been GM of MEC since 1986, and worked for the company since the early 1980s. He tendered his resignation effective October 2006, but was kept on by the board in a temporary arrangement until the post could be advertised. Since 2006, he alternates several months on and off island. From the 9/5/08 issue of the Marshall Islands Journal It’s the NTS show By GIFF JOHNSON NTA’s board of directors this week, after evidencing a serious split in opinion, flexed its muscles, refusing Cabinet directives to halt starting wireless TV in competition with a Majuro private company and to eliminate a credit card with a $250,000 limit. Last week, Transportation and Communications Minister Dennis Momotaro issued a letter to NTA board chairperson Hilda Heine outlining seven issues that the Cabinet wanted action on, including eliminating the TV plan and credit card. But the NTA board split over the Cabinet orders — matters that Momotaro called the Cabinet’s “grave concern on a number of MINTA’s initiatives that are inconsistent with the policy of the government.” Foreign Minister Tony deBrum told the Journal Wednesday that he was “perplexed” by the board’s votes against Cabinet directives after “instructions had been given under the minister’s signature and the Cabinet had held discussions with members of the board.” He noted that the government owns a majority of the shares in NTA. NTA at its Tuesday board meeting did agree with one of the seven Cabinet directives, to reduce Internet rates to $1.80 per hour, which will be implemented starting October 1, according to Heine. Most other directives were rejected by a 4-3 vote, reportedly with Heine, Momotaro and David Strauss supporting the Cabinet positions and board members Alex Bing, Hirobo Obeketang, Lynn Milne and Jelton Anjain voting against. One other board member, Patrick Chen, was not at the meeting. Though the board did not agree to drop the single location “call center” for each outer island, it did agree to review the plan. Heine told the Journal that three of these “call centers” were budgeted for in the current fiscal year, so NTA is going to move forward with these in Enewetak, Mejatto and Santo (Third Island) on “a trial basis and then reevaluate the plan for the other islands.” She said NTA is faced with high costs to provide full cell phone services to every outer island and rather than provide nothing at all, has launched the call center option with plans for later “upscaling” the outer islands service. The Cabinet also raised concern over NTA’s $250,000 credit card, objecting for risk of abuse and questionable purchasing without proper review. The NTA board voted 4-3 to maintain the credit card. Cabinet also directed NTA to abandon plans for digital wireless TV service in Majuro, saying it needed to “improve its primary service sector first” and noting there is already one TV service in Majuro. The Cabinet recommended if NTA could not get reimbursed for its TV equipment investment, then the operation was to be redirected to Ebeye and Kwajalein markets. But the board vetoed the directive, maintaining its plan to launch wireless broadcast TV for Majuro and Arno. The NTA board agreed to establish smaller sub-committees to review key telecom issues, a move Heine believes will generate more active participation by the board as well as better informing the members. “We didn’t get everything we hoped for at the board meeting,” Heine said. “But we are making some progress.” NTA management has filed a loan request with the US Rural Utility Service for an approximately $15 million loan to support a new fiber optic cable to Ebeye and Majuro. NTA is awaiting the reply from RUS, but in the meantime, the deadline for engaging with the US Army’s installation of the fiber cable from Guam to Kwajalein has been extended from this month to November. This gives NTA and the RMI government breathing room on the loan application, she said. Stayman: “No way delay Kwajalien money cutoff” The Journal sent email inquiries to US Senate Energy and Natural Resources Committee staff member Allen Stayman concerning the Kwajalein rent escrow account that is expected to be about $20 million by December. The Journal learned the actual deadline for a new land use agreement (LUA) to prevent this large sum returning to the US Treasury is December 17, not December 18 as earlier reported. “Any funds in the escrow account revert to the US Treasury on midnight December 17 unless the RMI has concluded, and notified the US that there is, a new LUA,” Stayman, told the Journal last week. RMI Foreign Minister Tony deBrum told the Journal “the part (of the US law) of extreme interest is the language ‘unless otherwise mutually agreed,’” because it suggests an opportunity for the two governments to ensure the funds don’t disappear on December 17 even in the absence of a new LUA. The Journal further asked Stayman how a provision allowing two governments to come to an agreement regarding the funds would affect or delay the December 17 deadline. “I can’t foresee any way to waive the requirement,” Stayman said. “The exploding deadline concept may be what is first and foremost in the minds of many who want to use the language to coerce an LUA,” deBrum said. “But I think reasonable people can make reasonable decisions of mutual benefit when good faith efforts to reach a successful agreement are at work.” US Ambassador Clyde Bishop indicated that the provision in question relates to a possible reprogramming of the escrow funds upon mutual agreement of the two governments. “It (the law) allows, as an option, the reallocation of the escrow funds upon mutual agreement between the two governments, if the signing of an LUA is not possible by the deadline.” But, Bishop said, this section “does not imply or directly suggest that a waiver or delay in the deadline for the return of the escrow funds are an option. “This section is intended to suggest that, in lieu of a signed LUA, upon agreement of both governments the money in escrow can be used for other purposes. The US government, however, would be inclined to consider suggestions that would enhance the possibility of achieving a signed LUA that corresponds to the condition already spelled out in the (Compact’s) Military Use and Operating Rights Agreement.” DeBrum said “we are looking at all options. If we are engaged in bona fide discussions on a new LUA in whatever form, we should be able to mutually agree on disposition of the escrow either by way of postponement of the drop dead date, alternate use, or directed use for Kwajalein public services as the landowners might suggest. Or best yet, pay it while the LUA is being negotiated.” From the 8/29/08 issue of the Marshall Islands Journal Chen looks to micro loans to help RMI atolls Patrick Chen (pictured) is enthusiastic about new global micro loan and grant opportunities for helping remote communities get telephone equipment so they can be linked to the outside world. He attended an international micro loan convention in Bali earlier this month, meeting with many people involved in the small loan industry worldwide. Chen came away from the event particularly interested in a village mobile phone system that is being promoted by the Grameen Foundation, an internationally recognized leader in micro finance. Chen, who in addition to being President of Bank of Marshall Islands sits on the National Telecommunications Authority board of directors, said that this relatively inexpensive communications equipment must be provided to people on the outer islands who currently have no phone communication. The Grameen Foundation is promoting a “village phone grant competition” that offers up to $10,000 in support of a village phone program, with details available at www.villagephonedirect.org. Communications technology is changing rapidly, and the RMI must get in step with what is happening for other parts of the world, where many isolated communities are gaining access to modern communications equipment, which is being funded through micro financing, Chen said. Editorial: Opening performance The Commission of Inquiry report on the 2007 national election has given us a snapshot of the hiring process by the government’s Public Service Commission. The hiring process is supposed to be independent of government influence or interference, based on merit and ability. Instead, we learned, it was exactly the opposite in the case of the appointment of the Chief Electoral Officer. The problem, however, is that this appears to be the norm, not the exception to the rule when it comes to PSC hiring. Ministers routinely get their relatives appointed to key positions in government, even though they may lack qualifications for the jobs. Dating back many years and continuing to today, government jobs have been widely seen as a way to share the wealth of foreign aid, the benefits being passed onto various family members or political cronies of those who control the strings of government. Historically, not much was required of people being hired into these government positions — particularly in the Trust Territory days, when headquarters was 1,500 miles away in Saipan. In the past three years, there’s been much more talk (and some action) on the need for better government worker “performance” — a word that has only lately come into our vocabulary. But our machinery (PSC) for hiring, firing and disciplining workers in government still reflects the old, backroom back-scratching style of operation. The 2007 election showed us the folly of that policy. But every day, in a hundred small ways, local people are confronted with equally incompetent or unmotivated “public servants” in a score of government offices who were hired through this same process — protected by higher ups, they have little expectation or incentive to perform. As anyone who builds a house knows, if the foundation isn’t right, the rest of the building won’t be stable. That’s our situation with PSC and the national government. The question is, do we want to get it right? The answer is a simple question: can we afford not to? From the 8/22/08 issue of the Marshall Islands Journal NTA’s disconnect Our monopoly telecommunications supplier NTA has offered three good reasons for allowing competition in this sector in recent weeks and months: It has returned Internet rates to $3.60 per hour, one of the highest in the Pacific region, after reducing the rates to $1.80 from last November through July; it is taking a hands-off attitude to a communications system for Likiep and other atolls that is being provided free to the RMI by the International Telecommunications Union; and it is aiming to compete with the private sector in TV transmission. NTA lowered the Internet rates last year in an effort to boost Internet use. According to NTA, it didn’t see an increase in usage, so it returned to the old, higher rates. Consider this: NTA’s action in increasing its rates back to $3.60 per hour was done as the Cabinet declared a state of economic emergency for the country. As part of that emergency declaration (which has just been extended), the RMI government is now moving to cut import taxes on food to help RMI citizens whose pocketbooks have been assaulted by high fuel and power prices. To say the government-controlled NTA is out-of-step with its parent is to be guilty of a gross understatement. And how should Likiep people feel about NTA’s attitude of “we’re not for it, we’re not against it” — meaning, no help from here. Likiep and several other islands, which don’t have the money in their communities to make extending telecom services financially viable on the scale of, say, Kili or Jaluit, are in line to get free telecommunications equipment from the International Telecommunications Union, which is working with the Ministry of Transportation and Communications to link up to the world’s remote and unconnected communities. Moreover, the equipment for Likiep is here on island. The Ministry of T&C wants NTA to assist with satellite links, so calls to/from Likiep will be domestic, and thus less expensive. Nope, NTA isn’t interested because it has its own plan to put one phone, one computer and one fax machine on Likiep sometime between now and 2013. It may be difficult for Likiep islanders — who could be “chatting” via Internet or phone with relatives in Springdale or Federal Way — to understand why they can’t get a hand from NTA. There are so many technological developments our outer islands are missing out on, and for Majuro and Ebeye Internet customers to be paying $3.60 an hour — high even by Pacific standards — in this day and age is ridiculous. Finally, that NTA can compete with the private sector — for example, with Marshalls Broadcasting Co. — but the private sector can’t compete with NTA is simply an anachronism that shouldn’t continue if we want to progress. It’s time to legalize competition in telecommunications. Campbell: Guam buildup a benefit The military buildup on Guam is likely to result in greater use of Reagan Test Site (RTS) facilities at Kwajalein, according to a top Army general. “Once the Marines have moved from Okinawa to Guam, I would anticipate that RTS would be an excellent location for them to train with their air defense capabilities,” said Lt. General Kevin Campbell, head of the Army’s Space and Missile Defense Command that operates RTS. The US Air Force “Expeditionary Bomb Squadron” based on Guam has already used Kwajalein at least twice this year for B-2 and B-52 practice bombing operations. “When the distance from the mission partner to Kwajalein is shorter than to some other major ranges, there is good economic sense for using Kwajalein for training,” Campbell said. The Air Force exercises and potential Marine training interest are just two in a range of non-missile testing operations that Kwajalein supports. Campbell described two of these: • “Due to its location near the equator, RTS has an important competitive advantage over the other US Pacific Ranges when it comes to space launch missions,” Campbell said. “This is one part of our mission set that is expanding and, based on inquiries we are receiving about RTS capabilities to support space launches, we expect more space launch companies to begin using RTS in the near future.” In addition to potential new business, Kwajalein supports NASA and Space Shuttle operations. • Kwajalein is involved in supporting the US global war on terror. “Evolving to meet new threats and exploit key opportunities is a continual process,” Campbell said. “While I can’t go into specific detail, RTS is currently providing significant direct support to our combatant commanders involved in current operations in Iraq and Afghanistan and this is a mission area that we are constantly trying to expand. Providing key support to our war fighters is very high in the Space and Missile Defense Command list of mission priorities.” From the 8/15/08 issue of the Marshall Islands Journal The path ahead will be painful By SUZANNE CHUTARO There was no sugar coating of the global economic situation hurting the Marshall Islands at Monday’s Nitijela opening when President Litokwa Tomeing told the nation that the “path ahead will be painful.” In his address to Nitijela, Tomeing delivered sobering remarks that flatly reminded everyone that the Marshall Islands is not out of the woods yet. “Our government is burdened,” said the President, adding that while the government is thankful to its citizens for doing their part during the State of Economic Emergency, “people still need to be conservative and work harder.” Tomeing produced a thumbnail of challenges ranging from the high cost of fuel, energy and food to job losses at the US missile range at Kwajalein, which have impacted the government since his administration took office in January. “There was nothing we could do other than to declare a State of Economic Emergency,” said Tomeing. “We needed to declare it to get some breathing room and find both short and long term solutions.” Job losses at Kwajalein will continue to hurt government tax revenues, he said. “$1 million in tax revenues will be lost to our government as a result of the job cuts at Kwajalien,” said Tomeing. “There is no question that the changes at Kwajalein will impact us further.” Highlighting how the Marshall Islands is not separated from the rest of world, Tomeing talked about how external factors have not only impacted his administration but have also greatly impacted average citizens —”we were quick to experience hardship from these sharp price rises,” he said. Tomeing told the Nitijela bluntly: “we are faced with challenges.” While the immediate problems impacting the Marshall Islands are caused by external factors, Toeming said it his strong belief that the solution to solving the nations problems lie within the Marshall Islands and its own people to change their attitudes. “This will be a painful path, payroll is too high and too many of us rely on outside help,” he said. “But, I believe the answer to our problems lie within us — God only helps those who help themselves.” Tomeing warned: “we need to prepare the RMI for 2023 — the Compact (with the US) will end so we need to be prepared.” Possibly reacting to speculation that the opposition party may be gearing for a motion of no confidence, President Tomeing repeatedly urged not only the senators but the entire Marshall Islands to work together. “We need to work together to overcome our challenges,” said Tomeing. “We still need to reduce government’s payroll, cut travel, improve the standards of education, improve the situation in Ebeye, and revive the Nuclear Claims Tribunal.” Tomeing reiterated his administration’s goal of “armij mokta” (people first) for improving government efficiency and service to the people warning that the RMI has a long way to go and repeated the “path ahead will be painful.” “People need to benefit from government services,” he said. “Our efforts and unity is for the good of the people.” RMI students face language crisis By GIFF JOHNSON Seven out of 10 public school fourth graders cannot read, speak or understand English and Marshallese adequately, the scores on the latest RMI tests show — and the problem is getting worse. A total of 73 percent of all public schools either got worse or did not improve between 2005 and 2007, according to the results of the Pacific Islands Language Literacy (PILL) test results released by the Ministry of Education earlier this month. But in math there are evident improvements: 63 percent of public schools did better in math during the same period. The PILL test is given to fourth graders in both public and private schools throughout the RMI. It tests English, Marshallese and math proficiency. Of the 17 biggest public elementary schools tested — ranging from Lae Elementary (113 students) to Ebeye Public Elementary School (1,064 students) — 11 of them did worse in English and 13 of them did worse in Marshallese in 2007 than in 2005. The results show the percentage of students “at risk” — which means the students who are not meeting the standards/requirements for each of the subjects. Ebeye Public went from having 84 percent of its students at risk in 2005 to having 91 percent of its fourth graders at risk last year — meaning nine out of 10 fourth graders are not doing well in English. The result in Marshallese language for Ebeye Public fourth graders shows the same poor result. The main bright spot in English among the 17 bigger public schools is Delap Elementary School in Majuro, where fourth graders improved from 34 percent at risk in 2005 to just 19 percent at risk last year — meaning that eight out of 10 fourth graders at DES are doing well in English. DES students didn’t do quite as well in Marshallese, but still outpaced all other large schools with an improvement from 36 percent at risk in 2005 to 28 percent in 2007 — meaning seven of ten fourth graders at DES are doing well in Marshallese. Six of the 17 biggest public schools improved from 2005 to 2007 (DES, Lae, Rairok, Rita, Uliga, and Ujae) — but some of these improvements were marginal. Lae, for example, went from all its fourth graders being at risk in 2005 to 90 percent at risk in 2007. A little better, but nothing to write home about when nine out of 10 students are doing poorly. Similarly, Ujae “improved” marginally from 79 percent to 75 percent at risk. Only three of the big schools managed to have fewer than half of their students at risk — 14 of the big schools had a majority of their fourth graders at risk in English, while 12 of the schools had a majority of their fourth graders at risk in Marshallese language. Of the medium-sized schools — those with enrolment from 50-100 students — seven got worse, nine repeated their poor results from 2005, and nine (36 percent) improved. More than half of these medium-sized schools — 13 of 25 — had all of their fourth graders at risk in English, and nine of them had 100 percent of their fourth graders at risk in Marshallese. The bright spots for 2007 in English among these medium-sized schools included Wodmej, Wotje, which had no fourth graders at risk (all five met English standards), Ejit Elementary had only 13 percent at risk (meaning nearly nine of 10 students did well) although the percentage worsened slightly from the low eight percent at risk in 2005, and Kilange, Arno went from 67 percent at risk in 2005 to just 22 percent in 2007 (meaning nearly eight out of 10 fourth graders are doing well). The only other school to have fewer than half its students at risk is Aur, Aur, which improved from 67 percent at risk in 2005 to 40 percent last year (meaning six of 10 fourth graders are doing well). In Marshallese language, Ejit out-performed all other medium-sized schools, with all eight of its fourth graders performing well. Aur also had all of its five fourth graders doing well, a continuation of its 100 percent success rate since 2005. A total of 17 (almost 70 percent) of the 25 medium-sized schools had more than 50 percent of their students at risk in Marshallese. Of the 25 small schools tested — enrolment below 50 students — virtually all of them (23) had 100 percent of their fourth graders at risk in English. In Marshallese, way over half — 17 — had 100 percent of their students at risk. Of the 25 small schools tested, nine got worse in English, 13 repeated their poor results from 2005, two improved, and one maintained its same good record over the period. Only two bright spots were evident in English: Jebal, Likiep’s two fourth graders in 2005 and one fourth grader in 2007 all did well, and on Wotho, the single fourth grader also did well in English in 2007. From the 8/8/08 issue of the Marshall Islands Journal NTA to hook up all atolls By 2013, 96 percent of the Marshall Islands’ estimated population of 60,000 will have access to telecommunication services. Presenting at the mayors’ annual conference at the International Conference Center on Monday, National Telecommunication Authority General Manger Tony Muller (pictured) laid out NTA’s bold six-year plan to have all outer islands connected with one phone, one fax and one internet computer on each atoll. According to Muller, an outer island tele-center “will replace the current HF radio system.” Connected via satellite, the solar-powered tele-centers will provide each of the remaining 17 outer islands with one telephone, one fax and one computer for internet/email access. Choosing the Marshallese word “Anidreb” (a Marshallese version of hackey sac) as an analogy to describe how NTA will be able to bring 21st century communication ability to the outer islands, Muller and NTA officials say each outer islands tele-center will connect directly to Majuro, which will be the gateway to other atolls or overseas destinations. According to Muller, based on the 1999 census which pegs the population at 57,000, only 75 percent of the RMI’s population has access to telecommunication services because a majority of the RMI’s population live on Majuro and Ebeye. Telecommunication services are currently only available on seven of the republic’s 24 municipalities namely Majuro, Ebeye, Wotje, Jaluit, Enewetak, Rongelap and Kili. T&C request for help rejected The sustainability and reliability of the proposed Secretariat of the Pacific Community (SPC) funded KU-Band communication pilot project slated for Likiep Atoll through the Ministry of Transportation and Communication is reason for concern, according National Telecommunication Authority’s General Manager Tony Muller. When asked by Likiep Mayor James Capelle for NTA’s opinion on the proposed pilot project, Muller said “our concern is sustainability.” “It’s a two-year study and if it doesn’t work they’ll drop it,” he said. “This is not acceptable to NTA. We have shareholders who need a return on their investment.” Muller confirmed that NTA was asked by T&C to assist in the pilot but it declined. “T&C has been working on this pilot project for the past seven years,” said Muller. “NTA has gone past the pilot stage. We’ve moved on and we are already (providing communication services) to outer islands. We don’t want to wait for a pilot because we already have a plan.” According to Muller the proposed pilot system is inferior compared to what NTA is proposing with its outer islands tele-center network. Explaining the difference between the SPC pilot and NTA’s system Muller says communications through the KU-Band system on Likiep will have to be transmitted to Hawaii then re-routed back to RMI. “It will take three satellite hops and this will delay service,” said Muller. “Quality will be further compromised by the weather — if it’s a cloudy day or you have stormy weather it won’t work.” NTA assured Likiep’s mayor that although it’s not going to partner with T&C and SPC in their pilot project: “NTA will not disrupt the project.” From the 8/1/08 issue of the Marshall Islands Journal Digicel ready to spend $17 million Digicel Pacific is stepping up efforts to gain entrance to the Marshall Islands telecommunications market. David Dillon, Digicel Pacific’s general counsel, spent several days in Majuro last week meeting with top government and private sector officials. Dillon, who is based in Fiji, met with President Litokwa Tomeing and other Cabinet officials, as well as local business people to advance Digicel’s pitch to launch mobile telephone service in the Marshall Islands. Dillon told the Journal that he was encouraged by the meetings with government officials. Nitijela law establishes the National Telecommunications Authority as the monopoly provider of all telecommunications services. For Digicel to enter the RMI market, either the Nitijela must amend the law to allow competition or Digicel needs to buy NTA. Digicel last month applied for a license to provide cell phone services, saying it is prepared to invest $17 million to provide phone coverage to 80 percent of the Marshall Islands. Sand joins private sector Long-time Majuro Hospital official Sandy Alfred is set to go private. In anticipation of opening up his own pharmacy business in Majuro, Alfred has already erected a stylish new sign in Uliga announcing the establishment of MediSource Pacific. Alfred told the Journal this week that he has given his 90-day resignation notice to the Ministry of Health and will leave its employ at the end of September. Alfred was trained in the U.S. as a pharmacist, and on his return to the RMI in the early 1990s, took over as Majuro Hospital’s pharmacy manager. Later he was promoted to hospital administrator, a post he held for nearly 10 years until he resigned to return to the pharmacy last year. From the 7/4/08 issue of the Marshall Islands Journal No quick solution to RMI’s fuel crisis By SUZANNE CHUTARO Discussions at Friday’s business and government forum emphasized the point that there is no easy short-term solution to the country’s fuel woes. While government officials and private businesses floated a number of mid- and long-term possible solutions for tackling Majuro and Ebeye’s energy crisis and food security issues, what was missing is a plan to address MEC’s urgent need for $8.5 million to pay for fuel by a July 10 deadline. The questions arising out of the forum were best summed up by Pacific International Inc’s. CEO Jerry Kramer who asked: “What’s our strategic plan?” Foreign Minister Tony deBrum took the lead for the government saying that President Litokwa Tomeing was scheduled to declare a state of emergency over the weekend — the Cabinet approved a state of emergency last Thursday, but the President’s announcement had not materialized as of Wednesday evening this week. At the forum, deBrum said once a state of emergency over MEC’s fuel situation is declared “a lot of things will be triggered” and the RMI along with other donor countries who choose to respond have a 30-day window to come up with solutions. In the event nothing is solved, the government would extend it for another 30 days. In the meantime, deBrum said President Tomeing has instructed the government to “send out feelers to Taiwan and Japan” for immediate help with the nation’s current energy crisis. He also said that Australia is sending an alternative energy consultant to work with the government. “RMI has requested solar power companies in the US and USDA for solar energy packages to bring to RMI,” added deBrum. But plans for alternative solar, wind or ocean thermal energy conversion (OTEC) are solutions that won’t meet the current energy crisis. “We need an interim solution for power,” admitted deBrum. “We can’t afford to have power shut down. We don’t even have a plan for sewage (treatment in the urban centers if power is disrupted).” deBrum acknowledged that sewage is an immediate worry that needs to be considered. He alluded to possibilities of loans or an advance from the government of Taiwan but nothing was definite. What the Cabinet members attending the meeting were able to confirm is that their immediate areas of focus for power needs are now Majuro, Ebeye, Jaluit, Wotje, Kili and Rongelap. Without electricity everything will come to a standstill The government is facing its biggest challenge to raise enough money to buy shipments of fuel to keep power running in the two urban centers in the face of skyrocketing world prices, Finance Minister Jack Ading told an Asian Development Bank/RMI government review meeting Monday. But, said Ading, “without electricity everything will come to a standstill.” This was an essential point to stay focused on as the ADB and the RMI work to align policies that address the problem. “The adverse effects of this global fuel crisis, its intensity and severity, are even more acute and destabilizing on small island states like the Marshall Islands with practically no means to protect itself from external pressures and shocks,” Ading said Monday. “The high costs of fuel and food around the world have already begun to severely hurt our government as well as the people of the Marshall Islands.” The most “frightening concern” is how the rising prices for food and fuel are hurting “people at the grassroots level, those with less financial means, the most disadvantaged and most vulnerable among us.” The RMI government is struggling to fund fuel shipments, he said. “Our ability to find enough cash to continue to pay incoming shipments of fuel has been shown to be severely limited as the price of fuel continues to go up,” he said, adding there is one simple truth about the current situation: “without electricity everything will come to a standstill (causing) a national disaster of unimaginable proportions and magnitude.” Ading expressed grave concern about schools and hospitals not being able to function, and the possibility of outbreaks of disease if water and sewer systems stop working for lack of power. Businesses on Majuro and Ebeye will suffer large losses on perishable foods if electricity is cut off, which would have the unfortunate result of increasing the price of food, worsening the already high prices that have been caused by world market problems. If power in Majuro and Ebeye is rationed, it will “increase hardship and poverty in our community.” But, Ading said, there is a “window of opportunity for our government to take bold measures in preventing the impending crisis from happening.” Reducing dependence on diesel fuel is one way to help, he said. He also blamed earlier governments for the RMI’s inability to address the current problems. “Our country would have been able to insulate itself against this energy shock but because of our lack of action over the years, although we have been informed many times in the past by the ADB, International Monetary Fund, Government Accountability Office and others that we need to implement structural reforms, and cut our government expenditures to maintain a sustainable fiscal situation, we did not take those recommendations seriously,” he said. This has resulted “in the situation that is facing us now. We simply cannot respond adequately to these global shocks. “If we had taken that advice seriously two to four years ago and followed them by implementing necessary reforms, by now the RMI would have been able to withstand these external shocks that are coming from the ongoing global fuel and food crisis.” The meeting this week between ADB and RMI officials “is an excellent opportunity for (us) to see how we can align the Bank’s current program in this country, and how we can align its future assistance,” he said. The meeting is timely and it fits with ADB’s commitment to make itself become a “client-oriented development bank, so as to respond to diverse needs in a proper and efficient manner.” Kiyoshi Nakamitsu, an education specialist and the RMI desk officer at the ADB, is in Majuro for the meetings this week. From the 6/27/08 issue of the Marshall Islands Journal Digicel ready to pay $17 million By GIFF JOHNSON Digicel Pacific, the region’s fast growing mobile phone network, says it is ready to invest $17 million in the Marshall Islands if the government will open the telecommunications sector to competition. For Digicel to operate here, the RMI government must amend laws that establish the National Telecommunications Authority as a monopoly in the telecommunications field. Digicel Pacific applied Friday for a license to operate mobile phone service in the Marshall Islands, its first north Pacific initiative after establishing business operations in Samoa, Papua New Guinea and Tonga since 2006. Digicel Pacific director of business development David Borrill said the company will launch service in Vanuatu this week and expects its new mobile network to be ready for service in Fiji by October, bringing to five the number of South Pacific countries where Digicel is active. “We’ve proposed a direct investment of $17 million for the Marshall Islands,” Borrill told the Marshall Islands Chamber of Commerce Friday after briefing the Cabinet. “We want to establish a mobile phone network that will provide 80 percent coverage of the population from launch.” If it happens, it would expand coverage for remote outer islanders than is presently offered by the National Telecommunications Authority. Borrill indicated that “eight to 10 islands” would be covered for mobile phone and related services if the Marshall Islands gives the company the nod to conduct business in the country. He said that the company’s policy is to provide cell phone coverage to 80 percent of the population on start up and then increase coverage to more customers over time. “We don’t penalize customers for living away from the center,” he said. Currently, only four islands outside of Majuro and Ebeye have mobile phone and Internet access. Borrill is based in Nadi, Fiji. He said he believes the government is supportive of opening telecommunications to competition. Borrill’s visit to Majuro follows a visit to Digicel Samoa headquarters earlier this year by Marshall Islands Transportation and Communications Minister Dennis Momotaro, who is also a member of the National Telecommunications Authority board of directors, and Minister in Assistance to the President Christopher Loeak. Digicel paid for their visit. Digicel now has more than 500,000 mobile phone users in Samoa, Papua New Guinea and Tonga, Borrill said, adding that this number will increase substantially as Vanuatu and then Fiji come on line this year. Before launching operations in Samoa two years ago, Digicel established itself in the Caribbean and Central America in the early 2000s and now provides mobile phone services in 26 countries in that region. “The Pacific looks like the Caribbean did six years ago,” Borrill said. “There are a lot of monopoly (telecommunications) companies.” “Competition is good for monopolies,” Borrill said. “None (in the Pacific) have failed because of competition and all have grown. It’s an opportunity to change the way they do business. And people are looking for other options.” Borrill also confirmed that Digicel Pacific has held talks with officials in both the Federated States of Micronesia and Palau, but has yet to file for a license to operate in these two other United States-affiliated islands in the north Pacific. A critical issue for the Marshall Islands, FSM and Palau is that their government-owned telecom companies are saddled with multi-million dollar debts to the US government that were obtained in the early 1990s to fund telecommunications infrastructure. The large loan debts are a driving force behind the three governments protecting their telecommunications companies against competition. NTA owes about $14 million to the US Rural Utilities Services. “The only way we’d get involved in the loans is if we purchase the National Telecommunications Authority,” Borrill said. “But we haven’t discussed that.” He also said Digicel Pacific prefers to establish its own facilities and compete with existing firms. Streetlight hurt our hip pocket Majuro’s streetlights are costing MEC more than $200,000 a year to operate — so in this energy crisis period, should they all be turned off? That’s a question that MEC has wrestled with, since Majuro Atoll Local Government hasn’t been actively looking to take on new expenses. “We’ve talked to Public Safety about the concern for crime increasing if the lights are turned off,” MEC General Manager Billy Roberts told the Chamber last week. As an alternative option, the MEC board has now approved hiring a grant writer to seek funding for solar-powered streetlights, he said. These will not just be for Majuro, but also for Ebeye, Wotje and Jaluit. Diesel usage ‘insane’ The proposed state of emergency over fuel problems “is the only way to wake everyone up to the fact that diesel is not a sustainable source of power in the long run,” MEC board member and Ambassador Ben Graham told the Chamber of Commerce Friday. Graham pointed out that MEC and KAJUR together will spend more than $30 million on diesel fuel to run Majuro and Ebeye power plants this year. “That’s 30 percent of the RMI’s gross domestic product,” he said. “It’s insane.” In the outer islands, many homes now have solar. “But we need to get really serious about other alternative energy options,” Graham said. The state of emergency recommendation from the RMI Disaster Committee is “calling policy attention to a situation we and most of the world are in,” he said. From the 6/20/08 issue of the Marshall Islands Journal 8.5 million crisis By GIFF JOHNSON The RMI Disaster Committee on Monday approved a recommendation to Cabinet that it declare a national state of emergency because of an impending crisis in the energy sector. The Cabinet was expected to meet on the recommendation Wednesday or Thursday. The state of emergency recommendation is based on Majuro and Ebeye’s utility companies being on the verge of financial collapse, and without a big injection of funding are expected to suffer an $18 million shortfall this year. A nine-page report issued late last week by the MEC board of directors to government presents a sobering view of the financial problems facing the Marshalls Energy Company and Kwajalein Atoll Joint Utilities Resources (KAJUR) as a result of the continuing rise in fuel prices globally. The report also says that MEC/KAJUR are facing a July 10 deadline for payment of $6.5 million for the fuel delivered earlier this month from SK Networks. Snapshots of the problem were provided by the board: • In 2004, MEC spent a total of $6.1 million on diesel fuel and lubricants. But spending on fuel is expected to top $32 million this year — a more than five-fold increase. • Fuel used to account for just half of MEC’s total expenses every year. In 2008, fuel accounted for 82 percent of MEC’s total spending, putting the “entire RMI energy sector in a very precarious and risky position.” • From 2004 to 2007, MEC expenses increased by 52 percent but revenues only went up by 11 percent, rendering the government utility “nearly insolvent” (almost bankrupt). • MEC has raised electric rates, but actual power use has gone down. • MEC generates about $1.1 million per month from electricity billings and fuel sales to fishing boats, but is spending $2.2 million each month on fuel, debt service to banks and operating expenses. Based on the price of fuel in April, “this translates into a shortfall (for 2008) of around $13.7 million.” • The Ebeye power company, KAJUR, operated at a loss of $325,280 in April, which would mean it will lose $3.9 million this year. The MEC paper recommended that government address energy needs through a combination of funding and off-setting measures, such as tax exemptions. Specifically, MEC is asking the RMI government for $8.5 million by July 10 in order to pay for the 1.5 million gallons of diesel fuel that arrived on June 6, and to provide a down-payment for the next fuel shipment needed by early August. MEC is proposing to increase the fuel order to two million gallons, an increase of half a million gallons over the June 6 order, “allowing MEC to sell the extra supply of fuel” to increase revenues. MEC is also asking for an exclusive tax holiday for gross revenue and import taxes, which it estimates will reduce MEC expenses by $1 million a year and allow MEC to become competitive for fuel sales and to supply less costly fuel for outer island shipping service. MEC is asking the Cabinet for action to defer its loan payments to the US Rural Utility Service, which amount to about $1 million annually, to provide MEC and KAJUR with protection as the sole suppliers of grid electricity within their areas of operation, and to protect and expand MEC’s fuel sales operations. In the longer-term, the RMI government must “vigorously pursue alternative and more sustainable energy sources” so the country can “reduce its dependence on imported fossil fuel energy.” MEC said bluntly that without a cash injection to meet the July 10 deadline, “power rationing will immediately come into effect to conserve fuel stocks for power generation.” The MEC board paper noted that it will be able only to supply power to Majuro with present fuel stocks and on a rationed basis until early August. A consequence of the problems MEC is facing is that “various fuel suppliers will advance the RMI fuel stocks in return for RMI assets (fuel storage tanks, etc.) at garage sale prices,” the MEC board said. “These actions will place undue hardship upon the RMI and its people.” MEC’s board said that the “ability within the combined utilities to resolve these issues has been exhausted. The situation in the coming months is clear. We need immediate assistance to ensure survivability of our communities…into the future.” A state of emergency is expected to allow government to tap emergency funding as well as make policy or legislative changes needed to reduce taxes and other costs to MEC and KAJUR to keep them afloat. President, Cabinet to get credit cards The Ministry of Finance is in the process of setting up credit card accounts for President Litokwa Tomeing and all members of the Cabinet. The Cabinet recently approved a measure to open a new credit card account with First Hawaiian Bank in the amount of $80,000 in order to provide a corporate credit card for the President and each of the 10 Cabinet members. The Cabinet has authorized a maximum card limit of $55,000 for the President and $2,500 limit for each Cabinet minister. “The policy for a government credit card for the use of the President as head of state and government was approved many years ago,” said a Cabinet paper prepared by Finance Minister Jack Ading in April that was approved recently. “The credit card makes it easier for the President to pay for official expenses especially when traveling and as stipulated in the card regulations including air ticket costs, hotel, meals, laundry and miscellaneous expenses as determined by the President.” Individual Cabinet members will have “sub-accounts” under the corporate card, and separate billings and accounts are to be set up by the Ministry of Finance. An existing credit card for the President with First Hawaiian Bank was established with a “reimbursable account” in which the Ministry of Finance deposited $55,000 and the bank deducted funds each month to pay for card charges. Cabinet approval for a new corporate account was needed for two reasons: • The Cabinet paper explains that it has not been possible to get original receipts and card charges of former President Kessai Note and “unless and until card charges and receipts are found and reconciled, the Ministry of Finance is unable to replenish the current account.” The Cabinet paper said that it “would be totally unjust for the current President to be denied the privileges due his office by and on account of action by others.” • The plan to expand the credit card account to provide for individual members of the Cabinet. The Ministry of Finance is now setting up internal procedures for use of the credit cards and talking with First Hawaiian Bank officials for issuance of the credit cards. From the 6/13/08 issue of the Marshall Islands Journal Price Crisis If “middle class” urban islanders in Majuro — that is, households earnings $10,000-$15,000 a year — are increasingly hard-pressed to put food on the table in Majuro, let alone use the luxury of air conditioners or refrigerators, where does this leave people who are making just $2 an hour — or are unemployed? Skyrocketing costs in Majuro and Ebeye, coupled with job layoffs by the Army and its contractors, are forcing everyone to make lifestyle changes that reduce comforts that once made the urban centers the envy of islanders living on outer islands without electricity, running water or vehicles. The increasing hardships in Majuro and Ebeye may add a surge to a major trend of the 2000s — heavy out-migration to the United States. Electricity rates for homes have risen 78 percent since November last year, rising from 23 cents a kilowatt hour to 41 cents as of June 1. Businesses, which pass their costs on to customers, are now paying 47 cents per kilowatt hour, a 62 percent jump since last November. The government statistics office reported in late May that inflation made its first-ever double digit jump in the first quarter of 2008, as prices increased over 10 percent — more than double the 4.4 percent inflation for all of 2007 — and there has been no relief this quarter. Word of wisdom for JHS graduates Last Saturday about 80 students graduated from Jaluit High School. Senior class valedictorian Mimi-Darlin Alex used the opportunity in her remarks to remind not only her classmates but the hundreds of guest and parents that today’s Marshall Islands is facing many challenges. Challenges, which she says are not insurmountable so long as individuals pursue their education. “Remember the cost of living in the Marshall Islands has risen four-fold since we all started high school,” said Alex to her fellow JHS graduates. “We must also understand that our country’s population continues to grow and it’s not going to reduce anytime soon. Let us also remember that salaries in our country are very low and they won’t be enough to provide for our families needs. “What is the solution to these problems?” she asks. “There is no question that the correct answer is: seek higher education. “Remember without an education, you will not get a job, without a job you will have no money, without money you can not pay for the things you need.” From the 5/30/08 issue of the Marshall Islands Journal Jaluit goes back in time Jaluit, which just a year ago, seemed to be heading boldly into the 21st century has now reverted back to the 1980s — though one businessman described it as more like the 19th century. With power rationing imposed by the Marshalls Energy Company beginning two weeks ago, businesses have suffered losses in frozen goods, bank services have been curtailed, and cell phone and Internet services have been disconnected. MEC is rationing power to just 10 hours daily: from 6-10 am and in the evening from 4-10 pm. MEC has operated Jaluit’s power plant since the mid-1990s, providing 24-hour power to the community at Jabor Island. But MEC said it can’t afford to buy fuel from ALRO, the fuel company managing the former Mobil tank farm on Jabor, forcing MEC to ration power until it can arrange for alternative sources of fuel. NTA pulled the plug on its telecommunications services because of the threat of damage to its equipment as a result of power turning on and off. Jaluit is now like most outer islands in that it can only communicate to Majuro via high frequency radios, and is no longer able communicate with the world. Jaluit business people told the Journal they are now scrambling to get generators down to Jaluit to power their freezers and refrigerators around the clock. Bank of Marshall Islands has been offering daily banking services at its Jabor branch since 2007, with two staff using Internet connections to transact business for local customers, including deposits, loans, wire transfers, and MoneyGram. That’s stopped as of two weeks ago. BOMI will begin this coming Monday to offer banking services every other week by sending a staff person from Majuro on Air Marshall Islands on Mondays who will return Friday. Services will be available while the BOMI staff is on island. BOMI President Patrick Chen said it will be difficult for the bank to provide these services without the benefit of Internet access. “But we’ll do it through radio,” he said. He expects the current situation will be temporary and once power is back to normal on Jaluit, BOMI will return to its regular daily banking service. Power bill hurts pocket book Everyone in the Marshall Islands is feeling the heat of rising electricity and gas costs. The Journal calculated a comparison of what percentage of their salaries people were paying for fuel and electricity in 2004 as compared to now. But it’s going to get worse the beginning of June, when MEC will raise rates again, possibly by nine cents per kilowatt hour across the board. In 2004 MEC was charging 11 cents per kilowatt hour for lifeline (under 500 KW hours) and 12 cents for regular residential (500 and up). In April and May 2008, the costs had nearly tripled, with MEC charging 31 cents and 33 cents, respectively, for lifeline and residential. In 2004, the average salary for private sector workers was $4,322, for RMI government workers $13,221 and for local government workers $7,188. In 2007, those average salaries changed to $5,052, $12,410 and $6,840, respectively. How much of those salaries that fuel and electricity ate up in 2004 and are eating up today are listed below. Lifeline rates: • Private sector workers in 2004 paid 15 percent of their salaries for lifeline power use at the maximum level of 499 KW hours per month. At the 2008 rates, the percentage paid for lifeline jumped to 37 percent of annual wages. • Government workers in 2004 were paying an average of five percent of their salaries at lifeline rates. That number jumped to 15 percent of wages last month. • Local government workers paid eight percent of their salaries for power in 2004. That leaped to 27 percent this year. However, if you are like hundreds of residents and use an air conditioner, chances are that you cannot keep your power use under 500 KW a month, so you’re paying the higher residential rate. If you used 750 KW hours of power ($247.50) in April and May, and you are: a private sector worker, then you were paying 59 percent of your salary for power (based on the average 2007 salary levels); an RMI worker, you paid 24 percent of your salary for power; and a local government worker, you paid 43 percent of your salary for power. If you live in Laura, gas is killing you The Journal estimated the percentage of people’s salaries that are going toward buying gas today at $6 a gallon compared to 2004, when the price was under $3. If you live in the DUD area of Majuro, and are not wasting gas by jamboing around town, but instead drive just 15 miles per day (to school, work, lunch, etc.), six days a week, that comes out to 90 miles a week. At an estimated 20 miles to the gallon, you’ll need four-and-a-half-gallons per week to run your car. At $6 per gallon, that’s $27 a week or $1,404 for a year. If you’re in the private sector (average wage last year $5,052), the $1,404 for gas amounts to 28 percent of your salary; an RMI worker (average salary $12,410) is paying 11 percent; and a local government worker (average salary $6,840) is paying 21 percent of their salary for gas. If you live in Long Island and drive your car 120 miles a week, that’s six gallons per week, costing you $36. On a yearly basis, you’re paying $1,872. If you’re in the private sector the $1,872 for gas amounts to 37 percent of your salary; an RMI worker is paying 15 percent; and a local government worker is paying 27 percent of their salary for gas. If you live in Laura, you’ve definitely got a problem. You’re going to average a minimum of 65 miles a day or 390 for the week. That’s going to take you 19.5 gallons per week, and cost you $6,084 annually. If you’re in the private sector that’s more than you make on average in a year; for an RMI worker, it’s half their salary; and a local government worker is paying 89 percent of their salary for gas if they live in Laura. From the 5/23/08 issue of the Marshall Islands Journal EPA approves GFB fish farm project The proposed fish-farming business for Majuro’s lagoon has received partial approval from the RMI Environmental Protection Authority (EPA) board, which issued a long-awaited decision Wednesday. The EPA board has given the okay to Good Fortune Bay (GFB) RMI’s commercial fish-farming plan for every species listed in GFB’s environmental impact assessment except for “cobia” — which was given conditional, small-scale approval for cobia during a 12-month review period. “Because of the controversial claims of its existence in the area and its unknown potential impacts on the lagoon environment and also on the native species should there be escapees in the lagoon, RMI EPA recommended that this species, cobia, be allowed to be cultured in the lagoon under a pilot scale project with limited production that may not exceed 2 percent (1,000 tons) of the proposed total project’s production of 50,000 tons,” the EPA said in a release. “This pilot project of the cobia will be enforced for 12 months. Upon completion of this trial period and with full satisfaction of RMI EPA that the pilot project has proved not detrimental to the RMI environment and all the (mitigation) conditions have been met, the EPA will then allow for commercial operation of this species.” On the other fish species, RMI EPA said it is satisfied that such species are reported to be present in the country. “The humpback grouper, although rare, is known to have been caught by local fishermen in isolated cases.” In approving the EIA report, RMI EPA is reviewing and revising the Environmental Management Plan to ensure that the project will not only be safe for the environment but also bring benefit to the nation. EPA said among the conditions is insurance coverage of the company’s operation for any unforeseen environmental damages, and covering the cost of monitoring. Hundreds apply for US hotel jobs Hundreds of hopeful job seekers are vying for job openings at three hotels in the US. Earlier this month recruiters representing Practical Employee Solutions and Imperial Palace Casino Resort flew into Majuro to interview potential employees. Over the past months Russell Langrine of Majuro Man Power, a local employment agency owned and operated by Langrine, has been coordinating efforts to prepare job seekers with resumes, medical checks and interview tips. The weekend prior to the arrival of the two recruiters, Langrine conducted a final group meeting at Majuro Middle School with job seekers answering questions and giving a pep-talk about living in the US and what is expected. “You’re going to America,” Langrine told a room full of job seekers, “You will live by their laws. You will struggle for now but in the future your children will succeed.” Interviews were held earlier this month with the recruiters. While in Majuro the recruiters met with Justice Minister David Kramer, the Chamber of Commerce and Continental Airlines to discuss a possible charter to fly out all the successful job seekers. From the 5/16/08 issue of the Marshall Islands Journal Fuel price leads to power cuts Jabor, Jaluit residents are facing power rationing as MEC announced Tuesday that power will be limited to 10 hours per day because of high prices from ALRO’s Jaluit bulk plant. Prices for diesel bought from ALRO at Jaluit leaped from $5.13 per gallon to $6.97, MEC said Tuesday. “The MEC power plant (on Jabor) has very limited fuel tank storage capacity and has always relied upon getting its fuel from the old Mobil bulk plant, which is now operated by ALRO,” MEC said in a public announcement. “Negotiations with ALRO have so far not been able to lower the price from $6.97 per gallon to a workable level.” MEC said it is responding to these costs by expanding storage capacity of the Jaluit power plant tanks. The Majuro power company can supply fuel directly from its Majuro storage facility to Jaluit, the same as it supplies the Wotje power plant. MEC said its cost to get fuel to Wotje is less than $5 per gallon. Jabor power will be on from 6am to 10am, and then again from 4 pm to 10 pm daily. “These new hours of operation will remain in effect until the new tanks are installed and may be further adjusted to suit the supply and cost of fuel to Jaluit,” MEC said. Hours of operation at the Wotje power plant are unchanged. With the increase in fuel price, Jaluit’s monthly fuel bill is running at about $60,000, with collections from local residents, businesses and Jaluit High School amounting to less than half this amount, according to MEC. Why on how to clean up town Waste problems such as littering and the bad habit of tossing rubbish in the lagoon are not due to a lack of awareness about waste, contends a Majuro Atoll Waste Company board member. “It’s not because people lack awareness,” MAWC board member Steve Why told the Chamber of Commerce Friday. “It’s a lack of infrastructure.” With only about 11 of the large red bins still usable, people from Rita to the airport do not have waste bins located conveniently near them anymore. To underline his point, Why asked the 50 or so people at the meeting if they were to promote awareness in the community, what would the message be? The response: “Throw your trash in the dumpsters.” But, said Why, “there aren’t many dumpsters left.” MAWC has developed plans and is ready to improve collection in Majuro — including to Laura, which currently has no government service — but needs donor assistance to make it happen. Why made two important points: • Donors are standing by, with funding ready, to support various MAWC waste improvement projects. • These requests simply need national government approval and endorsement. “There will be an emergency here in a few months, with trash piling up in the streets and in the lagoon (because of a lack of equipment),” Why said. “Beaches? What beaches? They are all full of trash.” MAWC is already developing recycling programs that pay for themselves. “We can sell steel in Australia and earn $2,000 per container load,” Why said. Because of the high fuel prices, Asian countries will buy all our PET plastic bottles, he said. But MAWC needs $150,000 for a bailing machine to make it commercially viable to ship these plastics off-island. “The solutions are all there,” he said. “It just comes down to political will.” From the 5/9/08 issue of the Marshall Islands Journal Digicel courts RMI T&C Digicel Pacific Limited, a mobile telecommunications network based in the Caribbean, invited RMI officials to visit Samoa Digicel, one of the countries in the region in which Digicel is operating. The site fact-finding trip was a follow-up to several meetings with and presentations by Digicel to the RMI government that started in early 2007. Minister of Transportation and Communications Dennis Momotaro led a RMI delegation that included Minister in Assistance to the President Christopher Loeak, Anono Loeak, Daisy Alik-Momotaro, Assistant Secretary of T&C Wallace E. Peter, and Nixon Elisa, representing government-owned radio V7AB. The trip was sponsored and funded by Digicel Pacific Limited, including the airfare, accommodation and other incidentals required during the trip, according to a release from the Ministry of T&C. The visit to Apia, Samoa included a tour of Digicel Samoa’s main operation center and the equipment control facility. Digicel told the RMI group its goal is to develop a state of the art telecommunications network, provide world class service in emerging telecommunications markets and to provide coverage, care, choice and value for money. “The presentation showed that Digicel has positively impacted the lives of the people of Samoa,” the T&C release said. “The calling rates in Samoa are very low as a result of open competition by two main local telecommunications service providers.” Digicel now covers up to 95 percent of Samoa, including the rural areas, which had no previous telecommunication services. The government-owned telecommunication network Samoa Tel also increased its subscriber and profits since the launching of Digicel Samoa. A meeting with Samoa Prime Minister Tuilaepa Lupesoliai Sailele Mailelegaoi showed government support for the services provided by Digicel, T&C said. “The Prime Minister stated that since the launch of Digicel in Samoa, there has been great improvement in communication services throughout Samoa. He also noted that Digicel has contributed to Samoa’s economic development.” The PM said in an interview with the local newspaper, the Samoa Observer during the launching of Samoa Digicel in November 2006 that “Samoa is now the envy of Pacific neighbors” due to its economic growth. The development of the private sector and open competition among service providers are key elements to economic growth in Samoa and the Pacific, the release said. Fiber optic cable deal ready to be design The US Army and its prime contractor, TKC Technology Solutions LLC, could sign an agreement this month to officially launch the multi-million dollar submarine fiber optic cable project to Kwajalein. Although the US Embassy in Majuro told the Journal that the agreement signing could be as early as Thursday this week, National Telecommunications Authority General Manager Tony Muller said he’s doubtful the Army and TKC will sign this quickly “based on the current discussions” between the two parties. Still, dates aside, once the agreement is signed, “it will be a positive and significant milestone indicating the military truly is moving forward,” Muller told the Journal. “It will also enable NTA to finally wrap up everything, in terms of its participation.” Kwajalein Commander Col. Stevenson Reed told the Journal earlier this year that the Army expects the fiber optic cable to be in operation in fiscal year 2010. “NTA will need to finalize arrangements shortly after TKC and the Army conclude their negotiations and execute a contract,” Muller said. “The signing of contracts by all of the different parties does not need to be a simultaneous event,” said the deputy chief of mission Doug Morris. “FSM Telecommunications Corporation and Marshall Islands National Telecommunications Authority have been talking to the prime contractor for many months and have negotiated draft contracts, which is standard operating procedure.” Neither FSMTC nor NTA can finalize anything until after the Army actually awards a contract. Once a contract is awarded, “all sides will need to firm up their drafts and funding and sign formal contracts for their parts of this project,” Morris said. “Our understanding is that FSMTC is all lined up to do what is needed at this point —the RMI and NTA are going to have to make some decisions and move forward in a timely fashion in order to be included.” The Majuro and Ebeye portions of the cable are estimated at about $16 million. At last month’s Chamber of Commerce meeting, NTA board member David Strauss expressed serious concerns about the costs of the fiber optic cable project. From the 5/2/08 issue of the Marshall Islands Journal General Fund deficit balloons to $2.7 million The Marshall Islands General Fund deficit ballooned in fiscal year 2007, more than doubling over FY2006, according to preliminary figures issued in the RMI government’s FY2007 Compact report to US President George W. Bush. Tax and fishing revenues fell far short of projections and while the government reduced spending by about $200,000 from the budgeted amount, the government ended the year with a nearly $2.7 million deficit (shortfall) in the General Fund. This deficit was for the financial year that ended September 30 last year. The RMI government has run a deficit in its General Fund for the past three years, accumulating debt of more than $5.5 million since FY2005. In 2006, the deficit was $1.2 million and in FY2005 it was nearly $1.6 million. Revenues in FY2007 were $2.9 million under what was expected for the year by RMI budget planners, according to the report issued last week. The RMI government blamed the shortfall on “poor revenue forecasts (and) also the under-performance of items such as fishing licenses and fuel taxes.” The RMI said it has reviewed how it forecasts next year’s budget to improve accuracy and avoid the shortfall that occurred last year. All types of tax revenue — income, import, gross revenue, fuel — fell short of predictions, while fishing rights income only produced $1.25 million, half a million dollars less than expected. Only the ship registry and past due tax collections as a result of Finance audits produced significantly more than expected, with $583,000 and $660,613 more coming from these two, respectively. Meanwhile, the government’s budget was hard hit by fuel costs for the Marshalls Energy Company, costing $1.7 million more than planned. Meanwhile, other over budget items included utilities ($854,685), land leases payments ($531,713) and travel ($432,673). “The government again experienced difficulties in FY2007 due to a continuation of the problems from the previous year resulting from increased energy costs and the corresponding impact on MEC,” the government’s report said. “These difficulties required the government to continue to support MEC’s financial position and placed substantial pressure on the General Fund.” Training phase at loining plant Pan Pacific Foods loining plant is up and running, with 234 Marshallese workers now in training in various parts of the plant. Zuliang Zhang, president of the company, told the Journal that the plant currently has only a small amount of fish that is being used to train the new staff. Operations are expected to step up significantly later in May with the arrival of a purse seiner shipment of skipjack tuna, and to further increase in June and July as the plant moves toward its goal of running a day and night shift. Zhang and field technician Mimi Taboada gave the Journal a tour of the now-operating plant earlier this week. From the 4/25/08 issue of the Marshall Islands Journal AMI re-links the outer islands to the world Air Marshall Islands flew its first commercial revenue-generating flights Tuesday afternoon, bringing passengers in from Jaluit and Kili. “We had a full flight inbound,” said an obviously delighted AMI general manager Dan Fitzpatrick. AMI’s Dash-8 conducted a successful test flight on Monday, followed by flights to Kili, Jaluit and Namdrik on Tuesday to inspect runways. Fitzpatrick said the Kili and Jaluit runways checked out fine, allowing the plane to transport passengers on the flight back from these two islands. On Wednesday, the Dash-8 was to fly to the other four outer island runways in question for inspections: Wotje, Likiep, Elenak (Mejatto, Kwajalein) and Aerok (Ailinglaplap). Fitzpatrick said the plan is to fly to Kiribati on Thursday. The Jaluit/Kili return flight, and the planned Kiribati service are the Dash-8’s first commercial flights since October 10 — more than six months with no service. “The test flight went really well,” Fitzpatrick said. “Things are looking good.” All outer island runway checks should be done by Friday, which is the day that the Dash-8 will return fully to scheduled service. Currently, only captains Albon Jelke and Jason Langidrik can fly the plane. Two more AMI pilots will leave Majuro at the end of next week for flight training in Seattle, Washington to fly the Dash-8, Fitzpatrick said. Pilots Lorak Lorak and Miles Watak will both train to be first officers on the Dash. The training is expected to take one month, and will give AMI four pilots who can fly the Dash-8. “In the meantime, I’m trying to get one more Dash-8 pilot” on a short-term contract as a backup until Lorak and Watak make it back from their training, he said. RMI doesn’t use all its Compact grant money Since Compact II started four years ago, every year the RMI government has had leftover money that was returned to the US government. But all of the “carryover” funds have been re-granted to the RMI for use in later fiscal years, Interior Department grant program specialist Alan Fowler told the Journal. FY2007 — which ended September 30 last year — produced the largest level of unused funding since Compact II started in FY2004, with $1,385,690 unspent by the RMI government, mainly the Ministries of Education and Health. “These unused Compact funds are not taken away from the RMI,” Fowler said. “They become ‘carryover funds’ and are re-granted to the RMI government in the following fiscal year.” The $256,091 unused in FY2004, for example, was re-granted to the RMI in FY2005, Fowler said. “Since Compact funds are a permanent appropriation, these funds do not lapse and the RMI does not lose these funds,” he said. Generally Compact funding unspent by one sector — such as health or education — will automatically return to the same sector, though Fowler said the RMI government can request Interior approval of reprogramming to other areas. Compact infrastructure funding is treated separately from Compact grant funds, Fowler said. The infrastructure money remains “available from year to year until used and therefore is not part of the carryover process,” he said. Since Compact funds are a permanent appropriation, these funds do not lapse and the GRMI does not lose these funds. The “carryover” amounts for the past four years: FY 2004 — $256,091, FY 2005 — $739,897, FY 2006 — $573,768, and FY 2007 — $1,385,690. From the 4/18/08 issue of the Marshall Islands Journal All Shipping Corporation ships in port An unusual sight witnessed at Uliga Dock this week has brought to reality the vulnerability of the RMI to external conditions. The sight of all Shipping Corporation ships in port is a sign of the times. The problem, however simple, runs like many stories of late — rising fuel cost compounded by a government cash flow crunch. An official with the Shipping Corporation told the Journal that they have been trying to negotiate a lower fuel price with Marshalls Energy Company but the terms of that deal which will give the Shipping Corporation a price break if it buys bulk is still out of reach. Meanwhile, the Shipping Corporation receives a subsidy from the national government of $200,000 a quarter. For this quarter starting April 1, however, it’s only received $20,000. This is not a story of finger pointing, it’s merely the reality of the situation, according to officials from both the Shipping Corporation and the Ministry of Finance. Secretary of Finance Jefferson Barton said the government does its best to meet its obligations and is hopeful that before the end of the quarter it will pay its full obligation to the Shipping Corporation. The challenge is juggling payments for government subsidies, which are all due at the same time, for government agencies, authorities and corporations. “It’s the same situation every year,” said Barton. “But the issue of meeting (government expenses) is becoming more challenging. Cost of operations are going up yet resources and revenue haven’t changed therefore there will be a slowness in providing services.” Barton said the problem hurting government budget is rising fuel costs. “We can’t continue with the ‘business as usual attitude’ with fuel prices rising,” he said. “We need a strategic approach.” Another hurdle for the Shipping Corporation is that all its vessels are long overdue for repairs and maintenance in the dry-dock. It has been unable to secure a scheduled time with PII for the dry-dock. Despite these multiple problems, however, the Shipping Corporation official said it’s working to maintain the schedule. The Lañdrik, which needed a replacement generator, had a standby generator installed to make its rescheduled Wednesday departure. Aemman is scheduled to depart on Thursday this week but it doesn’t have money to buy fuel following a large payment to MISSA for its 80 employees. Members query phone policy The view on NTA’s cell phone billing policy appears to be split. Despite questions opposing the current system of making the caller pay the 10 cents per minute charge, several speakers said they favor the current “sharing” system. Kirt Pinho said being out on Rong Rong when he runs out of minutes on his cell phone, he’s happy that he can still receive incoming calls so he can talk to the outside world instead of having to get in a boat and riding 30 miles back to town to buy a new card. The current system charges whoever is making the call to or from a cell phone. Carlos Domnick also voiced support of the current system, saying “I don’t want to pay for others’ calls.” NTA general manager Tony Muller explained the 10-cent charge as a fee “to access the wireless network.” He said the board of directors can take the matter up for consideration. Bill Weza asked why charge landlines additional to call cell phones when they are already paying a monthly fee for their service? David Strauss, who was emceeing the forum and is also an NTA board member, said “we’ll think about it” in response to Weza’s query. From the 4/11/08 issue of the Marshall Islands Journal The Rice Crisis By SUZANNE CHUTARO The cost of living in the RMI is about to go up another notch as fuel surcharges, freight rates and world prices on essential staple foods such as rice and flour are skyrocketing. Local importers and wholesalers, who keep a close eye on world prices of food, warn that these external factors compounded with the recent domestic price rise in fuel and power are going to further burden residents. According to Pacific Basin’s Robbie Chutaro, rice prices were relatively stable until February when wholesalers noticed a 35 cent price spike in the cost of a 20 pound bag. Since then the price of rice has steadily increased with every shipment into Majuro. The latest shipment of rice will likely jump to $8.10 a bag at wholesale — a 15 cent increase from the last shipment. Chutaro warns, however, that the sharpest increase in prices is still to come in May. Based on rice prices out of Australia, Chutaro says by May, the Majuro wholesale price for rice will likely be $9.30 a bag — this does not include the local government’s four percent tax or the additional mark up local retailers will add. “Australian rice prices have risen drastically,” confirms Payless Supermarket manager Ray Bandy, adding that the wheat market has also been “volatile” adding pressure to the price of flour. Bandy says his company has seen the price of flour rise by $4.23 per 10kg bag in a six-month period. “I’ve been doing this (grocery business) for 38 years,” said Bandy. “The last two years is the worst I have ever seen.” And it’s not getting better. On Friday, BBC reported that many rice producing countries have “stopped export completely,” safeguarding stocks for their own citizens. Meanwhile, countries like China have imposed export quotas. Local wholesalers say they have been searching the world for a supply of affordable rice. Most recently Majuro has seen the introduction of Pearl Rice, a Chinese brand sold out of the Philippines. It has been selling at $6.45 a bag but is expected to increase. “Doesn’t matter where you go to buy rice now,” said Bandy. “It’s all increased.” ROC helps AMI with rescue grant funding Taiwan Ambassador Bruce J. D. Linghu presented a check for $600,000 to Foreign Minister Tony deBrum and assistant secretary of Finance Jemi Nashion Tuesday this week. It’s a special grant from the Republic of China (Taiwan) to the RMI government for the restoration of Air Marshall Islands (AMI) flight services. The Ceremony was witnessed by Acting Secretary Kino Kabua and a representative of AMI. “Over the years, bilateral relations between RMI and Taiwan have been further strengthened through many joint efforts,” Linghu said. “In response to the financial assistance need for the AMI’s recovery plan, the government of the Republic of China acknowledged the importance of the airline to RMI’s infrastructure as it provides essential services for transportation, health, education and welfare as well as economic development in the communities of the outer islands.” Taiwan provided a $1 million check for AMI on January 18. From the 4/4/08 issue of the Marshall Islands Journal AMI woes As soon as Air Marshall Islands fixes one problem with the Dash-8, another crops up. The latest is the uncertainty caused by the unannounced departure from Majuro of one of only two local pilots currently certified to fly the Dash-8, forcing AMI general manager Dan Fitzpatrick to attempt to hire at least one qualified pilot from outside on a short term contract until AMI can send out additional local pilots to be re-certified at the Seattle-based facility. Parts to fix the exhaust pipes on the 34-seater Dash were expected to arrive Wednesday night this week, and Fitzpatrick told the Journal this is expected to take just a few minutes to install, meaning that the airline aims to have flight testing of the plane starting from later this week — but that depends on having two pilots to fly the plane. One of the two Marshallese pilots who was recertified in February at a cost to AMI of $9,000 refused to sign an agreement that would require his service to AMI, according to both Fitzpatrick and board members. Then last week, this pilot left the islands without communicating with airline management, which had earlier expected to begin flight-testing on Monday this week. Fitzpatrick told the Journal on Wednesday that he has 14 possible options with certified pilots who may be candidates to be brought in quickly to fill pilot positions. He said the aim is to send more Marshallese pilots to be re-certified, but the first available slots available at the Seattle flight facility are early May and the airline can’t wait that long to get the Dash-8 flying. Meanwhile, the delayed part situation and continued grounding of the Dash-8 is wreaking havoc on the Bikini dive program. A group of 12 divers arrived in Majuro Tuesday from England with paid-for plans to fly to Bikini on Wednesday to scuba dive for a week — a plan that is, of course, not happening, much to their unhappiness. Niedenthal said “we’ve begun discussion about pulling the plug on the Bikini dive program.” Bikini’s concern is not just to see the Dash-8 flying, but to have assurance that there will be a flight every week. The problem with only one plane in operation is that if it breaks down on an outer island — or even in Majuro — the divers and other passengers on outer islands may be stranded for an unknown length of time. Migration hurdles By GIFF JOHNSON What is different about the current situation of heavy out-migration of Marshallese and Micronesians to the US is that leaders in the freely associated states are now engaging with Hawaii state officials to address the many issues that have largely been ignored until recently. That is the view of Hawaii state Senator Kalani English, who spent the weekend in Majuro to meet with American Samoa Congressman Eni Faleomavaega, US Ambassador Clyde Bishop and RMI officials. “Our side is open and willing, and now the Marshalls side is, too,” English told the Journal. “Good progress between Hawaii and the Marshall Islands can get results and it will be difficult for the federal government not to support it.” The three freely associated states (RMI, Palau, Federated State of Micronesia) and Hawaii “are on the same page and now (Congressman) Eni is on the page,” English said. “I’m excited because things are lining up. Our combined forces are much greater than one alone.” English said his aim is to create a situation where “we have measurable outcomes. It will give more ammunition for the Hawaii (Congressional) delegation.” English and the Hawaii delegation are pushing to get the federal government to eliminate the $30 million cap on Compact impact funding so that the federal government begins picking up the tab of the Compact, which it approved with the freely associated states. Asked about attitudes of people in Hawaii toward Marshallese and Micronesians with recent media coverage of homeless islanders, English said attitudes “are still open. That’s why it’s important for Marshallese/Micronesians to engage.” He noted that at least one Samoan-run church in the Waipahu area has been very active in providing services to Marshallese, which he sees as a good sign. “It’s one immigrant group helping another,” he said. “Everyone in Hawaii was an immigrant at one time.” He said he wants to see Marshallese and Micronesians integrate well into Hawaii, and is keen to see more get job training so that they can climb up the ladder. He noted that the five-star Four Seasons Hotel in Kona and Lanai has been actively hiring Kosraeans because of their good work ethic. “The business community recognizes the potential of Micronesians,” he said. From the 3/28/08 issue of the Marshall Islands Journal RMI Average Wages Average individual wages in the RMI declined very slightly in FY2007 compared to FY06, according to a new EPPSO report. The report shows that the average wage in RMI in FY07 was $9,544, compared to the slightly higher $9,654 in FY06. The report demonstrates that based on average annual salaries, the banking sector pays the highest average at $17,353 in FY07, up about two percent over the previous year. Next highest average wages are paid to workers at Kwajalein, who earned an average of $15,818 in FY07 — also down from FY06 level of $16,262. National government agencies paid $14,696 on average in FY07, down from a record high of $15,731 in FY06. Foreign embassies paid the next best at an average of $13,181. The RMI national government came in at $12,606, up very slightly over FY06. RMI public enterprises paid an average of $11,765 to their workers, down from $12,154 in FY06. Local governments paid an average of $7,876 in FY07, compared to $7,694 in FY06. Private sector paid an average wage of $5,078 in FY07 — its highest since FY01, the last time that the private sector’s average wage topped $5,000 per year. Non-governmental organizations paid their staff an average of $5,058 per year in FY07, up a bit on the $4,996 in FY06. Kwajalein Wages Crash by 6.5% Salaries for Marshallese working at Kwajalein declined by 6.5 percent in fiscal year 2007, according to the RMI government. An employment statistics report issued by the Economic Policy, Planning and Statistics Office (EPPSO) shows that total wages earned by Marshallese at Kwajalein declined to $18.7 million FY2007 from a record high of $20.1 million in FY2006. The drop in Kwajalein salaries went against a national trend of a slight overall increase in wage earnings in the RMI. EPPSO said that total salaries rose to $96.8 million in FY2007, up 1.2 percent from FY06’s $95.7 million. The 1.2 percent increase was the smallest salary increase since salary levels actually dropped by one percent in FY98. Since FY99, salaries increased from as little as 2.5 percent (FY03 and FY05) to 8.3 percent (FY00), the EPPSO report showed. Overall, total employment was up by just over two percent in FY07, which was not as good as FY06 when the number of jobs in the RMI increased 3.5 percent. The 2.3 percent job increase in FY07 meant 231 new jobs, of which 171 were in the private sector. All told, there were 10,149 people employed in the RMI in FY2007 — the highest total ever. The breakdown of the 10,149 jobs in FY07: • Private sector, 38.5 percent. • National government, 23.5 percent. • Government public enterprises, 7.2 percent. • Government agencies, 4.5 percent. • Local governments,10.5 percent. • Kwajalein base, 11.7 percent. • NGOs, 3.9 percent. • Foreign embassies, 0.2 percent. The 10,149 jobs reported in FY07 is an all-time record, with the last highest record year being FY04, when 10,070 people were employed. The EPPSO report noted that there was a four percent drop in Kwajalein jobs in FY07 — 49 jobs were lost between October 2006 and September 2007 — leaving the total Marshallese workforce at Kwajalein at 1,187 on September 30 last year. From the 3/14/08 issue of the Marshall Islands Journal MITA’s Ambitious Plans for Tourism Details of the Marshall Islands Visitors Authority’s new four-year tourism action plan for the RMI were disclosed at the first national tourism symposium that kicked off Monday in Majuro as part of National Tourism Week. “Tourism is vital to the nation’s economic growth,” said R&D Minister Fred Muller at the event. The Minister urged tourism industry people to ensure that the plan is focused on fostering development that “puts the needs of Marshallese first.” He also acknowledged that tourism has “not received a fair share of the (government’s) budget,” and pledged to change that in the future so “as tourism grows, so will government support to MIVA.” Dr. John Salas, who teaches international tourism and hospitality management at the University of Guam, said there is a huge opportunity for tourism growth in the Micronesian area. But the essential — and at the moment missing — element is solid regional cooperation promoting a “Magnificent Micronesia” theme that pools the small resources of each country into strength, and lower costs, for overseas marketing. He said that the Micronesian chapter of the Pacific Asia Travel Association — in which the RMI is a member — is playing an increasingly important role in promoting the region. “Like in a canoe, we need to row together,” Salas said to encourage greater Micronesian cooperation. Salas also said that each destination has to identify what it has to offer visitors that is different from what they can get elsewhere. “We need to create global awareness (of the islands) and be different from other destinations,” Salas said. MIVA consultant Ben Graham then described the basics of the MIVA four-year plan, and a new ABC — Awareness, Beautification and Cleanup — campaign to be led by a consortium of local groups, including MIVA, Marshall Islands Tourism Association, Majuro Atoll Waste Company and Marshall Islands Conservation Society. Graham described the new tourism plan as “the first national level tourism plan that is homegrown.” The four-year plan is specifically timed for the political cycle of elected leaders, he said, adding that once finalized in the next few days, it will be submitted by Minister Muller for Cabinet blessing. “Tourism is a way to harness growth and generate development,” he said. It is estimated that visitors to the RMI now spend between $4 and $5 million a year, with about 300 jobs catering to visitors in local hotels, restaurants and diver operations. Three key elements of the plan are to: • Develop Majuro as an attractive gateway to the rest of the country, operating as an effective hub. • Develop Kwajalein as a destination and a hub for nearby islands. • Facilitate outer island tourism by improving transportation and infrastructure. “It’s an ambitious plan,” he Graham. “We’ve identified many areas and problems that need to be addressed.” NTA Increases Channels NTA has increased the number of cell phone channels and improved coverage in the Laura and Ajeltake areas. In response to questions from the Journal about problems with the cell phone system in recent weeks, NTA general manager Tony Muller provided a rundown on developments in the past several weeks. “With the arrival of equipment and an engineer, we’ve replaced our old OMC server with the new one in Majuro,” Muller said. “We encountered a bit of a link problem but have resolved it. This discrepancy would have caused drop calls in the DUD area” at the end of February. This, too, was resolved, Muller said. Laura’s upgrade was to test omni-antenna coverage with more capacity. But during the tests, “coverage deteriorated with this setup, so we reverted back to sectorized coverage,” Muller said. This means that Laura and Ajeltake have both gone from 14 to 21 sectorized channels. From the 3/7/08 issue of the Marshall Islands Journal Money Moving Big Biz Workers in the Marshall Islands sent $22 million overseas in 2007, according to the chief executive officer of Media Communications, James Matayoshi. “And that’s just through the registered operations,” Matayoshi told the Journal. On the flip side, Matayoshi said that just $400,000 makes its way into the Marshall Islands. These figures are key to the mayor of Rongelap Atoll Local Government because of his new partnership with the Levinia family and their remittance and Visa debit card company, which is located above Payless Supermarket near the Women United Together in the Marshall Islands office. The new company was set up a couple of months ago, but is now “officially open” and being run by secretary and manager Lenny Laviña. “We are networked with Kwik Remittance Hawaii LLC,” said Matayoshi. “They provided us with the platform to deal with remittances. Compared to Western Union, our rates are 40 percent less.” Using the remittance system, people can send money to, for example, the Hawaiian islands, Australian, Hong Kong, and Singapore. “We also have a link with Taiwan, which will be great for our students over there,” he said. The Delap company also provides customers with Visa debit cards. “There’s no minimum balance,” he said. “You put $100 in, you spend $100. I use mine to buy groceries.” Matayoshi believes the new service will be of benefit to all Micronesians. “We will be opening offices in Kosrae, Chuuk, and Pohnpei,” he said. Currently, the company is logging movement of about $20,000 a week, mostly from Filipinos, with the hope that this will rise to $50,000 to $60,000 in remittances a week. Paul Allen's Jet Denied Access to Kwaj Although the US Army turned down Paul Allen’s request to briefly transit Kwajalein on his way to Bikini last Friday, the billionaire computer mogul showed “where there’s a will, there’s a way.” His 414-foot mega-yacht Octopus, which had been at Bikini Atoll since last Thursday, moved to within helicopter range of Majuro, dispatching one of its two helicopters to Majuro Saturday. The helicopter was positioned at Amata Kabua International Airport overnight Saturday, and Allen’s private jet flew him into Majuro Sunday. He was then whisked by helicopter to his waiting yacht, arriving Bikini Sunday. US Army Kwajalein Atoll public affairs official Marcos Morales told the Journal that “the US Army Aeronautical Services Agency in Washington denied Allen’s request (to have his plane and helicopter land at Kwajalein) last Friday.” The Octopus arrived in Majuro late afternoon last Tuesday, spent about four hours here, and then headed out to Bikini. Allen is the third richest American, having made his fortune in computers as an early partner with Bill Gates at Microsoft. From the 2/29/08 issue of the Marshall Islands Journal Strauss, Obeketang on Revamped NTA Board A new-look board was appointed for the RMI National Telecommunications Authority Tuesday night at its annual general meeting. Significant developments of the new board include only one elected official, Transportation and Communications Minister Dennis Momotaro, and new business sector members including Marshall Islands Chamber of Commerce President Hirobo Obeketang and outspoken private attorney David Strauss. The RMI government controls NTA’s board appointments because it owns a majority of NTA stock. Other new NTA board members include Hilda Heine, Lynn Milne and Sheldon Anjain. Continuing members rounding out the eight-member board are Bank of Marshall Islands President Patrick Chen and RMI Taiwan Ambassador Alex Bing, who has been NTA’s chairman for many years. Other developments on the NTA front include Bank of Marshall Islands plan to purchase $240,000 worth of NTA stock later this week. Chen told the Journal that the BOMI board approved the stock purchase at its board meeting Wednesday. Our Airline Again??? Foreign Ministers from the Marshall Islands and Nauru signed an air service agreement last Thursday that is part of an effort to resume flights into Fiji by Nauru’s Our Airline. The signing Thursday in Taipei by the Ministers Tony deBrum and Kieren Keke also highlighted the multi-million dollar aid that Taiwan has supplied to national airlines of both nations. Taiwan in 2006 bought Our Airline’s Boeing-737 at an undisclosed cost, and has injected $3 million into Air Marshall Islands for the purchase of a 34-seat Dash-8 and maintenance. Up to the end of 2005, Nauru linked four western Pacific nations with Australia and Fiji. But when Air Nauru’s single Boeing-737 was repossessed for lack of lease payments in December that year, Fiji’s national carrier Air Pacific stepped into the lucrative Nadi, Fiji-Tarawa, Kiribati route and has been operating two flights each week since. Last year, Fiji rebuffed efforts by Nauru’s new carrier, Our Airline, to resume service to Fiji, said Keke. The business that Our Airline could generate from the Fiji route is critical to the economic survival of the struggling new carrier, airline officials say. Keke said Our Airline is covering its costs largely because of charter services it operates in Australia. The Marshall Islands, however, has an air service agreement with Fiji, which it hasn’t used since halting flights to the South Pacific by Air Marshall Islands in the late 1990s. The aim is to have Our Airline provide the service to Fiji for Air Marshall Islands, Keke said. The Marshall Islands last month submitted a request to the Fiji government to revive its air service agreement utilizing Our Airline, but has not received a response, officials here say. “It is usually a regulatory formality to apply for the license to operate once you are ready to take up use of the rights,” Keke said. But a return of Our Airline to servicing Fiji and Kiribati threatens to cut into Air Pacific’s monopoly on the Fiji-Kiribati route. Still, Marshall Islands and Nauru officials expressed optimism that the new service will get the okay from Fiji. “The memorandum (signed Thursday in Taipei) will see the pooling of air service rights with the right aircraft types, in commercial code share agreements between Nauru’s and the Marshall Islands’ airlines,” Keke said at the ceremony in a prepared statement. “This high level of cooperation will result in an expansion of air services in our region again linking several of Taiwan’s allies together and with more destinations.” Our Airline currently flies from Brisbane, Australia, to Tarawa, Kiribati, with stops in Honiara, Solomon Islands and Nauru enroute twice a week. Mounting losses forced it to halt service to Majuro in mid-2007. From the 2/15/08 issue of the Marshall Islands Journal MALGOV Told Not to Harass Mobil By GIFF JOHNSON The High Court ordered MALGov not to issue fines or take any punitive action against Mobil Oil Micronesia in the ongoing dispute over MALGov debt to the Marshall Islands Social Security Administration. Mobil filed suit Friday against MALGov and High Court-appointed receiver Philip Okney, asking the court to prevent the fuel company from being caught in the middle of a battle over who should get the monthly sales tax payments. In November, the High Court appointed Okney as receiver to sort out MALGov’s multi-million dollar debt to MISSA. In January, Okney obtained sales tax payments directly from Mobil and two other businesses, paying $131,000 to MISSA and returning the balance of $19,000 to MALGov. But MALGov is objecting to Okney’s action, and last month sent letters to Mobil and other tax payers threatening them that failure to pay taxes directly to MALGov is “a violation of MALGov ordinances (and) is a ground for reconsideration and where necessary revocation of licenses.” MALGov has appealed the issue to the Supreme Court and argues that until the Supreme Court resolves the matter, tax payments should continue as in the past — directly to MALGov. Mobil filed suit to get court action in advance of this week Thursday’s monthly tax payment deadline. On Tuesday, Mobil received the response it was requesting from Chief Justice Carl Ingram, who ordered MALGov and Okney not to take any punitive action against Mobil until the matter is resolved. He specifically told MALGov not to send any letters, “threatening or otherwise,” to Mobil. On Wednesday, after attorneys for the parties had agreed, Ingram directed Mobil to pay its MALGov sales taxes directly to receiver Okney, and Okney is to pay MISSA what it is due and turn the balance over to MALGov, which is restrained from penalizing Mobil. Airline Back by March Air Marshall Islands is expected to back in the air by early March but that doesn’t necessarily mean air services will return to the way they’ve been in the past. AMI general manager Dan Fitzpatrick, while unwilling to declare an actual date the national carrier will be back in the air, told members of the Marshall Islands Tourism Association at their general monthly meeting last Thursday that it’s possible the Dash-8 will be back in service sometime between the end of this month and early March. But not all outer island destinations should expect service even after the planes are flying again, the AMI GM said. “AMI will focus on commercially viable routes and rebuild itself that way,” said Fitzpatrick. While there is a schedule for the Dash-8, Fitzpatrick indicates that getting the Dornier operating will “be a challenge.” The Dash can only service the bigger runways, while the Dorner services the smaller outer island runways, He said AMI is considering to send both Dorniers off island for maintenance. “The (Dorniers’ age) are less than half-life,” he said. “They should be sent off Island to extend their longevity.” Meanwhile, as a result of the ROC/Taiwan $1 million grant received in early January, Fitzpatrick reports that parts for the Dash-8 have already been ordered, pilots were scheduled to depart Majuro over the weekend for re-training and AMI is now advertising vacancies for engineers and mechanics. From the 2/8/08 issue of the Marshall Islands Journal AUDIT: MEC at Risk The dire financial condition of the Marshalls Energy Company in the 2005 and 2006 period prompted Deloitte and Touche auditors to raise questions about its ability to continue in business. “MEC’s recurring losses from operations and net deficiency raise substantial doubt about its ability to continue as a going concern,” said the fiscal year 2006 audit presented to Nitijela last week. Even MEC’s own overview statement included with the audit makes the point that “an increase in net assets over time normally indicates an improvement in financial condition” — and in the next item shows that MEC plunged from positive net asset worth of nearly $4 million in 2004 to minus (deficit) net assets of $3.2 million in 2006. That’s a loss of $7.2 million over two years. The 2005-06 period was marked by several major financial developments: • Skyrocketing world market prices for fuel that pushed utility costs from $11.8 million in 2004 to $17.1 million in 2006. • Increasing revenue from electrical customers, as MEC hiked its rates substantially. Utility revenue rose from $8.6 million in 2004 to $11.5 million in 2006. • A reduction in revenues from fuel sales, as MEC was forced to halt sales to fishing vessels — sales that previously helped to subsidize costs of electricity. Revenue from fuel sales dropped from $14 million in 2005 to $9.8 million in 2006. The audit shows that MEC was owed more than $4.3 million in 2006, of which the auditors said $2.1 million is “uncollectible accounts.” “MEC has sustained substantial operating losses in recent years,” the audit said. “Management acknowledges that it is currently dependent on RepMar and its ability to pay for actual services rendered in order to maintain MEC as a going concern.” If the government chose not to continue subsidizing MEC, the utility may need to consider raising electricity and fuel rates “to maintain MEC as a going concern.” The audit noted that MEC received a $12 million bank loan on May 25, 2007, after the period of the audit. The loan was guaranteed by the RMI government. The report also noted that in October 2006 and March 2007 — after the audit period for FY 2006 — the RMI provided money advances of $1 million and $1.7 million, respectively. The Chamber Plays the Mnopoly Game How much power do monopolies have in Majuro? This question comes to mind as efforts to accommodate the busy schedules of business people is proving to be more of a challenge than the Marshall Islands Chamber of Commerce bargained for. A mini-survey taken in January to find a suitable time to host monthly chamber meetings resulted in a can of worms with complaints from members whizzing their way through the world wide web to Chamber secretary Jim McLean on why such and such a day is not suitable. Take Continental Airlines and its monopoly over our international air access. Turns out Continental’s Salome Andrike, who is an executive member of the Chamber, can’t make the Tuesday meetings because it conflicts with flight schedules. So to accommodate that, several members decided Wednesday would be appropriate. But then this day conflicts with the Journal’s monopoly over producing the RMI’s only weekly dose of the “world’s worst news.” The reply sent to the Chamber: “If you want us to cover stories on your activities then it ain’t gonna happen because Wednesday its production day!” Back to the drawing board. Mondays don’t work simply because of ‘blue Monday’. Tuesday and Wednesday are already out, that leaves Thursday but still that conflicts with Continental’s schedule and it seems to be another popular day for other meetings of other organizations. That leaves Friday. “Provided it doesn’t eat into my T.G.I.F happy-hour time, I got no problem with it,” said ace reporter Mary Robinson. “You know how these chamber meetings have a way of dragging late into the afternoon.” Technically, it appears all except Mary seem okay with this new Friday Chamber meeting schedule. According to new Chamber President Hirobo Obeketang, the Friday, February 15 meeting will be held at the Melele room. It will feature, much to Mary’s delight, the young men’s group Antoone 2020. From the 2/1/08 issue of the Marshall Islands Journal JAL Halts March Charter By SUZANNE CHUTARO Japan Airlines has cancelled its only scheduled charter flight for 2008, prompting many locals to wonder if this is the end of the direct Japan-Marshall Islands JAL service. But Marshall Islands Tours’ President Satoshi Yoshii says the cancellation is due to a lack of lead time to sell seats on the direct charter. The joint decision by leading wholesaler Marshall Islands Tours and Japan Airline executives was made earlier in January in the interest of ensuring the future sustainability of the direct Japan-Marshall Islands charter. Yoshii told the Journal last Thursday that both parties agreed to cancel the flight to avoid failure. “If we fail (now) then we have to reset the market,” said Yoshii. “It will be difficult to keep interest in the charter.” According to Yoshii the decision was necessary as travel wholesale companies like MIT, JALPAK and the five other smaller wholesalers who sell block seats on the JAL charter say they need at least six months to successfully sell the Marshall Islands as a destination. “Customers are interested in coming but giving notice of a charter only two-to-three months ahead is not enough lead time for planning,” said Yoshii. “(Japanese) customers tend to make their plans six-months in advance” plus wholesalers need to create flyers and other promotional materials to compete for customers in Japan’s hotly sought after travel market. Knowing this problem, however, raises the question of why Japan Airlines has been announcing its charters only two-to-three months in advance. The solution, although simple, is technical said Yoshii. Since JAL started its direct charter flights into Majuro, Yoshii said there has been discussion with the Ports Authority and then Transportation Minister Michael Konelios on JAL’s need of turning lights at the end of the runway. According to Yoshii the JAL charter flight is a 767 series aircraft and because of its wider body, the turning path is “just enough” to make its turn at the end of the Amata Kabua International Airport runway in day light. Ideally though, he said, JAL would prefer night time arrivals and departures. JAL flights are already scheduled to handle their regular day time schedules, Yoshii said adding that JAL can only schedule a charter if one of its regular daily flights are cancelled or if there’s an opening. “If JAL can arrive and depart at night then they can schedule the flights half-a-year in advance,” said Yoshii. During the first two JAL charters, all 200 seats were booked solid because wholesalers had a five month lead time to sell the flights but after that, the passenger numbers started to lag bringing in between 150 and 180 passenger in the last four charters. “JAL is okay with the the last six charters,” said Yoshii, but he adds: “they’d like to do better. We want to get back up to 200 passengers. We’re looking at scheduling proposal of eight to 10 charter flights flights between July and December this year,” he said. This, of course, is all dependent on the Marshall Islands installing turning lights at the end of the runway. According to Yoshii, JAL executives told him they are keen on seeing the Marshall Islands become the next Palau. “They want to see this succeed,” said Yoshii. “JAL would like to develop a strong relationship with the Marshall Islands. “I believe that if we have the turning lights, it will be no problem for JAL to make its (charter) schedule decision — JAL’s policies require 100 percent safety and they need these lights to operate at night.” On Friday Yoshii, the Marshall Islands Visitors Authority and Marshall Islands Tourism Association’s Chairman Ben Graham, met with newly elected Transportation Minister Dennis Momotaro to inform him of this issues. Airline Adds Bonus Flight Continental Micronesia has added an additional one-stop Island Hopper flight connecting Majuro with Guam and Japan for the peak summer months. The one-stop Island Hopper will operate twice a week on Tuesdays and Saturdays during peak period: The one-stop will operate on Tuesdays beginning June 10 and ending August 12, and on Saturdays beginning June 14 and ending August 16. The current Saturday one-stop flight will end on June 7, 2008 and re-start on August 23. “The new timing on the one-stop will continue to let passengers make their connections onward to US mainland cities, and in some cases, the timings allow for better connections,” said Continental Micronesia Asia and Micronesia Director for Sales and Marketing David Kendell, who is based in Guam. The flight will operate twice a week on Tuesdays and Saturdays during peak season, and once a week during off peak season on Saturdays. From the 1/25/08 issue of the Marshall Islands Journal Cabinet Tackles Cars President Litokwa Tomeing’s new administration has hit the ground running announcing on Monday two new Cabinet approved policies to cut government expenses. The first announced by Minister in Assistance Christopher Loeak was a complete ban on government funds paying for alcohol at government functions or parties. “Government money will not be used to buy alcohol,” said Loeak. “All government functions will have a no-host bar and individuals can buy their own (alcoholic) drinks.” The second policy he announced regarded government paid-for vehicles for the ministers. Highlighting a lack of government funds and need to reduce expenses Loeak clarified that Cabinet ministers will be provided with vehicles to use while they are in office, but once they are out of office they have the option to purchase the vehicle or return the asset back to the government. “If (the outgoing Ministers) don’t want to buy their vehicle then return them (to the government),” he said. “This policy applies to all Ministers, Speaker and the Vice-Speaker who are provided with a government vehicle.” Following on from Loeak’s policy announcement, Minister of Finance Jack Ading asked for the former ministers under Kessai Note’s administration to return their vehicles which were issued to them. On Tuesday, it became evident that not all vehicles for ministers had been returned to the government. Minister of Foreign Affairs Tony deBrum who was responding to a slew of questions by members of the UDP who wanted to know status of RMI’s foreign policy with respect to the Republic of China-Taiwan said that policy issues would be addressed after a proper review by the government of the nation’s current situation but he added the new ministers didn’t even have the basic tools such as computers in their offices or vehicles to carry out their day-to-day operations. Former president Note then questioned this vehicle policy saying that the past practice has been for former Ministers to keep their vehicles. “Some former ministers still have their vehicles, they never returned them,” said Note. “But if this is your new policy then well see.” Taiwan Helps AMI with $ 1Million Taiwan Ambassador Bruce Linghu presented a check for $1 million to RMI Ministers Jack Ading, Dennis Momotaro and Tony deBrum last Friday. The funding is to assist Air Marshall Islands to get its planes back in the air after more than three months with no service. Linghu told the ministers that after he informed Taipei about AMI’s situation, he received a quick response, with President Chen Shui-bian promising funds to help. It took just over a week from Chen’s promise to the delivery of the funding. DeBrum thanked the ambassador, saying he knew that it took significant “bureaucratic know how” to get the funding issued so quickly. The airline is “developing a full recovery plan, which will be provided to the Embassy, so you can see that you are not throwing good money after bad,” deBrum said. “You can count on our commitment and partnership,” Linghu said. In a release, the Embassy said that “Taiwan attaches great importance to this cooperative and mutually beneficial relationship with the people and government of the RMI.” From the 1/18/08 issue of the Marshall Islands Journal Silver Shadow Coming to Town A first big event kicking off the New Year for the local tourism industry is next month’s visit to Majuro of the Silver Shadow, a cruise ship run by the Silver Seas cruise line. Its more than 300 passengers and 300 crew will hit town Saturday February 16 for a five-to-six hour visit that is expected to provide a shot in the arm for local businesses. The cruise ship will anchor in the lagoon, and use RRE’s Shoreline for a staging area, company representative Bill Thayer told the Journal last week. He has been in town meeting with various officials in preparation for the first visit by this cruise ship company to Majuro. Various handicraft and other local vendors are expected to set up booths for the arrival next month. Majuro Marine’s Bori Ysawa is agent for the cruise liner. Thayer explained that the number of passengers is small because this is a “high end” group on board, with an almost one-to-one crew-to-passenger ratio. He’s hoping that this initial visit will stimulate more port calls by the company in the future. “This region is poised for increased interest in cruise ship port calls,” Thayer said. Majuro will be the vessel’s first port call in the Micronesian area. After Majuro it heads onto Pohnpei, Guam and Saipan, and then to the South Pacific and Asia. Tony to Taiwan: We’re Still Pals By GIFF JOHNSON Marshall Islands Foreign Minister Tony deBrum last Friday reassured a visiting Taiwan government envoy of the new government’s support for relations with Taiwan. It is the strongest sign of support for links with Taiwan issued since the new government took over on January 7. Although the relationship was called into question with the election of President Litokwa Tomeing, who before the vote had called for shifting recognition to the People’s Republic of China, deBrum, speaking for Tomeing Friday night, told Taiwan Vice Minister of Foreign Affairs Elizabeth Y.F. Chu that the Marshall Islands “cherishes the relationship” with her country. Tomeing and most of his Cabinet turned out to welcome Chu Friday at a reception at the RRE compound hosted by the Taiwan Embassy in Majuro. Chu arrived in Majuro Thursday to meet the new President, and was to depart Saturday, but extended her visit through Monday to attend Monday’s inauguration for Tomeing. The two countries have had diplomatic ties for 10 years. Taiwan President Chen Shui-bian in a telephone call to Tomeing Wednesday promised “all help” for the government’s ailing national airline, whose two planes have been grounded for more than three months. Chu confirmed Taiwan’s plans to inject a multi-million grant for the airline, and objected to this funding being labeled “checkbook diplomacy.” Getting the planes flying again is “urgently needed for medical care because people (on remote islands) cannot get to hospital,” she told the Journal in an interview. “We come to help. It shouldn’t be criticized as so-called checkbook diplomacy.” Taiwan Ambassador Bruce J.D. Linghu said Saturday that he expected the urgently needed funding to begin arriving this week. The funding will “take care of the costs to repair both planes and to cover airline bills that need to be paid,” Linghu said. “We promise to repair Air Marshall Islands planes,” Chu said at Friday’s reception, sparking applause from the gathering of government and business leaders, including President Tomeing. “This is the most urgent need for everyone.” At least one child from a remote rural island died late last year with no planes available to evacuate patients to the hospital in the capital, and the country’s flagship tourism business — scuba diving on the World War II fleet of warships sunk in Bikini Atoll’s lagoon — is in danger of being closed without the airline. An airline official indicated that Taiwan had committed to providing $2 million needed to pay for parts and repairs of the 34-seat Dash-8 and 19-seat Dornier 228 aircraft. The airline official said they should be able to get the Dash-8 back in service within about three weeks from receipt of funds. Linghu confirmed that the funding for the airline is outside the normal $10 million annual grant provided to the Marshall Islands. Taiwan is the second biggest aid donor to the Marshall Islands behind the United States. From the 1/11/08 issue of the Marshall Islands Journal Airlines Ready to Fill in for AMI Three private airlines are interested in providing service in the Marshall Islands, the Marshall Islands Chamber of Commerce was told Tuesday at the Marshall Islands Resort. But none can come in without the approval of the government. And Air Marshall Islands’ situation only complicates matters, with no quick fix in sight for its two grounded aircraft. The current limbo of domestic air services prompted the Chamber to agree that it will await the appointment of the new Minister of Transportation and invite the new Minister to the next meeting to discuss possible options available to improve domestic air service. Two weeks ago, the Cabinet approved a $1 million guarantee for AMI to seek a bank loan to resolve problems with both planes — but with a new government just taking over, the earlier government guarantee will have to be reviewed. Ben Chutaro questioned putting further money into AMI in its current status because the airline should be privatized, otherwise continuing to inject money is a waste of resources. Jerry Kramer said that Island Air, Cape Air and Freedom Air all have expressed interest in servicing the domestic market. “The government has to say ‘we’re out of the airline business’ to get a private airline in,” Kramer said. Bikini Atoll Dive chief Jack Niedenthal said that the lack of AMI service is about to start costing the Bikinians large sums of money. “By the end of this week, I’ll have to cancel February’s dive schedule,” he said. “That will cost us about $60,000 in refunds.” RMI Losing $8 million a Year The Marshall Islands could be collecting $8 million to $10 million more in local revenues every year if it enforced tax laws already on the books. That’s the conclusion of Ministry of Finance and International Monetary Fund (IMF) officials. IMF official Raphael W.K. Lam estimates that 30-to-40 percent of available tax money is not being collected. “The potential loss (of revenue) is huge,” he said in a presentation to RMI government officials last month in Majuro. He said there is a need to step-up tax compliance so tax collection is fair. But he also said that there are policies in the current system that need to be fixed, including such problems as the gross revenue tax being an unfair tax that favors low-turnover, high-profit businesses. He also pointed out that the duplication of tax collection and auditing by both national and local governments needs to be changed and simplified. Lam commented on the unfairness of the present tax non-compliance level, the income and gross revenue taxes, and taxes withheld at the employer level but never filed or paid. “Some tax policies contain inequities and distort incentives,” he said. “Import duties encounter difficulties in classification and valuation, GRT on revenue instead of net profit favors the business with a low turnover but a high profit margin, income tax is neither progressive nor regressive, and the deductible allowances are not applicable to every employee.” Lam said that because of the weaknesses in the tax system there are a number of things that the government should keep in mind when designing tax reform. He recognized that the government, “especially the customs, tax and revenue division, has undertaken some key steps in improving the tax system. To extend and multiply their positive efforts, we think there are certain key principles to follow in designing the future tax system.” These boil down to simplicity and fairness, with the recommendation for one tax schedule, one collection authority, and simple but effective audit. Four specific recommendations were offered by Lam: • Continue the improvements in tax administration, which is the key to the proposed tax reform (especially on the non-compliance issue and duplicate efforts across revenue collection agencies). • Involve key stakeholders for an open discussion of tax issues, addressing the major concerns and difficulties. Keep it transparent and circulate proposals among everyone involved. • Harmonize tax collection by eliminating duplicate and dual efforts at the national and local levels, establish a sound and easy-to-manage sharing system to avoid arrears, develop effective auditing and collection, and enhance cooperation in compliance. Solve the tax debt that is owed between the national and local governments. • Penalize repeated cases of non-compliance. Concentrate efforts on tracing the repeated and severe cases. This can be done by establishing and communicating to the public and business that the authorities are taking serious efforts to get businesses paying their required taxes. Share and learn from the success stories in MISSA. Show strong determination that the authorities are active for tax reform. From the 12/28/07 issue of the Marshall Islands Journal Will JAL Stick with the RMI? By GIFF JOHNSON Two Japan Airlines flights this month is good news for local hotels and businesses, and it brings to six the number of charters this year. But after a hiccup-filled 2007, is JAL going to halt its charter service in 2008? That question is being asked by some people involved, and last month’s charter that had only 100 passengers — half the number of previous charters — is fueling concern. Marshall Islands Resort general manager Bill Weza, who describes himself as “Mr. Optimistic,” told the Journal that “no one has given up on it.” But the latest “hiccup” to hit the still tenuous JAL-Marshall Islands relationship was a Ports Authority billing for landing fees that none of the tourism-related people wants to talk about publicly — but which was serious enough to spark a meeting with President Kessai Note late last week over concern that it could have a negative affect on JAL. Both the November flight and the group that arrived last Friday were smaller than the three previous charters earlier in the year — only about 100 full-paying passengers. Weza said that the Marshall Islands Resort used last week’s flight as a familiarization opportunity for JAL employees and others in the Japan tourism industry, which means very discounted rates for hotel accommodations. The lower revenue is a trade off with promotion: it gets more people involved from the Japan side clued into what the RMI can offer visitors. But this weekend’s flight that will be over the New Year’s holiday is “solid” with passengers, Weza said. Meanwhile, JAL has not scheduled any flights in January or February, with the first for 2008 now set for March 4-8. JAL sent a group to Majuro last month to evaluate the destination and to make recommendations about the airline’s long-term plans for Majuro. What many people may not realize is the extent to which dive and tourism entrepreneur Satoshi Yoshii is going to make the JAL charters a long-term reality. For any flight that is not filled, Yoshii covers JAL’s costs out of his own pocket. Local operations, including Yoshii, are also working hard to meet JAL needs. Weza said that JAL had asked Yoshii for upgrades on the dive boats and better-trained staff — both of which have been done. Weza said that it is always a challenge getting a major airline like JAL into a new destination. “The stakeholders (hotels, restaurants, visitors authority) are trying like hell to make it work,” Weza said, adding that support from government is also key to its success.
Taking Care of our Heavy Metals Majuro’s dump is ready to export its first shipment of scrap steel, reports Roger Cooper, general manager of Majuro Atoll Waste Company. “17.5 tons of scrap steel from the dump has been packed up into a container and is ready to depart Majuro come January 8,” said Cooper. An additional 60 tons, or three containers full of scrap steel, is expected to be packed up before the shipment date and sent to South Korea via an Australian company. According to Cooper, MAWC may just break even on the cost of exporting the scrap steels off island. “We expect these exports will have a minimum break even with a possibility of a little profit,” he said. Most of the scrap steel slated for export is from the dump but once that area has been cleared of scrap steel Cooper says they plan on targeting Majuro’s coast line. Cooper also reports that MAWC is in the process of negotiation with an off-island company to export a 20 foot container of car batteries. While the plans to export recyclable waste off Majuro is positive news, Cooper admits that the plan’s execution is heavily dependent on MAWC’s ability to get some funding for “desperately needed metal cutting and compacting equipment.” From the 12/21/07 issue of the Marshall Islands Journal We’re Watching the Fiber Optic Cable We have been reading about (and reporting on) the fact of substantial downsizing of the Kwajalein missile range operation, with more Americans (and a few Marshallese) leaving to Huntsville, Alabama as work of the range is “outsourced” to the US. The fiber optic submarine cable that is supposed to be in place by 2009 will further reduce the US presence at Kwajalein, allowing more of the missile work to be done from the US. The point here is that what we’re watching happening at Kwajalein has a direct negative financial impact on the RMI, as fewer Marshallese will be employed by a reduced US presence, and fewer Americans means fewer tax dollars going to the RMI government. So why are we participating in our own demise? First and foremost, under what provision of the Compact can the US government simply decide to run a cable through the RMI’s 200 mile exclusive economic zone? Here’s the current situation: the US government is going to install the cable to Kwajalein to improve communications there and reduce US presence there, reducing revenue to RMI. If RMI wants this cable that will revolutionize communications for Ebeye and Majuro, we’ll have to pay about $15 million, which will force the National Telecommunications Authority into further debt to the US. Isn’t there something wrong with that picture? We’d be the last to begrudge the US government improved communications. But if it wants to plug into a cable that is going to mean a long-term economic decline for the RMI, then we should at least get some benefit from the cable. Our simple suggestion is a trade. The US can have its cable, provided it delivers a branch to Majuro and Ebeye at no charge.
Ebeye Inflation up 6% Ebeye’s inflation rate grew at about one percent more than Majuro for fiscal year 2007, according to the latest consumer price index report issued by the government’s Economic Policy, Planning and Statistics Office. The EPPSO report said that Majuro’s inflation rate grew slightly over one percent for the last quarter of 2007 (July-September), giving Majuro a 5.3 percent inflation increase for the whole year. On Ebeye, prices rose by about 1.7 percent this past quarter, giving Ebeye an annual inflation increase of 6.14 percent, EPPSO said. Main features in the price increases during this last quarter for Majuro were price hikes in food, utilities (though lower than the third quarter) and fuel, which jumped from $4.45 a gallon to $4.75. For Ebeye, the main increases were in the housing/utilities/major appliances group, clothing and fuel. Food prices did not change significantly. For both Majuro and Ebeye, no price increases were noted for alcohol. Ebeye is still a more expensive place to live than Majuro, but the gap between the two is lower than a year ago. The government’s planning office has an 18-item “basket” for which it collects prices every quarter. The basket includes such staple foods as rice, flour, a variety of canned meats, sugar, ramen, soy sauce, kerosene stoves/lamps, kerosene, gas, cigarettes and mosquito coils. That basket cost $126.40 on Majuro in October 2006 and $154.70 on Ebeye. The percentage different was 22.4. The quarter ending September 2007, the same basket cost $130.60 in Majuro and $157.97 in Ebeye. The percentage difference between Majuro and Ebeye shrank slightly to 20.9 percent. From the 11/30/07 issue of the Marshall Islands Journal Imata Kabua Looks to China By GIFF JOHNSON Although the postal absentee votes are still to be counted, AKA party leader and former President Imata Kabua told the Journal late last week that former UDP Speaker Litokwa Tomeing will be the next President of the Marshall Islands, and once in power in January the new government plans to recognize China, ending a nine-year relationship with Taiwan. Kabua was President when the Marshall Islands switched diplomatic ties from China to Taiwan in 1998. But despite their earlier support for relations with Taiwan, both he and Tomeing say it’s time to adopt a “one China” policy recognizing the People’s Republic of China. But the decision may not be final. Despite talk from Aelon Kein Ad party leaders of an imminent switch of diplomatic ties from Taiwan to China if they win control of the Nitijela, Kwajalein Senator Tony deBrum told Reuters this week that AKA will continue to support Taiwan if it wins an expected 20 to 22 seats in the 33-member Nitijela and forms a new government. “There has been no change, no China item on our platform,” said deBrum, who describes himself “the architect” of his country’s nine-year-old relationship with Taiwan, Reuters reported. The RMI shifted to Taiwan in late 1998 when deBrum was finance minister under President Imata Kabua’s government. If the Aelon Kein Ad candidates’ leads hold up through the rest of the vote count, President Kessai Note will be out after eight years as President. By law postal absentee ballots from the thousands of Marshall Islanders living abroad cannot be counted until December 4. With many of the races decided by only a handful of votes, no results can be final until after the postal votes are tabulated starting this coming Tuesday. Bruce: ROC is a “True Friend of the RMI” By KAREN EARNSHAW If the Aelon Kein Ad party takes power in the Marshall Islands, according to Iroij Imata Kabua, it will recognize the People’s Republic of China, putting the country’s nine-year diplomatic relationship with the Republic of China (Taiwan) at serious risk. Responding to this possibility, the ROC Ambassador to RMI, Bruce Linghu, told the Journal this week that “of course this kind of news may sabotage our relationship with RMI, and this is of grave concern to us.” But Linghu emphasized that the ROC works with the elected government of each country it recognizes. Reaffirming ROC’s commitment to the people of the Marshall Islands, Linghu said: “There are many ways people here can feel we are a true friend. For nine years, I believe he have a given good help. “In that time we have done three or four hundred projects. I believe the people can see the goodwill and value of this help and also that our relationship is based on mutual respect.” On why mainland China is so eager for their ‘One China’ policy to become a reality, Linghu said: “It’s a doctrine; a dogmatic thing to the leaders. No-one can soften their attitude to Taiwan. It’s a national chauvinism. “The so-called One China policy is a myth.” In October, Taiwan celebrated its 96th anniversary of sovereignty. “Taiwan has prospered since the 1940s. It has become a modernized, democratic country enjoying freedom of speech and human rights.” In contrast, Linghu said that mainland China “has a big gap between the rich and poor. And maybe they should be spending more money on solving their over problems, including the living standards of their people ... rather than spending money making missiles that are pointed at Taiwan.” On China’s desire for the reunification of Taiwan: “China says that it wants one country with two systems, but Taiwan is not Hong Kong or Macau. They were colonies, we have our own constitution, sovereignty and military.” The Taiwanese government is planning on holding a referendum next year asking the people if they are behind having a seat in the United Nations. “We think it’s not justifiable that our 23 million people have had no representation at the UN since 1971,” Linghu said. “It’s really inconvenient to not be in the UN as it’s such an important organization. The referendum is to show the world that our people want international status. We want to be a contributing member of the international society.” Speaking on the history of China and Taiwan in the Marshalls, Linghu pointed out that it was Imata Kabua’s government that recognized the Republic of China in 1998. “At that point the Chinese walked out,” Linghu said. “They walked away from the Marshalls.” When asked if the AKA party wins the national election and chooses to support mainland China, will Taiwan walk away from the RMI table, Linghu stressed he wasn’t going to answer a hypothetical question of this nature. Instead, the Ambassador said: “We used to be good friends with AKA. “There’s no-one in government that we can’t work with. And we have always been appreciative of RMI’s efforts internationally.” From the 11/16/07 issue of the Marshall Islands Journal Bruce Bilimon: Together We Can Do It Ministry of Finance’s Customs and Revenue chief Bruce Bilimon wants to level the playing field for all businesses in Marshall Islands. And the way he wants to make it happen is through direct approaches with the head of each business to gain their cooperation. “Consultation is the way to go,” Bilimon told the Journal. “I want each manager to personally understand the process.” Since pushing a new import policy into place last month, Bilimon said that he’s met with the managers of most businesses here to explain the plan. Bilimon said he explains the conditions. “If you play by the rules, everything is okay,” he said. “If you break the rules, here’s the policy we follow.” Bilimon said the Custom’s office ranks businesses as low, medium or high risk, with a preference on speedy processing of imports given to the low risk group. “The treatment Customs provides is based on the data that they provide,” Bilimon said. Bilimon said when businesses send their lower level staff, he’s told them to have their top managers come by because “I want to meet face-to-face with the manager of each company so they understand the process. “If their company breaks the rules, that means (their next shipment will get) inspections. If they break the rules, they lose privileges.” The goal of this is to “level the playing field for businesses,” he said. “It’s not our intention to penalize businesses.” The message that Bilimon stressed he wanted get across to businesses is that “if they follow the rules, it’s good. If they do things illegally, there will be a penalty. “Some people say that it is impossible (to get businesses to cooperate). No, it’s not. It’s just because no one has tried. If I can get it to 80 percent (compliance) that’s great. The next guy can bring it to 100.” Will We Lose Guam Job Boom Opportunities? Opportunities for Marshallese workers may disappear with the plan of the US Congress to make it easier for Filipinos and other non-US citizens to get temporary work visas to work on Guam, the head of the Marshall Islands Chamber of Commerce said this week. Responding to a report in Pacific Daily News last week, Chamber President Jack Niedenthal said the opportunities for islanders from the freely associated states promoted by US officials at a big conference on Guam last month may not materialize. A US House of Representatives committee last week voted to exempt Guam and Saipan from the limit on “H-2” visas. Guam officials welcomed the development because Guam does not have the labor to support the estimated 15,000-20,000 extra workers needed for the upcoming construction boom for US military expansion there. The US limited H-2 work visas to just 66,000 nationwide, with Guam getting only 1,400 this year. The advantage that Marshallese and other freely associated state citizens have is they do not require work permits to enter Guam and the US. “If they loosen the visa restrictions it will limit the availability of FAS citizens to get better jobs on Guam,” Niedenthal said. He also expressed concern over the fairness of this proposed easing of the law in regards Guam and Saipan while Marshall Islands employers “have all these problems getting Philippine workers here. It seems unfair.” From the 11/2/07 issue of the Marshall Islands Journal Dash-8 Landing Gear Corroded Air Marshall Islands kept its two month run of bad luck unbroken this week, when mechanics discovered additional problems with the Dash-8 that mean it is not going to get back in the air anytime soon. Although the Dash-8 has been grounded since October 10, it wasn’t until Wednesday this week that mechanics found additional problems — corrosion — in the landing gear of the plane, which means the entire landing gear, not just some parts, need to be replaced. AMI general manager Dan Fitzpatrick called said it will result in a huge replacement cost and much more down time for the Dash. “It should have been known in the first few days after the plane was first grounded, not three weeks later,” he said. But this followed the equally “devastating news” that Fitzpatrick received earlier on Wednesday this week that a key part for the Dash that just arrived is the wrong one. Because of these new problems, AMI has changed its plan of action from attempting to get the Dash in the air first to getting the Dornier fixed. All the parts needed to fix the Dornier are here, and it could be in the air in as few as 10 days if “we get all hands on deck,” Fitzpatrick said. All of the mechanical woes have been complicated by the move from the old hangar and airport office area out to the lagoon side hangar, Fitzpatrick said. The computer that housed the parts inventory for the airline blew up when it was plugged in at the hangar, he said — just one of the problems they’ve faced. “I can’t believe our run of bad luck,” he said, adding that AMI’s woes since August have resulted in essentially two months of no revenue for the airline. EU Okays RMI Fish Exports A big breakthrough in talks with the European Union (EU) will pave the way for fish exports from the Marshall Islands for the first time. R&D Minister John Silk told the Journal Saturday that the opening of the EU market to the Marshall Islands and other small islands in the region promises a big economic boost for the islands. Up until last month, the EU — which represents 27 European countries — had set fish export regulations that prevented most Pacific islands from any possibility of ever exporting the one big resource available for export: fish. This is because the EU was demanding that for fish to be exported into the EU it had to meet “rules of origin” that included that 50 percent island ownership of the fishing boats and a 50 percent local crew. Silk said for the Marshall Islands and other small islands, this requirement prevented any possibility of exports to EU countries, despite the fact that fish handled and processed in Majuro is now being exported to the US and Japan. Marshall Islands Fishing Venture, which handles the export of sashimi-grade tuna from Majuro to the US and Japan, has for several years been keen to gain access to the big EU market. Last month, the EU negotiators changed their position, and dropped the requirement of 50 percent ownership and crew. “We’ve been negotiating with them for three years on this,” Silk said. “It’s a big breakthrough.” An agreement is expected to be signed next month that will open the EU doors to fish exports from the RMI and other islands. Silk said it has the potential for increasing employment to Marshall Islanders as the demand for fish transshipped out of Majuro will grow tremendously with the opening of the EU market. From the 10/26/07 issue of the Marshall Islands Journal Bishop Gives us a Jump on the Guam Jobs By GIFF JOHNSON US Ambassador Clyde Bishop wants Marshall Islanders to cash in on the economic boom that is about to strike Guam in the form of a $14 billion military expansion. “There is a need for a considerable amount of labor on Guam,” Bishop said to Finance Minister Brenson Wase last week during a Compact funding presentation. “I’d like to see the Compact states get the benefit.” There is an urgent need to get Marshallese trained so they have marketable skills in construction-related trades, he said. An estimated 15,000 workers will be needed over the next several years, and Guam does not have the population to provide this number of new workers, Bishop said. There is still time for Marshallese to take advantage of the opportunity, because the US military is now in the planning stages for relocating the 8,000 US Marines and their families from Okinawa to Guam. Bishop indicated the construction boom on Guam will kick in in about two years. Bishop attended the Department of Interior-sponsored Business Opportunities in the Islands conference held earlier this month on Guam, where he, along with the other attendees from the Marshall Islands including R&D Minister John Silk representing the national government, received an update on Guam military developments. Wase noted that Pacific International Inc. already had skilled workers who had worked on a variety of construction projects with PII on Guam. For non-skilled Marshallese, “we may need to restructure our vocational program,” he said, adding that the US-based Job Corps program has produced very highly skilled Marshallese graduates. Islanders from the RMI, Federated States of Micronesia and Palau have one big advantage over non-US laborers recruited from such places as the Philippines — they don’t need visas to enter Guam to work. “Bishop said this should make workers from the freely associated state nations “attractive to the contractors.” He also said that there is a push to get contractors to agree to designate a certain number of the estimated 15,000 new jobs for workers from the three island nations, Bishop said. “I’d like to see people (in the RMI) who are now sitting around looking at the ocean get trained and skilled so they can get jobs (in Guam),” he said. Construction companies and other firms that will be hired to develop Guam for the US military will likely try to recruit most of their labor from the Philippines, and may be seeking to increase the US quota for temporary visas for workers. But getting a visa in the Philippines now takes as much as six-to-eight months of lead time because of more stringent security precautions in effect — making recruitment of labor from RMI, FSM and Palau all the more attractive. Guamanians will get first priority for jobs, “but there are no where near the numbers needed for this project on Guam,” Bishop said. “There are still two years until the construction begins, so there’s time to train people,” Bishop said. “We need to increase awareness of the opportunity and then move to training. If we have the skill levels (in the RMI) I can’t see contractors not getting their labor from here.”
Internet for 3 Cents a Minute The National Telecommunications Authority is set to slash its Internet prices starting next Friday. NTA general manager Tony Muller told the Marshall Islands Chamber of Commerce in an email that beginning on November 2 through the end of February, NTA will greatly reduce Internet rates. “We’re doing the four month trial to see if the business volume and individual subscriber base increases as a result,” Muller told the Journal this week. He noted also that NTA was the only utility that has consistently reduced its prices to the public. NTA’s significant debt, with the possibility of additional debt for the new fiber optic cable, makes it extremely difficult for NTA to discuss changing prices, Muller said. During this trial period, regular dialup Internet, which now costs customers $3.60 per hour (or six cents a minute), will be cut by 50 percent to $1.80 per hour or three cents a minute Business rates for various speeds of Internet connection will also decline sharply. Muller said the following rates will apply for the different levels of business service: • 64kbps line will drop from $800 to $600/month. • 128kbps line will drop from $2,000 to $1,100/month. • 256kbps line will drop from $3,000 to $2,100/month. • 384kbps line will drop from $4,000 to $3,000/month. • 512kbps line will drop from $5,000 to $4,000/month. The NTA wireless system will not change from the current 10 cents a minute ($6/hour) charge. Wireless service is now available in the Marshall Islands Resort area, at NTA, RRE and its Shoreline area, Payless and Long Island Hotel area. Compared to Internet dial up service, which runs at a 56K pace, the wireless service operates at a speedier 512K pace. From the 10/19/07 issue of the Marshall Islands Journal Air Tugaru Rescues Stranded Divers By GIFF JOHNSON For the second time in as many months, scuba divers are being evacuated from Bikini Atoll, following the grounding of all of the national airline’s planes. The Bikini Atoll Dive program chartered an Air Tugaru Casa aircraft from neighboring Kiribati to get the eight divers off Bikini and back to Majuro. But lest you think a successful evacuation with an off-island air carrier is a foregone conclusion, think again. Air Tugaru flew from Majuro to Kwajalein early Tuesday, and — like Air Marshall Islands Dash-8 a week ago Wednesday — suffered a mechanical problem while on the ground at Kwajalein and was forced to abort the flight to Bikini and return to Tarawa, Kiribati for repairs. The Air Tugaru flight returned on Wednesday to collect the divers and got them to Majuro by early afternoon. But there is no indication when AMI will get its planes back in the air. The Bikini dive program has already cancelled the scuba dive group that was scheduled to fly to Bikini next week Wednesday because of the uncertainty about AMI service, said Bikini official Jack Niedenthal. Not everyone, however, was anxious to get off Bikini, according to Niedenthal and Bikini Atoll Dive manager Lani Kramer. Two divers from The Netherlands were enjoying their diving at the northern atoll so much that — despite the uncertainty over service by AMI and now Air Tugaru — they extended for another week. The fleet of World War II US and Japanese naval vessels on the lagoon floor has drawn thousands of divers to Bikini over the past 11 years. Niedenthal estimates the latest airline disruption will cost the Bikinians $50,000 in refunds to disgruntled divers — some of whom have come from as far away as Europe to dive on the World War II fleet of sunken naval vessels at this former nuclear test site. Coupled with the $100,000 that the dive program lost through cancellations and refunds following a halt to air service in August, the airline woes have cost the Bikinians nearly their entire anticipated profit for 2007, money that is used to support the islanders who 60 years after the first nuclear tests are still living in exile. “We were completely sold out from August to November,” said Niedenthal. Since the August stranding of divers at Bikini, there have been 27 cancellations of fully paid reservations and other divers who couldn’t get to Bikini had to be reimbursed, he said. “Although we have no control over the problem, it’s really hurting our reputation,” said Niedenthal. Both AMI planes were grounded with engine problems for three weeks in August and September, and have been down again since last Wednesday, October 10. In late August, the government was forced to dispatch its marine surveillance patrol boat to Bikini to bring back a group of visitors from Australia, Canada and Europe — a 36-hour trip over the open ocean. But Kramer said that the earlier group of evacuees actually enjoyed the extended boat ride back from Bikini on Lomor. “They said they loved the trip on the patrol boat,” she said. From the 10/12/07 issue of the Marshall Islands Journal ROC Spends Big on Majuro Summit By GIFF JOHNSON Taiwan is sparing no expense to ensure a successful second Taiwan Pacific Allies Summit this weekend in Majuro — and Marshall Islanders have been out in force beautifying Majuro for this weekend’s influx of international summit representatives. With the exception of Palau President Tommy Remengesau, Jr. and his delegation, everyone is being flown in by Taiwan government-chartered planes. Taiwan is chartering a Jetcorp Australia plane to fly in heads of state and their delegations from Nauru, Solomon Islands, Kiribati and Tuvalu on Thursday, bringing President Chen and an entourage or more than 120 on a China Airlines chartered airbus 340 on Friday, and then chartering a Continental Airlines plane to fly the presidents and prime ministers to the annual Pacific Islands Forum leaders meeting in Tonga that begins immediately following the three-day summit in Majuro this weekend. Palau’s delegation arrived on Continental’s regular flight Wednesday. It’s not only been a logistical challenge to get the delegations from five scattered island countries to Majuro, which is not on any air route from south of the equator. In addition, because of its small tourist base and few hotels, Majuro has proved a logistical challenge to organizers handling local arrangements because of the large number of summit attendees, media covering the event and security and other support staff. The visiting island delegations range in size from six to nine. The $5 million International Conference Center funded by Taiwan will be officially opened Friday morning to host the meetings. The magnificent meeting facility is a showcase addition to Majuro and while there may be a few construction details to complete in the weeks to come, Pacific International Inc.’s Herculean effort has produced a spectacular meeting venue in just seven months’ time. “We’re creating a Majuro miracle,” said Majuro-based Taiwan Ambassador Bruce J.D. Linghu. The last time the Marshall Islands hosted a similar, though bigger, regional event — the Pacific Islands Forum in 1996 — it had accommodation help from an Australian naval vessel that anchored in Majuro’s lagoon. This time, every hotel room at the Marshall Islands Resort, Long Island and Robert Reimers is booked out, with some of Taiwan’s advance staff having to double up or stay in ROC Embassy staff quarters. For organizers, the summit has come down to solving three transportation issues, which Linghu calls the “three dimensional challenge”: • Air transportation to get the delegations to and from Majuro. • Vehicles to move the VIPs and their delegations from airport to hotels to the conference center and to other events. • Boats for Sunday’s leaders fishing tournament — the latter, no doubt, the most easily solved. “Through good coordination we’ve gradually solved all the logistics,” said Linghu. Meanwhile, RMI government workers and many local residents have been hustling a big cleanup in preparation for the arrival of the many foreign dignitaries and the international media contingent. From the 9/28/07 issue of the Marshall Islands Journal Engine Checkup Rules Airline's Activity The Dornier operated by Air Marshall Islands is expected to be back in the air by this weekend, following the return of an overhauled engine from the US. Air Marshall Islands Dornier is the primary plane for servicing smaller runways throughout the country. It has been grounded since August 18, or more than five weeks, as mechanics have worked to find problems with one engine that caused the plane to be grounded. Transportation Minister and AMI board chairman Mike Konelios had told the Nitijela late last week that the Dornier was expected back in service on Wednesday this week, but a string of “hiccups,” unrelated to the Dornier’s engine, have delayed service until this weekend at the earliest. AMI general manager Dan Fitzpatrick told the Journal that the airline paid off a bill for a spare engine that was overhauled recently in Los Angeles, and that engine is in the process of being installed but because of an engine problem on the Dash-8, which caused the cancellation of flights on Monday, AMI mechanics were pulled off the Dornier to work on the Dash-8 to make it serviceable again. Following that, AMI’s mechanics were again unable to continue installing the Dornier’s engine on Tuesday because the portable generator AMI uses to operate at the new Airport hangar burnt up. In the next few days, two components from the engine on the plane that reportedly shut down during a flight on August 18 are to be sent off to the Los Angeles factory to be checked. Despite extensive tests by AMI mechanics since August 18, “all our ground tests have been negative for everything (the manufacturer) asked us to do,” he said. But to get the engine back in service, the airline has to have the manufacturer run tests on these two parts, which are expected to cost up to $15,000 each. AMI’s plan is to get these parts back after testing, fix the engine, and then reinstall it to replace the other engine that will soon be due for its regularly scheduled overhaul at the LA facility. This should minimize “down time” for the Dornier, he said. JAL Visit helps up Tourism numbers to 4,000 in 2007 In the first six months of 2007, nearly 4,000 people visited the Marshall Islands, according to data collected by the Marshall Islands Visitors Authority. This is a 55 percent rise on the same period in 2006 and is mainly a result of three Japan Airlines charter flights. The 3,842 visitors do not include yacht or fishing vessel skippers and their crew. Of this figure, 1,182 of the visitors are considered to be ‘true’ tourists (as opposed to business-related visitors), compared to 527 last year. The MIVA data shows an increase in the number of holiday visitors from Australia, Korea and Taiwan, but this trend will change in the second half of the year due to the discontinuation of Our Airlines flights. The MIVA statement continued: “On the bright side, the total number of Japanese travelers for the first two quarters of 2007 has already exceeded the amount for all of 2006 and JAL has scheduled another three charter flights before the end of the year with an anticipated 200 passengers for each flight.” The average length of stay for the holiday visitor was approximately five days with an estimated daily expenditure of $150. MIVA said this equates to “about $775,000 being injected into the local economy during the period.” From the 9/21/07 issue of the Marshall Islands Journal Allotments Don't Leave a Lot in Your Paycheck Can you imagine a paycheck in Majuro that doesn’t have money deducted for one or more allotments? Life in the RMI is generally one big allotment, particularly for government workers. On average, national government employees receive only 25 percent of their biweekly pay. That’s because the other 75 percent of the total $1.2 million biweekly RMI payroll bill is paid directly by the Ministry of Finance to banks, utilities and private businesses. But in the private sector not all companies provide allotment service to their employees. When Payless took over from Gibson’s more than two years ago, it stopped letting employees do allotments except to banks largely because it was a headache for the accounting staff. “It was a lot of work for our accounting staff,” said Payless general manager Jason Burgess. “That’s why we scrapped it when we took over and only deal with the banks.” Burgess said that the deductions required by the banks are “never too excessive,” so “we have no issues” with employee allotments to the banks. Another private business views allotments as a service to its workers. Momotaro Corporation’s Dennis Momotaro says “it’s a service we provide for our staff to make it more convenient for them.” Momotaro acknowledges that allotments create more work for the company and that he would rather give employees their full pay. But Momotaro’s decided to offer allotment services as a benefit for its employees. “It helps our employees,” he said. “For employees it’s harder for them to get around in a taxi to pay bills or go to the bank — this systems helps with their time. With allotments you have one check that covers the payments of 10, 20 or more people. Can you imagine the lines at the utility companies or the banks if everyone had to go make payments?” Pacific Basin Wholesale’s Michelle Stanley-Chutaro said, however, her company stopped allowing allotments last year because it came to the point where it began to “cross the line between parenting and being an employer.” She said she “chose not to be a parent.” Now time is saved on preparing payroll and she’s happy that Pacific Basin’s employees are managing their own finances. Maji and Map Vision stores have a slightly different policy on employees need for loans. Because of a high rate of staff turnover, Maji and Map Vision’s Leander Leander says his companies do not offer allotments. Instead they will offer advances on pay but only up to three weeks. Ace Hardware allows employees to have allotments and doesn’t limit how much an employee’s paycheck is applied to allotment. But manager Yuichi Yamaguchi says as a rule of thumb he makes sure that employees at least have $10 in their pay check at the end of a pay period so that employees can at least taxi to work the following week. Yamaguchi sees the allotment system as a way to help employees with their big purchases. “If they ask for an allotment and it’s possible we’ll allow it,” he said. Grant Labaun of G&L Enterprises said that, like Payless, he limits employee allotments to the banks. But he expressed concern about employees who allot out their paychecks to the point where they have only a few dollars — or pennies — in a paycheck. “How can you live with only $10 net pay?” Labaun asked.
Peleliu Visit Nets RMI $1.5 milion Worth of Smiles The 10-day humanitarian assistance visit of the USS Peleliu injected an estimated $1.5 million into the local economy, according to US and RMI officials. Navy statistics tell an impressive story of both economic and non-economic benefits for RMI’s approximately 52,000 residents, the US Embassy said in a release. US Navy doctors and medics, NGO volunteers and foreign medical staff performed 65 surgeries, provided dental treatment for 288 adults and 297 children, distributed 2,098 prescription eyeglasses, and treated more than 5,000 individual patients. The grand total of 20,470 medical services provided to the RMI included primary care, pediatric care, immunizations and prescriptions, the Embassy said. Navy SeeBee engineers completed a variety of construction and renovation projects. While the value of labor and transportation has not been calculated, the cost of construction materials alone totaled more than $162,000. Seven projects were completed on Majuro. On the outer atolls, the engineers installed nine solar panel systems at outer island health clinics. The systems include medical refrigeration units, AM transmitting radios, and lights. The nine include one on Mili Atoll, four on Maloelap Atoll, one on Aur Atoll, and three on Arno Atoll. The particular atolls were selected because they are all located within helicopter range of Majuro. While in Majuro, the Navy purchased port logistic services, including waste and garbage removal, local security support, cell phones and communications services, piloting fees, rental of vehicles and other equipment, and a variety of other services. The Navy calculates that a total of $600,225 was infused directly into the RMI economy, and another $300,000 worth of medical and construction materials was expended during the mission, the Embassy said. Significantly, these numbers do not include the pocket money that the ship’s company, some 1,600 people in all, spent at local businesses during their six days of shore leave. The Marshall Islands Visitor Authority has estimated a total, based on responses from only half of the businesses queried, of over $400,000. Capping off the visit on September 5, Project Handclasp donated 30 pallets of new clothing, medical supplies, toys, and schoolbooks. These were distributed to three RMI nonprofit organizations: RMI chapter of the Salvation Army, KIO Club and Marshall Island Council of NGOs. From the 9/14/07 issue of the Marshall Islands Journal Marshall Islands Chamber of Commerce Airs Concerns About Telecommunications in the RMI Chamber of Commerce members said they want telecommunications service that is quicker, less expensive, and more reliable. They also expressed the urgent need to extend Internet access to public and private school students from kindergarten to 12th grade. Senator Tomaki Juda Calls for NTA Competition By GIFF JOHNSON From the 9/7/07 issue of the Marshall Islands Journal Companies Hit Hard by Internet Woes By GIFF JOHNSON Government, business and private customers using NTA’s Internet and email system have been beset with a variety of difficulties since the company’s Internet server suffered a major problem at the end of July. But since August 23, virtually all emails containing attached documents either could not be sent or took days — instead of seconds or minutes — to arrive at their destination. This sparked numerous complaints to NTA, and Marshall Islands Chamber of Commerce president Jack Niedenthal said in a letter this week to Transportation and Communications Minister Mike Konelios “I have never received so many phone calls and complaints about the Internet and cell phone systems here in the RMI (during the past month).” The problem since at least August 23: NTA’s service became embedded in an Internet zone used heavily by spammers, which all Internet services globally filter out to protect their customers from the unwanted email. “The bottom line is that Internet Protocol (IP) addresses on which our mail server and gateways now reside is being blocked by many servers,” Muller said last Friday. “The end result is that NTA customers, especially the ones with attachments will be rejected by most Internet mail gateways.” On Monday, NTA general manager Tony Muller in an email for Chamber of Commerce members said “we are currently approximately 90-95 percent back to full capacity.” On Wednesday, further improvements were made but “.mil” — US Defense Department — addresses and a few others were still a problem and stuck in NTA’s server because they were still being rejected by the recipient Internet servers. NTA last week began changing its IP address, to avoid the spam rejection problem, but the process to change it and, more importantly, to get it recognized by Internet servers worldwide could take up to three weeks, Muller said Friday. Muller noted that NTA information technology staff had been working late nights to fix the problems, and Niedenthal told Konelios that “we very much appreciate these efforts,” though he added that “these glitches and problems have had an enormous impact on the business community.” Niedenthal also told Konelios that the Chamber is sponsoring a forum on telecommunications at next Tuesday’s business meeting at Marshall Islands Resort, in part to offer “ideas for making telecommunications better in the RMI, including the allowance of private sector competition with NTA.” He added that NTA’s Internet prices are “by far the highest in the Pacific” and the “business community would like to see this change as soon as possible.” Money Mover Opens The Western Union Company is expanding its services in the Marshall Islands with the signing of an agreement with the Marshall Islands Postal Service, the company announced late last week. “The partnership will further enhance our coverage in the Marshall Islands, connecting the people of the island state to the world and vice versa,” said Chris Cruzado, Western Union’s Pacific Islands director. “Doubling our partners’ location network in the Marshall Islands overnight demonstrates Western Union’s market leadership and our commitment to our customers in the region.” Partnering with Marshall Islands Postal Service adds three locations: in Ebeye, Uliga and Delap. At any of the Marshall Islands Postal Service locations, customers can buy Western Union money orders or send money by Western Union’s wire transfer service. “The Marshall Islands Postal Offices occupy prime locations across the islands, covering major business and tourism districts,” said postmaster Sailass Andrike in a statement issued by Western Union. “Our partnership with Western Union enables us to reintroduce the money order service, which has proven highly popular with our customers in the past, and to benefit more people directly by providing fast, reliable money transfer services conveniently where they live, work and travel,” Western Union’s services have been available in the Marshall Islands for over 10 years, through two existing locations in Ebeye and Uliga operated by agent Robert Reimers. From the 8/31/07 issue of the Marshall Islands Journal Loining Plant Update Construction work at the future loining factory in Majuro is on track to be completed by the end of September, according to company officials. Pan Pacific Foods (RMI) Inc., owner of the under-construction facility, will start testing its equipment next month, according to plant manager Don Xu. That testing is a key step prior to the plant being able to open and, depending on how quickly that moves, will determine when the plant can actually begin processing fish. Xu indicated that that the Marshall Islands Marine Resources Authority (MIMRA) is helping the company in a number of areas to speed the process. He said that the company hoped to begin recruiting local workers next month and then to begin a training process. He is also hopeful that Pan Pacific Foods will be able to hire some of the workers who worked at the loining plant when it was run by PMOP because he expects that they will have a higher level of expertise that will assist the plant in its operations. He reconfirmed earlier promises that the plant will be bringing in expatriates only as supervisory staff, but will hire all other labor locally. He said the company has just signed an agreement with a Philippines-based company to provide six supervisors to oversee equipment and production at the factory, as well as train local workers. He said he was hopeful that this group of supervisors will receive their work permits expeditiously, since the training program — which must be done before the plant can get into operation — depends on their arrival. From the 8/17/07 issue of the Marshall Islands Journal President Note creates Economic Council A new Marshall Islands Economic Development Advisory Council is being established to improve communication and the exchange of recommendations between the business sector and the national government. Last week, President Kessai Note asked the Chamber of Commerce to name two representatives and the Marshall Islands Business Association to nominate one member to the six-member Council. At Tuesday’s Chamber of Commerce meeting it was unanimously agreed that the president and vice president of the Chamber will represent the organization. That will put Chamber head Jack Niedenthal and vice president Hirobo Obeketang on the new Council. In a memo to the two organizations, Note asked them to fast track their nominations. “The sooner (nominations) can be accomplished, the sooner we can begin working together to help find solutions and recommendations to the economic challenges that we all face,” Note said. The Cabinet will appoint two members at large, and the sixth member of the panel is the director of the Economic Policy, Planning and Statistics Office who is Carl Hacker. The President said that the membership of the Council needs “to be able to take into consideration some of the views and ideas from business interests on Ebeye,” Note said. US Postal Service will be returning the RMI to a domestic postal designation As foreshadowed in last week’s state of the nation address by President Kessai Note and confirmed by US Ambassador Clyde Bishop at this week’s Marshall Islands Chamber of Commerce meeting, the US Postal Service will be returning the RMI to a domestic postal designation. USPS official Leo Tudela informed RMI and US officials on a recent visit to Majuro that the US plans “to reinstate domestic status,” Bishop said. But, he added, it will take about two months to actually implement the change. The move by the USPS to give the RMI international postal status has been criticized strongly by businesses here because of its negative impact on the economy. Senator Gerald Zackios, speaking to the Chamber this week, said the return to domestic status is “welcome” but he added a note of caution. “I hope that it doesn’t impact how Compact sector grants are used,” he said, adding his concern is if the US wants to take Compact funding to use to subsidize the USPS for the service here. “I hope that this (USPS service) is above and beyond Compact grants.”
From the 8/10/07 issue of the Marshall Islands Journal NTA Server Crashes An NTA Internet server crash over the weekend produced some high blood pressure for customers who couldn’t get their email over the weekend and required NTA technicians to work overtime to solve the problem. For three days, from Saturday through Monday, customers found it nearly impossible to download email and attachments sent through the NTA system, or to open NTA’s Tilmake web site that serves customers, both locally and when they are off-island. NTA’s Internet system, not noted for speed generally, was down to a snail’s pace before NTA was able to restore services on Tuesday this week. NTA technician Michael Sawej told local customers that files on NTA’s mail server were “corrupted” and “it was much faster to rebuild the server than try to find and recover corrupted files.” On Tuesday, Sawej said that NTA staff started working on the problem over the weekend and were “still tweaking” the system. NTA received numerous complaints from customers, among them local attorney David Strauss, who was in Honolulu when the problem started last weekend. Strauss said it was such a problem that he was forced to open a new “gmail” account to receive email communication through a different server. “I would like to apologize to all of you for the inconvenience and also would like to assure you that we are working hard to bring up mail services back to normal,” Sawej said Tuesday. From the 8/3/07 issue of the Marshall Islands Journal MALGov to Pay MISSA $1 Million In a key ruling in the MISSA lawsuit against Majuro Atoll Local Government, the High Court ruled last week for MISSA, finding that MALGov must pay the social security agency more than $1 million. The ruling orders that this money be paid to MISSA at a nine percent interest rate until paid off. MALGov owes MISSA $1,043,097.26. The suit was originally filed in 2004 against the current MALGov administration, but MISSA returned to court recently to get court help in getting MALGov to pay after MALGov filed motions in the court blaming its lack of ability to pay MISSA taxes on the Ministry of Education, Marshall Islands Resort, Pacific International Inc., and the RMI national government for lack of payment of taxes and other revenues. The ruling by Judge Richard Hickson also orders the Attorney General Posesi Bloomfield to halt his legal representation of the Marshall Islands Resort, and says the Ministry of Education must respond to MALGov allegations that it failed to pay promised education funding to the local government in the 1990s, which resulted in MALGov being unable to pay the social security taxes of teachers then under its authority. He gave the Ministry 20 days to reply. The judge’s ruling gives MALGov a foot in the door to possibly collect funding that was to be provided to the local government pursuant to a 1993 agreement with Education. In response to other motions by MALGov attorney Rosalie Konou, Judge Hickson denied her attempt to remove Marshall Islands Social Security Administration attorney David Strauss from the case. She had requested his removal because he also represents Pacific International Inc. (PII). But Hickson said there was no conflict of interest for Strauss to represent MISSA and PII. He also denied MALGov’s claims against both PII and Marshall Islands Resort that the two companies owe back taxes. Hickson said his dismissal of MALGov’s motion “does not of course prevent MALGov from enforcement of its (tax) ordinance or from referring the matter to the Attorney General for appropriate action.” The judge also directed AG Bloomfield not to continue representing the government-owned MIR hotel. This was because MALGov provided evidence that indicates that MIR may be collecting local government hotel room taxes while maintaining its position that it is exempt from paying the room tax to MALGov and therefore not passing this money onto the local government. “This evidence requires investigation by the Office of the Attorney General as to possible criminal liability,” Hickson said. Because of this, “it is inappropriate for the AG to represent MIR,” Hickson said, adding that Bloomfield could continue to represent the Ministry of Education and its officials. On MALGov’s claim that it is owed fines collected by the national government against fishing vessels using Majuro’s lagoon, Hickson said like MALGov’s claims against PII and MIR, they are not dependent on the outcome of the main claim and so must be dismissed.
From the 7/27/07 issue of the Marshall Islands Journal Subsidies Cost $3.7 million Government subsidies have averaged nearly $3.7 million annually from fiscal years 1997 through 2006. According to an EPPSO report, the lowest amount of annual subsidy given out to “public enterprises” was $2.3 million in FY2004. The high was more than $6.3 million in FY2002. The first three years of the Note administration, from FY2000, annual subsidies jumped significantly from the late 1990s. In FY2000, the government injected $5 million to government entities, in FY2001 it went up to $5.1 million and in FY2002 to $6.3 million. The subsidies dropped off significantly in FY2003, to $3.2 million, in large part because funding to Marshall Islands Development Bank was eliminated, and funding to Majuro Water and Sewer Company and KAJUR, Ebeye’s power company, was reduced dramatically. Subsidies declined to $2.3 million and $2.5 million, respectively, in FY2004 and FY2005, before popping back up to $3.4 million last fiscal year. The FY2006 figure ballooned because MEC was given more than $1 million more than it had received in subsidy in FY2005. Government entities receiving subsidies at some point from 1997 to 2006 were Air Marshall Islands, KAJUR, MWSC, Marshalls Energy Company, Marshall Islands Airports Authority, MIDB, Marshall Islands Ports Authority, Outrigger Marshall Islands Resort and Tobolar. Government Employee Growth There is some eye-opening information contained in the latest statistics provided by the RMI government’s Economic Policy, Planning and Statistics Office (EPPSO). On the government workforce, the report shows that: • The Ministry of Education grew from 472 workers in 1999 to 1,029 this year. • Public Works and Transportation and Communications ministries both increased significantly, though they declined somewhat over the past year. Public Works had 52 workers in 1999 and 91 this year (though it was as high as 115 in 2003), and T&C went from 33 workers in 1999 to 66 this year (though had as many as 108 in 2005). • The Judiciary went from 22 workers in 1999 to 41 this year. • The only two ministries or departments whose number of workers went down from 1999 to 2007 are the Ministry of Resources and Development and Council of Iroij. R&D dropped from 61 to 29 over the period and the Council went from 17 to 15. The R&D drop is accounted for largely by MIMRA staff being separated from the Ministry. The cost of government salaries jumped from $16 million in 1999 to $30 million last year. On average salary levels, the report shows that: • The five highest payment departments or ministries ins government are: Compact II capital $32,153, President and Cabinet $22,979, Public Service Commission $22,667, Foreign Affairs $22,419 and Nitijela $20,590. On cost of living in Majuro, EPPSO reports that: From the 7/20/07 issue of the Marshall Islands Journal New Bank to Open in Majuro By SUZANNE CHUTARO
From the 7/13/07 issue of the Marshall Islands Journal Kiwis to Bump up Trade Visiting New Zealand businesspeople and government leaders promoted trade ties with the Marshall Islands during a two-day visit earlier this week. 300 New RMI Jobs in 2006 By GIFF JOHNSON The Marshall Islands government has increased the number of people working for it by nearly 25 percent since 2004 — and nearly 50 percent since the late 1990s. From the 7/6/07 issue of the Marshall Islands Journal PII’s import tax flight A dispute over the Taiwan-funded convention center has broken out that could jeopardize completion — or quality of completion — of the facility prior to the Taiwan Pacific Allies Summit scheduled for October 12-16 in Majuro. Matson raises prices Matson Navigation Co. announced this week that it will raise its freight rates for the Republic of Palau, Federated States of Micronesia, and the Marshall Islands by $185 per westbound container, effective September 2, 2007, according to a report in the Saipan Tribune. From the 6/29/07 issue of the Marshall Islands Journal New RMI Postal Authority’s board of directors Begins Work The new RMI Postal Authority’s board of directors has launched its orientation and begun an initial review of postal operations. Micronesian Shipping Agency Inc. Going Out of Business A major player on the local shipping scene is closing up shop in a week, saying that there is not enough business in Majuro to sustain the operation. As of July 7, the Delap-based Micronesian Shipping Agency Inc. will no longer function in the Port of Majuro. From the 6/22/07 issue of the Marshall Islands Journal Government Accountability Office Questions Trust Fund Viability By GIFF JOHNSON There is an increasing likelihood that the RMI government’s trust fund will not have enough money in it to distribute the maximum level of funding allowed under the Compact after 2023 and may “be unable to disburse any income” at all in some years, according to a Government Accountability Office (GAO) report issued last Friday. Missa Pays Out $10 million Last year was MISSA’s first since 2000 that benefit payments and administrative costs exceeded tax collections. But the Marshall Islands Social Security Administration’s administrator Saane Aho told the Journal that the agency “does not expect any problems with cash” this year. In fact, she said, collections in 2007 are up and this allowed MISSA to invest $300,000 earlier this month with its US-based fund manager, Investor Solutions Inc. MISSA money matters FY ’02 FY ’04 FY ’06 Tax revenue 9.9 11.4 11.6 Note: Data provided by MISSA From the 6/1/07 issue of the Marshall Islands Journal Business of Politics VIPs to speak at Chamber events in June From the 5/25/07 issue of the Marshall Islands Journal JAL Tug Woes Mount Will Majuro lose the Japan Airlines charter service after just two flights? US Secretary of Interior will visit the Marshall Islands in June The US Secretary of Interior will visit the Marshall Islands in June as part of an island-hop through US-affiliated islands in the region. From the 5/18/07 issue of the Marshall Islands Journal Wilbur Replaces Jorelik A three-way move has RMI government secretaries shifting around, and is giving Internal Affairs its third secretary in four years. $10 part gets AMI in the Air The Dash-8 was down for five days, losing thousands of dollars in revenue for lack of a $10 part, confirming the difficulty of aircraft operations in this remote location. From the 5/11/07 issue of the Marshall Islands Journal General Fund Revenue up for 2007 General Fund revenues are about three percent up for the first seven months of the current fiscal year compared to the same period last year. Mission Imppossible: New News about the JAL Flights By GIFF JOHNSON From the 4/20/07 issue of the Marshall Islands Journal Tony Muller: 'The fiber optic cable is a go' From the 4/13/07 issue of the Marshall Islands Journal Mobil Oil Micronesia Sells Fuel to the Marshalls Energy Company to keep the Lights on Mobil Oil Micronesia has sold fuel to the Marshalls Energy Company for the first time since mid-2005, helping the power company keep the lights on in Majuro until the arrival of an SK Networks tanker this weekend. RMI? Where is that? Compact II postal problems continue to multiply for local customers. From the 4/6/07 issue of the Marshall Islands Journal WASC Gives the Majuro Cooperative School a Big Thumbs Up A visiting accreditation team from the United States gave Majuro Cooperative School a big thumbs up last week. RMI Gov Wrist Slapped by DOI By GIFF JOHNSON Editorials by Giff Johnson Are we going backwards? From the 3/30/07 issue of the Marshall Islands Journal MEC, SK Networks Proposal From the 3/16/07 issue of the Marshall Islands Journal Training a bonus for businesses From the 3/9/07 issue of the Marshall Islands Journal The RMI owes the ADB $1.4 million The Marshall Islands government is seriously delinquent on its loan payments to the Asian Development Bank, with its last payment made on November 20, 2006. The RMI EPA will respond to Delap landowners The RMI EPA said it will respond to Delap landowners who oppose the planned dry-dock after it has had the chance to get legal advice from Attorney General Posesi Bloomfield. From the 3/2/07 issue of the Marshall Islands Journal Which Part of "No" don't you get? MISSA Still Won't Bail Out MEC By GIFF JOHNSON Minister Wase signs Funding Agreement An event of major significance to Marshall Islands non-governmental organizations took place Tuesday this week at the Ministry of Finance. There, Finance Minister Brenson Wase and European Union official Malcolm Ponton signed agreements that will soon provide funding through the Ministry to the Marshall Islands Council of NGOs for a program of developing the capacity of civil society and NGOs in the country. From the 2/23/07 issue of the Marshall Islands Journal MISSA Won't Bail Out MEC By GIFF JOHNSON From the 2/16/07 issue of the Marshall Islands Journal MISSA: The Majuro Atoll Local Government should be in receivership The Majuro Atoll Local Government is in serious risk of going into receivership for failing to pay over $1 million worth of its employees' social security and health fund taxes to the Marshall Islands Social Security Administration. First JAL charter flight arrives The first of what is intended to be a series of special charter flights direct from Japan to the Marshall Islands began this week with the arrival, early Sunday morning, of approximately 200 visitors from Japan. JAL visit businesses Hoping to cash in on the presence of 200 Japanese visitors, local restaurants put on special buffet dinners and live shows to give the tour group something special to do in the evening hours. From the 2/2/07 issue of the Marshall Islands Journal Labor Law Causes Uproar with the Marshall Islands Business Community Marshall Islands businesses are in an uproar over public law 2006-60, a new labor law passed by the Nitijela late last year that has revamped procedures for alien workers. The RMI Attorney General Weighs in on the Labor Law The RMI Attorney General said that Chamber of Commerce criticism of the recently passed Nitijela labor law is “patronizing and extremely offensive” to the Nitijela and the legislative process. The following is a press release from the RMI EPA provided to the Journal on Thursday January 25: High Court Ruling on Drydock A ruling by High Court Judge Richard Hickson on whether or not to order the RMI EPA to hold a further public hearing on the proposed dry-dock plan for Delap is expected to be issued this Friday. Why I Filed Suit over the Drydock: Ben Chutaro The dry-dock is not the focus of this week's court complaint. “It's about the rule of law and due process,” said Ben Chutaro in explaining why he filed a complaint in the High Court about the EPA public hearing process. Mishandled from the start: An Editorial from the Marshall Islands Journal A dry-dock chronology From the 1/26/07 issue of the Marshall Islands Journal Drydock a Go By GIFF JOHNSON Tensions High at Drydock Hearing Tensions were high last Monday as proponents and opponents of the proposed Ching Fu dry dock met in the Nitijela conference room for what many participants referred to as a “rushed” public hearing. From the 1/19/07 issue of the Marshall Islands Journal The Marshallese Business Association (MBA) The Marshallese Business Association (MBA), the newest local business organization in the RMI, will be holding its inaugural meeting this week Thursday (January 18) at 6 pm at the Robert Reimers Enterprises Boknake meeting house in Uliga. US postal rates for the Marshall Islands will jump again this year By GIFF JOHNSON From the 1/12/07 issue of the Marshall Islands Journal Imports Down by a Third A crisis in the economy was touted out for discussion by a local businessman this week as the Chamber of Commerce skirted the need for an election of officers (they decided to keep the current group of officers for another year by acclamation) and concern for the RMI's ability to have critically needed ground handling equipment on island for the intended visit in February by tourists from Japan, was expressed. Economy Moving Says President Note President Kessai Note says the RMI government is moving forward with economic development plans and is seeking the support of regional and international partners. From the 1/5/07 issue of the Marshall Islands Journal Nitijela Opening The 27th Constitutional Regular Session of the Nitijela convened Tuesday, January 2, calling members together to begin yet another year of discussion and deliberation. l. From the 12/1/06 issue of the Marshall Islands Journal Small firms get help From the 11/10/06 issue of the Marshall Islands Journal JAL News The RMI Ports Authority's board of directors has approved purchasing ground-handling equipment for Japan Airlines Boeing-767s, and the Ports Authority is now reviewing proposals for the equipment. Marshall Islands Resort general manager Bill Weza and Marshall Islands Tours owner Satoshi Yoshii briefed the Majuro Chamber of Commerce Tuesday on the impending start-up by Japan Airlines of charter flights to Majuro. From the 11/4/06 issue of the Marshall Islands Journal Nitijela's bill targets MISSA NOTE: This Bill did not pass. From the 10/27/06 issue of the Marshall Islands Journal MISSA: Sell the planes to pay us Editorial Dark times ahead? From the Marshall Islands Journal Friday, October 20, 2006 Minister on possible sale of Find it out in the Journal From the 10/13/06 issue of the Marshall Islands Journal JAL schedules first flight for February From the 10/6/06 issue of the Marshall Islands Journal Talley's tally of five new computer specialists From the 9/12/06 issue of the Marshall Islands Journal Bridging the gap: An Editorial by the Marshall Islands Journal Sievers: 'Is the RMI safe for volunteers' From the 8/4/06 issue of the Marshall Islands Journal Interior hosts business conference From the 7/28/06 issue of the Marshall Islands Journal Nidel: 'Limits to freedom of speech' Nitijela infringes on free speech Letter to the Editor by Ben Chutaro Nitijela investigations: an Editorial by the Marshall Islands Journal
From the 7/21/06 issue of the Marshall Islands Journal Jack stands up for freedom of speech Chamber focus on health From the 7/7/06 issue of the Marshall Islands Journal The Speaker strikes back High school grads don't From the 6/24/06 issue of the Marshall Islands Journal Matson adds Guam route From the 6/17/06 issue of the Marshall Islands Journal From the Majuro Chamber of Commerce "Forum on Education in the RMI," 6/14/06 Our hungry kids
From the 6/2/06 issue of the Marshall Islands Journal Survey paints picture of RMI From the 5/5/06 issue of the Marshall Islands Journal RMI $1m debt to MISSA leads BOMI to halt loans From the 4/28/06 issue of the Marshall Islands Journal Smugger gets hit with $2,500 fine Weza: Resort in the black for the first time New destination saves hospital thousands of dollars From the 3/3/06 issue of the Marshall Islands Journal MEC joins forces with Micronesian Petroleum Agencies to share tax information First SK fuel delivery From the 1/27/06 issue of the Marshall Islands Journal Yachties to descend on Bikini ROC supports Air Nauru From the 1/13/06 issue of the Marshall Islands Journal Nitijela focus on quality, safety of goods From the 12/23/05 issue of the Marshall Islands Journal USPS price hike looms Two weeks of fuel left in MEC tanks From the 12/9/05 issue of the Marshall Islands Journal Postal rate hike From the 11/25/05 issue of the Marshall Islands Journal Ship registry: It's not gross, it's great Frank boosts MISSA millions From the 11/11/05 issue of the Marshall Islands Journal Minister objects to USPS rate hike From the 11/4/05 issue of the Marshall Islands Journal Finance officials, cops chasing forgery fiend From the 10/28/05 issue of the Marshall Islands Journal The Pacific power crunch From the 10/21/05 issue of the Marshall Islands Journal MEC told to drop 'price gouging' Mobil From the 10/14/05 issue of the Marshall Islands Journal RRE store sale 'unbelievable' From the 10/7/05 issue of the Marshall Islands Journal Government pay up 50 percent, 40 percent out of work
From the 9/30/05 issue of the Marshall Islands Journal Fuel prices up a third over 2004 |
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fielded questions ranging from the uninformed - what number do we call in an emergency? answer: “911” - to the pointed. An Australian woman who formerly worked for RMIEPA said in 2003 she was violently assaulted at knife-point in her Uliga home and little was done by police to bring the perpetrator to justice. “What's been done to change this attitude (among police)?” asked Nicole Baker.
Germany with the 8th Air Force. Most of his missions were spent strapped all alone into a totally exposed ball turret gun beneath a B-17 bomber.
Minister Alvin Jacklick opened the forum by saying the Ministry over the past several years has focused on improving hospital facilities in Majuro and Ebeye (Japan-funded new hospital section opened in Majuro in January; US-funded Ebeye hospital opened in 2002) and dispensaries on the outer islands, stepping up training programs for outer island health assistants, and reducing off-island medical referral costs by improving services in Majuro Hospital.
he problem of student truancy and absenteeism sparked a lively exchange about why so many Marshallese children are not in school at all, or don't show up to class regularly.|
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