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.
On nearby Arno Atoll, twelve Navy SeeBees teamed up with four Indian engineers and Marshallese workers to renovate the Arno Elementary School, installing a new roof, windows, doors and a rain catchment system. The team resided on the atoll for a week in order to accomplish their mission.

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.
The current situation with the National Telecommunications Authority is “denying the whole country the miracle of this century,” said Pacific International Inc. head Jerry Kramer.
A major stumbling block to expanding Internet use in the RMI is that NTA is now out of bandwidth, which means that adding more customers simply leads to slower and slower service as everyone competes for the limited amount of room for traffic in the limited communications “pipe.”
“We're out of capacity,” said Bank of Marshall Islands Jim McLean. “We're fully using the bandwidth. Everyone who has leased lines (for Internet service) is fighting against each other.”
On the cell phone front, TSL Enterprises manager Mike Slinger said the government could direct NTA to contract out the cell phone service to make improvements.
A key stumbling block for NTA is its large debt to the US Rural Utility Service (RUS), which lent it money in the early 1990s for telecommunications upgrades in the RMI. NTA now owes about $14 million on the loan.
But people at the meeting questioned the policy of government, which controls the NTA board, in allowing regular dividends to be paid despite the large debt.
Brian Vander Velde commented that globally in the telecommunications business, the goal is to keep the price of service going down, while the volume of use is going up. The point is telecom companies keep excess capacity that they fill with more users, and drop the price as the volume increases, he said. But NTA may be trapped because of debt and other issues so it's holding prices and capacity steady. Vander Velde said there are a number of business possible opportunities for RMI in attracting overseas telemarketing “but to do this, the volume has to be going up and the price down.” US Ambassador Clyde Bishop asked if NTA's debt to the RUS was “contributing to the ineffectiveness of NTA.” “Absolutely,” was the reply of several people. Commenting on the debt issue, David Utter said that a few years ago, a proposal was circulated by government to allow for Internet service competition by 2007.
But when he asked government officials about progress on this, NTA's debt situation was used as the reason competition cannot be allowed, he said. “What about selling NTA outright and paying off the debt?” he asked. Senator Gerald Zackios said the government needs to address NTA's debt situation.
He said that in 11 of the last 17 years, NTA has paid a dividend to its shareholders. A majority of shares are held by the RMI government.
“Why is the government allowing dividends to be paid when NTA has outstanding debt,” Zackios asked.
Kramer said the lack of competition in communications was a big concern because “without communications, we're completely out of business.” He also said that he understood the problems affecting NTA management, adding that the issue is the ownership of NTA by the government.

Responding to questions from the Journal, NTA general manager Tony Muller totally disputed the contention that there is an Internet capacity problem in the RMI and said plans are in place to reduce Internet charges.
In an email response to the Journal, Muller commented on the RMI's high Internet charges compared to other islands in the Pacific.
“We have a plan in place, pending board approval, to continue reducing Internet tariff, especially to our schools,” Muller said. “NTA has continued to improve service, upgrade equipment, discount rates, and expand services on the urban centers and outer islands.”
Among issues for NTA are “the volume loss of fax and international traffic, under-priced local service tariff (based on International Telecommunications Union costing exercise performed in FY98), the mounting losses from outer island radio operations, coupled with the higher cost of fuel, utilities, newly imposed taxes and operations in general” - all of which mean “the company relies on certain sector earnings to support the business.”
Muller added that “our vice chairman (Charles Dominck) assured the Chamber of Commerce that a board review on tariffs is forthcoming. The board is scheduled to meet on the 21st of this month.
As to numerous business and education representatives commenting about limited bandwidth for Internet, Muller said simply: “This is an untrue statement.” He didn't offer any additional information.
As to why NTA pays dividends when it has a $14 million loan debt to a US agency, Muller said “NTA meets the requirements of the RUS security and mortgage agreement for dividend issuance.” He also said “the company has over 600 Marshallese private shareholders; why wouldn't we declare a reasonable return on their investment?”

Senator Tomaki Juda Calls for NTA Competition

By GIFF JOHNSON

A bill to allow competition in telecommunications for the first time was introduced Wednesday this week into the Nitijela by Kili/Bikini Senator Tomaki Juda.
Speaker Litokwa Tomeing assigned the bill to the Resources and Development committee that is chaired by Senator Nidel Lorak.
Currently, RMI law bans competition in telecommunications in the RMI, with the National Telecommunications Authority (NTA) designated by the government as a monopoly.
The bill, which aims to amend the NTA law, would specifically “allow, encourage and enlist private sector participation in the delivery of telecommunications services to persons in the Republic.”
It would also change NTA's “exclusive” rights in the telecommunications sector to “non-exclusive” to allow competition.
Introduction of the bill comes on the heels of increasing concern and complaints over NTA-provided Internet, email and telephone service in the RMI, as well as the cost of Internet in the RMI compared to other Pacific island countries.
A forum on telecommunications sponsored by the Chamber of Commerce Tuesday produced an outpouring of concern from business and education officials. NTA management did not attend despite an invitation from the Chamber, but board members Charles Domnick and Patrick Chen did.

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:
• In fiscal year 2004, prices went up two percent. In FY2005, prices went up 3.5 percent and last fiscal year they went up 5.3 percent.

From the 7/20/07 issue of the Marshall Islands Journal

New Bank to Open in Majuro

By SUZANNE CHUTARO
A $5.6 million Japanese investment is about to pump up Majuro’s financial sector with the introduction of a new commercial bank that is expected to be in full operation by year’s end.
The First Micronesia Bank Incorporated is the brainchild of international investment entrepreneur Sardha Rasaputra, who initiated the idea for Japan Airlines direct service to Majuro in early 2000. Local businessman Prianga Fernando, who has been acting as an interim local agent for the First Micronesia Bank Inc. group, said that all the paper work has been submitted to the Banking Commission and now it’s just a matter of paying the banking license fee.
“Everything is processed,” said Fernando. “They just have to pay their $8,000 license fee, which I expect will be paid this week.”
According to Fernando the Japanese investors are mostly employees of Citibank and they are investing $5.6 million to establish the First Micronesia Bank — which he says will be a fully insured commercial bank with a focus on outer  islands development.
Banking Commissioner Ann Marie Muller confirmed last Friday that her office has been responding to queries from the First Micronesia Bank Inc. since February of 2006.
“We encourage more banks to be establish,” said Muller. “We are concerned about interest rates and competition will be good (for customers). I hope that people will embrace this as an additional bank and not a threat.”
With the inquiry process reaching a wrap up phase, both Muller and Fernando say they expect the bank could be up and running by the end of the year. 
“It’s still far off but it’s possible that we’ll see something more concrete within the next six to nine months,” said Muller.
A four-member team representing the investors is expected to be in Majuro in early August to finalize arrangements to establish the First Micronesia Bank Inc.
After this, Fernando said construction of a two-story building is expected to commence in downtown Uliga, just parallel to the Kitco Apartments building, to house the First Micronesia Bank. Once established in the Marshall Islands, the First Micronesia Bank Inc. also plans to establish a bank in Palau, he said.

 

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.
But the numbers tell the story: last year, New Zealand exported more than $6 million in goods to the RMI, but Marshall Islands companies only sent $4,000 worth of products south.
“It’s all about shipping and air service,” said Richard Maugueret, the executive officer of the New Zealand Pacific Business Council, that was set up two years ago to promote trade ties in the region. About 10 New Zealand business people joined the Chamber meeting on Tuesday. They were part of a 70-strong delegation led by Foreign Minister Winston Peters. New Zealand’s Minister for Community and Voluntary Sector, and the Associate Minister for Pacific Island Affairs Luamanuvao Winnie Laban told the Chamber of Commerce Tuesday that “we’re committed to two-way trade.”
“It’s really important to focus on how best we can support our Pacific cousins to grow their business and trade better,” she said, adding that this is why New Zealand sent up the Business Council to “link with and better support each other.” She said that the government’s role is to support the private sector to develop for the benefit of the country. Business leader Gilbert Ullrich told the group that last year’s big trade show in New Zealand included good participation from the Marshall Islands, and they are hoping for an even bigger presence at a big trade conference being planned for New Zealand in 2008.
Both Ullrich and Laban confirmed that it’s not only US-affiliated islands taking a strong look at business opportunities with the huge American military build up on Guam.Ullrich also commented about the poor state of shipping and airline service linking north and south Pacific, and with the halt to service by Our Airline earlier this month, it’s significantly worse. “There’s a desperate problem with shipping and air service” that inhibits trade between the RMI and New Zealand, he said.
But Ullrich thinks that developments in Guam, particularly port expansion, may offer some opportunities for the RMI and other parts of Micronesia. He said that New Zealand companies that are supplying Guam may be able to shoot larger volumes into Guam, which then be transshipped into RMI to improve the trade situation.

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.
A report issued this week by the RMI government shows that as of March 2007, there were 2,415 people working for the national government — a 23 percent leap from the 1,959 employed in early 2004.
Since the third quarter of 2004, the number of people hired to work for the national government has continued to steadily increase, with nearly 300 of the new workers hired in 2006.
The payroll costs of this large and expanding government workforce demonstrate why the government has often faced cash flow problems over the past two years in meeting its by-weekly payroll.
While the payroll cost was $26,438,000 in fiscal year 2004, the cost jumped to $30,107,000 last year. And this year, it is already on a record-setting pace to outdo last year’s record level of salary payments.
In FY2004, quarterly (three month) salary disbursements never exceeded $7.1 million, and in one quarter were as low as $5.6 million. But the days of quarterly salary costs of under $6 million are long gone.
By the second quarter of last fiscal year, salary costs hit the $8 million mark or the first time. Last quarter, ending in March this year, another record was set with a quarterly salary figure for government workers of more than $8.2 million. In the mid- and late-1990s, the RMI government reduced its government workforce to fewer than 1,700 workers. But since 2000 under President Note’s administration, the number of workers has risen by nearly 50 percent.

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.
Attorney General Posesi Bloomfield told the Journal that he has told contractor Pacific International Inc. (PII) that it cannot import construction materials for the project duty-free.
PII is seeking an exemption from import taxes that would save the company hundreds of thousands of dollars.
“Our contract is guided by certain specifications, and a budget,” Kramer told the Journal.
“There was an expectation of tax exemption. We are applying pressure in every direction to seek every possible conservation and input of funds to deliver the highest quality that we can within the limitations of our contract and the budget.
“As is usual, we find proponents in the government giving us the maximum support, and opponents who for various reasons have been a challenge to deal with.”
The fast-track project that started in March is being funded at $5 million provided by Taiwan. “When PII signed the contract it knew it would have to pay import tax,” Bloomfield said.
Former Taiwan Ambassador Lien-gene Chen is reported to have told PII officials that he would lobby to get an import tax waiver But Bloomfield said “even the (RMI) government is not exempt (from import tax).”
He indicated that PII has threatened to cut back on quality of the construction if it doesn’t get an import tax exemption. But “the law speaks for itself,” Bloomfield said. “We can’t change the law.”
Kramer has a different view.  “The Taiwan-funded project will be a proud show piece and a tribute to the more than 100 Marshallese supervisors, workers and craftsmen along with the Australian supervisor, Filipino engineers and artisans, English surveyor, sub-contractors and the coordination and leadership of a local company,” Kramer said.
“This sophisticated accomplishment is proof that we have the capacity in the Marshall Islands to achieve excellence and compete in major design construction projects.”
Kramer said if construction goes as planned, “this project will be ready for ribbon cutting in early October this year.”
He described the work on the project as “an extraordinary accomplishment of the people intimately involved in the remarkably short period of design and construction.  There would normally be a one-year design phase.  We are accomplishing the design and construction in just over eight months at a price substantially less per square foot than the school projects we are working on.”
Kramer praised many people for “this monumental task,” including Taiwan, President Note’s administration for awarding us the design construction contract and for support of various RMI agencies, Ministry of Public Works and especially engineer Herculano Langunay and the talented work of all those involved in the actual construction.

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.
In addition, a transshipment fee will increase by $65 for cargo destined for Palau, FSM, and Marshall Islands via Guam.
The company said these increases are being taken to offset escalating costs, including cargo handling costs. The increases will be filed with the Federal Maritime Commission.
Matson customers are urged to contact their local sales representative or the company’s Customer Support Center for more information.

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.
Postal services board chairman Casten Nemra told the Journal this week that the PO board held its first meeting on June 15. It was established as part of a new law that sets up the Postal Service Authority.
Nemra, who is also the government’s Chief Secretary, said the first meeting was largely focused on reviewing the provisions of the law and the board’s role. Following the June 15 meeting, the board toured the Majuro post office and lunched with the postal employees so the board and employees could meet.
The next board meeting is set for July 3, with a follow up meeting tentatively scheduled in late July to meet with US Postal Service official Leo Tudela. Nemra also said that he’s requested reports from the USPS regarding the RMI postal service to assist the board in its work.
Postmaster Sailass Andrike is a non-voting, ex-officio member of the new postal board. But he missed the first meeting when he had to fly out to the US with his wife, reportedly for medical reasons.
Nemra said Ebeye postmaster Action Riklon will be flying to Majuro to be at next week’s board meeting. He added that the board has already been in communication with him.
Nemra said although the board was in the early stages of organization, all the members are anxious to improve the service of the PO.
“Things need to improve,” he said. “We haven’t addressed specific cases of accountability and so forth. We’re still assessing the situation and the role of the board.”
But he said he expects that at next week’s meeting, the board “will get into issues (about) procedures and how mail is managed and handled.”

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.
MSAI general manager Phil Welch said the closure was “due to decreasing revenue and reduction in the overall fishing vessels that we have worked with in the past.”
PII’s Majuro Marine will take over as liner agent for Swire Shipping (Kiribati Chief) from July 7 onward. FedEx, also currently handled by MSA, will suspend shipments into Majuro on June 30 until a suitable replacement can be found, Welch said.
The Majuro shipping agency was hard hit by problems affecting its largest off-island customer, Japan Tuna, which was forced into bankruptcy reorganization more than year ago. That development greatly reduced the flow of vessels into Majuro, and forced the decision that Welch announced late last week about the agency’s imminent closure.
MSA has been in operation since January 2002.
He acknowledged that “it was a shock to most people that we are not able to survive,” Welch told the Journal. But he said it was impossible for the agency to maintain the same level of service that it has been providing without a solid revenue base. “If you’re in shipping here, you’re either big or you’re gone,” he added.
Aside from Majuro Marine, other companies who handle vessels are KMI, Koo’s Fishing, Luen Thai and RRE.

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.
With the heavy RMI reliance on US grant funding, the GAO report calls into question the ability of the trust fund to support basic government services when the Compact’s grant funding ends in 2023.
The GAO report evaluates both the RMI and Federated States of Micronesia’s trust funds. The report also reveals a serious difference in understanding between island leaders and the GAO on one hand, and Bush administration officials on the other about the purpose of the trust funds.
The State Department criticized the GAO report for repeatedly questioning the “adequacy of the funds to replace expiring grants.” This is not the goal of the trust funds as agreed in the Compact.
“This is a dangerous misreading of the international agreements and is likely to build up unwarranted expectations that are not supported by the agreements reached,” the State Department said last month in its response to the report. “So long as the trust funds are a source of annual revenue, they have met their agreed and stated purpose,” the State Department said.
But FSM officials disputed the US position. “This trust fund was negotiated from our side of the table to provide a smooth transition, in the year 2023, from the annual US grants into a regime of annual trust fund income that would equal or better the level of US grants at the time of transition,” James Naich, the FSM’s Charge d’Affaires in Washington said.
“We are aware that certain parties on the US side would now prefer to state that there was never such an undertaking by the US, and that the trust fund represents nothing more than a handshake by the US in 2023 to the FSM, with best wishes for the future.” He said the FSM “strongly disagrees” with the US view of the trust fund’s purpose.
GAO also “strongly disagreed” with the State Department’s contention that GAO misunderstood the Compact.
“Our report clearly stated that the purpose of the trust funds is to provide an ongoing source of revenue,” GAO said.
The GAO makes the point that the stock market performance over the next 16 years could lead to wildly differing levels of funding in both trust funds in 2023. This means that the trust funds “may not provide sustainable income to the countries after annual Compact grants end in 2023,” the GAO said.
If the RMI chooses an aggressive (and more risky) investment strategy, market volatility — the ups and downs on Wall Street and international stock exchanges — could produce trust fund revenue ranging from as low as $438 million to $1.4 billion in 2023, the GAO said.
The trust fund agreement allows the RMI to distribute annually no more than the total of the US grant funding in 2023, which will be $27.7 million (adjusted upward for inflation).
“We found increasing probability that income from the trust funds cannot sustain the maximum disbursement level allowed,” the GAO said.
“Furthermore, the trust funds face increasing probability of providing no income at all in some years.”
RMI Ambassador Banny deBrum said the RMI wants 100 percent inflation adjustment of annual US contributions to the trust fund that, if provided, will “have a substantial impact on the sustainability” of the trust fund.
Aggravating the worsening financial picture for the RMI and FSM is “both governments’ budgets face growing wage expenditures, heightening the negative fiscal impacts they will face as Compact grants decline,” while both RMI and FSM “have not undertaken many reforms needed for economic development.” GAO said that reinvestment of interest generated back into the trust fund would reduce the likelihood of years without revenue, but this will also mean that annual distributions to support government services will be lower. The Compact sets a limit on the maximum amount that can be paid out of the trust fund after 2023, but does not guarantee or set a minimum payment level.
The RMI government has not yet fully established the trust fund, the GAO said. FSM has fully established its trust fund, but as of March, the RMI had not appointed an independent auditor and any money managers — the latter in part “because the trustee (First Hawaiian Bank) and the investment advisor (Goldman Sachs) disagree over the assignment of custodial rights to the fund,” according to GAO. The GAO criticized the joint US-RMI and US-FSM trust fund committees — which are controlled by the US — for not taking steps to improve their management and decision-making processes to speed things up.
Foreign Minister Gerald Zackios told the Journal that the trust fund committee is meeting Thursday this week and he hopes it will resolve the money manager issues.
GAO also noted that with Compact grant funding dropping every year, more Marshallese and Micronesians may move to America, reducing the burden on the governments to pay for health, education and other services and possibly leading to more money coming into RMI from Marshallese working in the US. But “FSM and RMI emigrants have limited earning opportunities abroad, owing to inadequate education and vocational skills, and may therefore not remit significant amounts (of money),” GAO said.

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 financial statistics show that the retirement agency had a shortfall of about $240,000 in FY 2006 (October 1, 2005 to September 30, 2006) when benefit payments and administrator costs are subtracted from tax collections. But MISSA was able to use what Aho described “other income” — various penalties and fees collected — and revenues from the previous year to cover the shortfall from tax collections. “That’s why we didn’t need to liquidate any of our assets because we had cash on hand from previous years,” she said.
Benefit payments jumped over the $10 million mark for the first time in the history of MISSA in 2006.
MISSA paid out a total of nearly $10.7 million last year. Its tax collections also remained steady in the 2004-2006 period, at over $11 million annually — but this was down from the record set in 2003 when slightly over $13 million was collected in taxes. “We’ve been doing well with our auditing (of businesses),” she said. “This has generated additional revenue.” Aho said that the RMI government is paying on time, which is also assisting cash flow.

 MISSA money matters

                                                FY ’02       FY ’04        FY ’06

Tax revenue                        9.9            11.4          11.6
Benefit payments            8.6            9.7            11
Administrative costs            .69            .86            .89
Number of beneficiaries            2,859        3,105        3,278

Note: Data provided by MISSA

From the 6/1/07 issue of the Marshall Islands Journal

Business of Politics
Marshall Islands Chamber of Commerce president Jack Niedenthal said he wants to make it very clear that the organization is not going to endorse political parties in the election.
He made the comments to the Journal in response to some criticism that the Chamber had lost some of its members because it was “becoming political.”
“We don't want to support one party or the other,” he said. “But for the business community to survive, we have to take political positions and encourage platforms that support business.”
He said this is particularly true in relation to legislation that affects businesses.
“We think we can help the government be more efficient with taxes,” he said. “We want the government to be successful because we have such a huge public sector.”
He said what the Ministry of R&D did last year by coordinating review of the proposed labor law by everyone concerned, including Chamber members, was a very positive effort.
There are problems with the legislation as passed, but the process worked well.
Commenting specifically about the fact that the Marshalls Energy Company and National Telecommunications Authority have decided not to continue membership in the Chamber because of the “political” change, Niedenthal said that was fine, since they are “public agencies.”
But, he added, “we have to do what's best for business.
“We are at a point in our history where we have to be a more effective lobby group. If we lose some members (as a result), so be it.” During the past 18 months, the Chamber's goal has been to increase public dialog, which is why it has sponsored many forums, he said. “We're happy to sponsor forums (because it gets) people talking about the issues,” he said. Referring back to several of last year's forums with government ministries, Niedenthal said “even though the questions were hard and pointed, the participants always came out looking good because they addressed the concerns directly.” His main point is to urge the continuing flow of open discussion on important issues to businesses and the community.

VIPs to speak at Chamber events in June
The Marshall Islands Chamber of Commerce is sponsoring three public forums over the next 10 days.
This coming Tuesday, Samoa's Deputy Prime Minister Misa Telefoni Retzlaff will be speaking about private sector and economic development in his county, which is ranked high by the Asian Development Bank in “good governance” ratings for the Pacific region.
He will speak and answer questions at 12 noon Tuesday at the Melele Room.
The following week, Chamber forums will feature both high-level local and Washington speakers.
On Tuesday, June 12 the Chamber will have the Kwajalein leadership talk about Kwajalein issues and answer questions from 11:30-1:30.
The following day, June 13, US Secretary of Interior Dirk Kempthorne will spend an hour with the Chamber, from 11:30-12:30.
Both these events will be at the Enra Restaurant.
“We want the Kwajalein landowners to tell us what their issues are,” said Chamber president Jack Niedenthal.
He said it will be like the forums the Chamber sponsored with various government ministries last year - the public is invited and anyone can ask questions.
Kempthorne has been given a list of questions by the Chamber, and is expected to answer some or all of them.

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?
The future of JAL appears to be hanging on whether or not the RMI Ports Authority wins a bid for a second-hand airport tug that the military is selling on Guam in a few days. But while this might be a stopgap to ensure that the June 30 JAL flight proceeds, JAL officials have informed RMI leaders that the Guam tug does not meet the Boeing-767 requirements which the originally-purchased tug - now stuck in Jakarta and enmeshed in a bankruptcy proceeding - did.
With the original tug tied up in the bankruptcy problem, the chances of it being released in time to make a ship to Majuro before June 30 are slim.
“The receiver in New Zealand is presently attempting to broker a settlement for the release of the tug with the Indonesian company holding the tug,” Ports Authority director Jack Chong Gum told the Journal. Ports authority paid for the tug in full to the New Zealand firm MacTec .
“Apparently MacTec had a joint venture with the Indonesian company and they have refused to release any of MacTec's assets, including the tug, until such time amounts due to them from MacTec are paid,” Chong Gum said.
He said Ports Authority told the receiver of the importance of the tug to be in Majuro before June 30. “We still have a chance to get the tug here in time before the June 30 JAL charter flight, but the window is closing in really fast,” he said. “We should know by early next week if this is not possible.”
Pacific International Inc. officials located a similar tug that the US military on Guam is auctioning through a bid process that closes on June 4. So obtaining of this airport tug depends on the luck of the bidding, if Ports Authority decides to bid.
But a JAL official informed Majuro officials that if the runway is wet or in a rainy condition, then the Guam tug “may slip” while pushing the Boeing-767. This situation will force JAL to take off with weight restrictions, the JAL official said.
The President's Office told the Journal that it is aware of the situation and has received brief updates from the Ports Authority and Foreign Affairs. “Although we understand that the situation is unfortunate, we do realize the urgency and the need to continue the JAL charter flights,” the President's Office said in a statement to the Journal. “We are aware that the RMIPA is currently looking at all possible avenues in getting the tug to Majuro at the earliest time possible or seeking other options that would supply the equipment to Majuro on time.”
The President's Office added that “the government sees the potential in tourism and has worked very hard to bring the JAL flights to Majuro. The President's Office will continue to monitor the situation and will work closely with the Ports Authority and JAL to ensure that the service is not disrupted.”
Chong Gum said that on the deal with the now bankrupt MacTec, “the Ports Authority hasn't lost any money. In fact, we have informed the receiver that if the tug does not arrive Majuro before June 30, that we intend to cancel the order for the tractor and will thereafter file a formal claim for a full refund of all the amounts paid to MacTec for the tug.”

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.
Dirk Kempthorne will be the highest-level American government official to visit the RMI since previous Interior Secretary Gale Norton visited in January 2004.
Kempthorne made the announcement at last week's meeting in Washington with the leaders of US-affiliated Pacific islands.
He will be traveling to the US island territories of Guam, American Samoa, and the Northern Marianas, as well as to Palau, the Federated States of Micronesia, and the Republic of the Marshall Islands.
“I can't begin to tell you how much I'm looking forward to visiting these places that are such an important part of the work of my Department,” Kempthorne said in remarks at Pacific island night in the National Geographic Society's Explorer's Hall. “I look forward to visiting the schools, the health care clinics, the villages, the work places. I look forward to meeting as many people as possible, and getting as full an understanding as I can get of their lives, their concerns, their aspirations.”
Kempthorne took over as Interior Secretary in June 2006, a few months after Norton resigned. He also announced that Interior's Office of Insular Affairs will host the fourth Conference on Business Opportunities in the Islands on Guam on October 8 and 9.
The conferences provide an opportunity for US businesspeople to meet with entrepreneurs and business owners and managers from the US-affiliated islands and explore ways of working together that will strengthen the economies of the islands.
Most US financial assistance to the Pacific islands - more than $300 million per year - comes through the Department of the Interior in the form of grants for schools, hospitals, roads, power plants, environmental protection, law enforcement, financial management, immigration control, worker protection, refugee protection, economic analysis and other purposes, according to the Interior Department.
Pacific island night, an annual event held this year in conjunction with the Pacific Island Council of Leaders, is hosted by the embassies of Pacific island nations and the congressional delegations of US island territories in the Pacific.
The Department of the Interior hosted its own island festival last Thursday to celebrate Asian Pacific American Heritage Month and underscore Interior's special role in supporting island communities.

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.
The Public Service Commission confirmed that former Internal Affairs Secretary Wilbur Allen is now Secretary for the Ministry of Transportation and Communications, while assistant secretary of Internal Affairs Amram Mejbon is now acting Secretary at Internal Affairs.
Meanwhile, former T&C Secretary Jorelik Tibon has shifted to become the deputy Chief Secretary working with Chief Secretary Casten Nemra.
Internal Affairs has had three secretaries at its helm since Minister Rien Morris took over as Minister four years ago - the most changes of any Ministry in the RMI.

The RMI's Immigration Division has a new head.
Former national police trainer Tarry Paul is director of Immigration. His assistant is Elmer Lejjena, who formerly was a staff member within Immigration. The two were recently confirmed in their posts by the PSC.

$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.
The part was flown in Monday afternoon and installed immediately so the Dash-8 could get back into operation on Tuesday this week.
AMI general manager Dan Fitzpatrick said the part is something that in his experience is never an issue, which is why the airline didn't have a spare on the shelf, although it now has an extra.
“It's really not common to have a problem with this fitting,” he said. “This was a one in a million occurrence.”


On the good news front for AMI, Namdrik is expected to be the ninth outer island airfield that can handle the Dash-8.
AMI made a trial landing at Namdrik Tuesday afternoon, following a report from the RMI Directorate of Civil Aviation giving the thumbs up to the runway.
The DCA's report issued Monday this week follows runway clearing and cleaning improvements by Pacific International Inc. (PII), said AMI general manager Dan Fitzpatrick.
“If we could land the Dash-8 at more outer island runways, we'd save money and provide better service,” he said.
Currently, the Dash-8 can land at eight outer island runways, with Namdrik now the ninth, in addition to Majuro and Kwajalein.
Fitzpatrick said that he's hoping that Tarawa, Maloelap and Majkin, Namu will be the next runways to accept the Dash, once they are improved.

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.
Chief Secretary Casten Nemra told the Journal this week that taxes and other revenue have reached slightly over $16.9 million through April 30 this year.
That is “an increase of three percent for General Fund revenue over fiscal year 2006 for the same period,” he said.
Nemra said overall, collections have been steady for FY2007. Although he acknowledged that the FY2006 General Fund revenue was about four percent lower than projects at the start of last fiscal year, he indicated it was “still too early to tell for FY2007” whether revenue will meet the projections.
A significant development on the spending side is that expenditures for salaries are down five percent over the same period for last year, he said. This is an example of “attempts to put fiscal controls in place,” he said.
Budget planning for fiscal year 2008 is already well in progress, with a draft budget outline to be submitted to Finance Minister Brenson Wase in the next couple of weeks for presentation to Cabinet.
Once Cabinet has approved the budget plan, it will be put out to government ministries and agencies for them to fill in the details, Nemra said.

Mission Imppossible: New News about the JAL Flights

By GIFF JOHNSON

Most people probably believe that, after two flights, the Japan Airlines charter service is now a settled, foregone conclusion.
But an old, thought-to-be-resolved problem reared its head this week, threatening not only the scheduled June 30 flight, but all future JAL flights.
The tractor tug required by JAL for its Boeing-767, purchased more than four months ago by the RMI Ports Authority, did not arrive before the first JAL flight in February, and missed its April 30 Ports Authority promised arrival date - and as the Journal went to press Wednesday was not booked to arrive on the only two vessels that can deliver it to Majuro before the June 30 JAL third charter arrival.
Throwing the entire situation into further disarray, the company that Ports Authority bought the equipment from in New Zealand is bankrupt and has gone into receivership.
“We sent several email messages to follow up on the tug but to date have not received any response from the company,” Ports Authority director Jack Chong Gum told the Journal on Wednesday. He said he heard earlier this week that the company had gone bankrupt, but only confirmed it on Tuesday this week through a phone call to New Zealand.
“The Ports Authority must get the tug here before the June 30 flight or there will be no more JAL flights,” Marshall Islands Resort general manager Bill Weza said at Tuesday's Chamber of Commerce meeting. “Despite promises that the equipment would be here by January 30, it's still not here.”
Tour and dive operator Satoshi Yoshii, who is currently in Japan, told Foreign Minister Gerald Zackios by email this week that the “RMI Ports Authority must take immediate action to replace a tug before the June 30 flight. Otherwise Marshall Islands would never have any more JAL flights.” Yoshii said the June 30 charter is already sold, with 180 passengers having purchased their tickets, and JAL is planning five-to-seven additional flights over the next several months - but will not commit to dates until the tug is on island.
“This is an extremely significant matter for RMI tourism development,” Yoshii told Zackios in what may be the understatement of the year.
Zackios, who is in Washington, told the Journal by email Tuesday: “I cannot over-emphasize the importance of maintaining the JAL charters.”
JAL's Koji Mochizuki, who is supervising development of the Majuro charter service, said simply: “If RMI Ports Authority is unable to allocate (the tug) at Majuro by June 30, we can't fly.”
Meanwhile, Weza and shipping agent Phil Welch, whose company is agent for the vessels coming from Asia, said the tug is sitting in Jakarta, Indonesia, and no booking has been made for it to come to Majuro.
But that is news to Chong Gum, who told the Journal: “The last advice we received from the vendor was that the tug had left for Brisbane on March 12 and was expected to arrive Majuro on April 28. If the tug is in Jakarta, I am not aware.”
Still, Chong Gum said that Ports Authority is “trying to contact the company to arrange for immediate shipment of the tug.” But he is not optimistic that it will be here before the scheduled June 30 flight.
“We made an honest effort to acquire the equipment but due to factors beyond our control such as the vendor being put under receivership, the equipment is not here and most likely won't be here before the June 30 flight,” Chong Gum said.
“RMIPA is currently considering other options, such as sourcing a tug from other vendors. The bottom line is that RMIPA will get the tug here. When, where and how? I can't say.”
Welch said if a booking is made in the next few days for either one of the two vessels that is coming from Asia with arrival dates before June 30, then the tug will make it before the deadline.
Chong Gum told the Journal that he believes that the Ports Authority is “being unfairly criticized” over the tug issue.
“The RMI PA invested considerably in the airport equipment required to make (JAL) happen - probably more than any other entity, public or private,” Chong Gum said. “We made this investment knowing we wouldn't see an immediate return. We took this risk because we support the development of tourism in the RMI.”
Weza said the RMI has just one opportunity to make a success of the JAL situation. “If there's no tug here by June 30, we might as well close up and write tourism off (as an industry) for Marshall Islands,” Weza said.
“The RMI government made a commitment to JAL and the private sector, and RMI PA will do its part to ensure that the required equipment is here,” Chong Gum said. “On timetable, I can only say we will do all that we can to get the equipment here.”

From the 4/20/07 issue of the Marshall Islands Journal

Tony Muller: 'The fiber optic cable is a go'

By GIFF JOHNSON
A new fiber optic cable linking the Marshall Islands with the world is expected to be operational in 2009, according to NTA general manager Tony Muller.
NTA, whose board of directors is “100 percent behind the project,” has already submitted a draft loan application to a US government lending agency for the project, and is talking with the India-based communications company that will carry traffic from Guam to the rest of the world in preparation for the cable.
But the project that is being touted as revolutionizing communications in this isolated part of the world is waiting for the August 2007 appointment by the military of its so-called “third party” that will own and operate the military's portion of the cable from Guam to Kwajalein.
“The military can't own it,” Muller said. An Alaskan firm is being brought in to handle it for the military, and until the company is officially on the project in August, both NTA and the Federated States of Micronesia's Telecom agency have to wait to conclude agreements on the cable, Muller said.
Since the submarine fiber optic cable was first proposed about four years ago, the RMI cost to run cables to Ebeye and Majuro has dropped from about $22 million to $15 million, he said.
“Once we sign a contract (with the military's third party operator) it will be 12-to18 months to be operational,” he said, adding that early 2009 is the target date for completion.
While the new cable will open up bandwidth - a fancy way of saying a lot more information can flow and talking can happen faster through the cable - it will more than double NTA's current debt (it owes the US Rural Utility Service about $14 million on a previous loan).
“Everyone is thinking that the rates will go down with the fiber optic cable,” Muller said. “But we will have two loans to pay then.” He said that most likely the rates will stay the same, but with the increased bandwidth, people will get much more done for the time used. “The business community will enjoy it,” he said.
He also said that for NTA to successfully bring the cable to the RMI, “we still need government support.”

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.
MEC general manager Billy Roberts confirmed that MEC had purchased 40,000 gallons of diesel from Mobil's Uliga bulk fuel operation in two installments - one last Friday and again on Monday this week - and was considering the possibility of an additional purchase at mid-week, depending on the arrival date of the SK tanker.
The SK fuel tanker is expected to arrive either this Friday or Saturday, depending on how much time it can make up following delays forced by a major storm in the Guam and Saipan area last week.
MEC would have run out of fuel earlier this week without the Mobil purchases.
This situation resulted because MEC was forced to delay placement of a planned order to SK by 10 days last month when funds from the government were not immediately available to pay for the purchase.
After a long-standing fuel supply contract between Mobil and MEC ended in 2004, the two companies became embroiled in disputes over continuing supplies that resulted in a final shipment to MEC in mid-2005 -for which MEC and the government are still making payments, with about $3 million still due to Mobil.
“Business is business,” said Roberts of the new sales by Mobil to MEC. “Mobil accommodated our need at a reasonable price.”
MEC has been using local vessels Charlie's Angel and Neidaga to deliver diesel from Mobil to the Delap Dock, where MEC has pipes into its oceanside tank farm.
MEC uses from 12,000 to 15,000 gallons of diesel per day to operate its two power plants.

RMI? Where is that?

Compact II postal problems continue to multiply for local customers.
Majuro attorney Dennis Reeder has been unable to receive payment through the mail from a client overseas because the US Postal Service is rejecting a letter sent from England to Majuro.
According to an email received this week, Reeder's client in England said that he “wrote to you on 9 February enclosing an International Money Order in settlement of your fees for preparing a Foreign Legal Opinion.” The letter was addressed to Reeder at his local post office box number, RRE Commercial Center, 96960 Majuro MH, Marshall Islands “but has been returned to us marked 'mis-sent to Honolulu, Hawaii - 3 times' and 'registered mail service discontinued,'” the email said.
“Can you please let me have an address where I can send the Money Order?”
No explanation was provided as to why the US Postal Service would “mis-send” a letter for the Marshall Islands to Hawaii and not simply send it onto Majuro, and also why it would reject a letter registered from a foreign nation - England - to the RMI, since the USPS eliminated registered mail service only within the USPS system, which doesn't include England (the two countries separated in about 1776).
The Marshall Islands Journal was advised on Wednesday this week by a US-based company that has provided printing supplies to the Journal for many years that it cannot use “1000 Oceanview Dr., Majuro, Marshall Islands 96960” because that “address is no good.”
“Can you please fax me a corrected address so we can … get the order on its way,” said the vendor.
Prior to the US government changing the RMI from a domestic to an international destination in January of 2006, many local residents gave themselves “street addresses” for mailing purposes - Box 14, 1000 Oceanview Dr., Majuro - since some US vendors will not mail to a post office box.
But now it's not the box or street address that is being rejected by US vendors. It's the “Majuro, Marshall Islands MH 96960” that is being rejected as “no good.”
In related news, the US Department of Interior states that a primary aim of Compact II is to support development of the private sector in the RMI.

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.
“There have been an awful lot of accomplishments since the last visit,” said Louise Wong, who headed the two-member Western Association of Schools and Colleges accreditation team. “This school has a bright future.”
Wong is the associate superintendent of Hawaii Catholic Schools. She was joined by Gaylien Fujioka the principal at Na'alehu Elementary and Intermediate School in Kona, on the Big Island of Hawaii.
Wong and Fujioka delivered a 30-minute “exit report” to Coop staff and parents following two days of reviewing the school.
Wong said that in preparation for her first visit to Majuro, she read the school's 2004 progress report to WASC. “I thought, oh my, there's a lot of work (that needed doing),” she said of her reaction to reading the earlier report before arrival. “Coming here I'm very pleased (with what I see). I'm amazed at what's going on in the classrooms.”
Fujioka went down a punch-list of areas that were identified three years ago for improvement, indicating that in every one major advances had been made.
She said the WASC team was pleased to see that the school had adopted “expected school-wide learning results” and was using them to measure progress. She also praised the use of new textbooks and the articulation of studies and curriculum from one grade to the next.
The school was seriously working on upgrading its facilities, addressing management and governance issues, providing an excellent special education program, and developing partnerships in the community among other activities, Fujioka said.
“As a Hawaii school administrator, I go through lots of training related to 'best practices,'” Fujioka said. “There's no such formal training here, (but I see) best practices happening. A lot of good things are happening on this campus.”
She added that she will take things she learned from her visit to Coop School back to her own school for use there.
Wong said that an important element in Coop's success is that there is “a lot of cooperation and people committed to addressing the needs of the school.
“The students are just wonderful, and the teachers need to be recognized - they are just terrific,” she said.
A report from the visit will be issued to the Western Association of Schools and Colleges. The WASC commission will meet in June to review it and decide on future accreditation. Wong said Coop can get anywhere from a one-to-three-year extension, after which a new cycle requiring a complete “self-study” will begin.

RMI Gov Wrist Slapped by DOI

By GIFF JOHNSON

An RMI government violation of the Compact's fiscal procedures agreement caused alarm bells to ring in Washington, DC last week, prompting the Interior Department to issue a letter warning the RMI that the US was fully aware of the improper action by the Ministry of Finance.
The ongoing RMI-Marshalls Energy Company fue