Marshall Islands Journal News Archive beginning in 2005 through 2007 From the 12/28/07 issue of the Marshall Islands Journal Will JAL Stick with the RMI? By GIFF JOHNSON Two Japan Airlines flights this month is good news for local hotels and businesses, and it brings to six the number of charters this year. But after a hiccup-filled 2007, is JAL going to halt its charter service in 2008? That question is being asked by some people involved, and last month’s charter that had only 100 passengers — half the number of previous charters — is fueling concern. Marshall Islands Resort general manager Bill Weza, who describes himself as “Mr. Optimistic,” told the Journal that “no one has given up on it.” But the latest “hiccup” to hit the still tenuous JAL-Marshall Islands relationship was a Ports Authority billing for landing fees that none of the tourism-related people wants to talk about publicly — but which was serious enough to spark a meeting with President Kessai Note late last week over concern that it could have a negative affect on JAL. Both the November flight and the group that arrived last Friday were smaller than the three previous charters earlier in the year — only about 100 full-paying passengers. Weza said that the Marshall Islands Resort used last week’s flight as a familiarization opportunity for JAL employees and others in the Japan tourism industry, which means very discounted rates for hotel accommodations. The lower revenue is a trade off with promotion: it gets more people involved from the Japan side clued into what the RMI can offer visitors. But this weekend’s flight that will be over the New Year’s holiday is “solid” with passengers, Weza said. Meanwhile, JAL has not scheduled any flights in January or February, with the first for 2008 now set for March 4-8. JAL sent a group to Majuro last month to evaluate the destination and to make recommendations about the airline’s long-term plans for Majuro. What many people may not realize is the extent to which dive and tourism entrepreneur Satoshi Yoshii is going to make the JAL charters a long-term reality. For any flight that is not filled, Yoshii covers JAL’s costs out of his own pocket. Local operations, including Yoshii, are also working hard to meet JAL needs. Weza said that JAL had asked Yoshii for upgrades on the dive boats and better-trained staff — both of which have been done. Weza said that it is always a challenge getting a major airline like JAL into a new destination. “The stakeholders (hotels, restaurants, visitors authority) are trying like hell to make it work,” Weza said, adding that support from government is also key to its success.
Taking Care of our Heavy Metals Majuro’s dump is ready to export its first shipment of scrap steel, reports Roger Cooper, general manager of Majuro Atoll Waste Company. “17.5 tons of scrap steel from the dump has been packed up into a container and is ready to depart Majuro come January 8,” said Cooper. An additional 60 tons, or three containers full of scrap steel, is expected to be packed up before the shipment date and sent to South Korea via an Australian company. According to Cooper, MAWC may just break even on the cost of exporting the scrap steels off island. “We expect these exports will have a minimum break even with a possibility of a little profit,” he said. Most of the scrap steel slated for export is from the dump but once that area has been cleared of scrap steel Cooper says they plan on targeting Majuro’s coast line. Cooper also reports that MAWC is in the process of negotiation with an off-island company to export a 20 foot container of car batteries. While the plans to export recyclable waste off Majuro is positive news, Cooper admits that the plan’s execution is heavily dependent on MAWC’s ability to get some funding for “desperately needed metal cutting and compacting equipment.” From the 12/21/07 issue of the Marshall Islands Journal We’re Watching the Fiber Optic Cable We have been reading about (and reporting on) the fact of substantial downsizing of the Kwajalein missile range operation, with more Americans (and a few Marshallese) leaving to Huntsville, Alabama as work of the range is “outsourced” to the US. The fiber optic submarine cable that is supposed to be in place by 2009 will further reduce the US presence at Kwajalein, allowing more of the missile work to be done from the US. The point here is that what we’re watching happening at Kwajalein has a direct negative financial impact on the RMI, as fewer Marshallese will be employed by a reduced US presence, and fewer Americans means fewer tax dollars going to the RMI government. So why are we participating in our own demise? First and foremost, under what provision of the Compact can the US government simply decide to run a cable through the RMI’s 200 mile exclusive economic zone? Here’s the current situation: the US government is going to install the cable to Kwajalein to improve communications there and reduce US presence there, reducing revenue to RMI. If RMI wants this cable that will revolutionize communications for Ebeye and Majuro, we’ll have to pay about $15 million, which will force the National Telecommunications Authority into further debt to the US. Isn’t there something wrong with that picture? We’d be the last to begrudge the US government improved communications. But if it wants to plug into a cable that is going to mean a long-term economic decline for the RMI, then we should at least get some benefit from the cable. Our simple suggestion is a trade. The US can have its cable, provided it delivers a branch to Majuro and Ebeye at no charge.
Ebeye Inflation up 6% Ebeye’s inflation rate grew at about one percent more than Majuro for fiscal year 2007, according to the latest consumer price index report issued by the government’s Economic Policy, Planning and Statistics Office. The EPPSO report said that Majuro’s inflation rate grew slightly over one percent for the last quarter of 2007 (July-September), giving Majuro a 5.3 percent inflation increase for the whole year. On Ebeye, prices rose by about 1.7 percent this past quarter, giving Ebeye an annual inflation increase of 6.14 percent, EPPSO said. Main features in the price increases during this last quarter for Majuro were price hikes in food, utilities (though lower than the third quarter) and fuel, which jumped from $4.45 a gallon to $4.75. For Ebeye, the main increases were in the housing/utilities/major appliances group, clothing and fuel. Food prices did not change significantly. For both Majuro and Ebeye, no price increases were noted for alcohol. Ebeye is still a more expensive place to live than Majuro, but the gap between the two is lower than a year ago. The government’s planning office has an 18-item “basket” for which it collects prices every quarter. The basket includes such staple foods as rice, flour, a variety of canned meats, sugar, ramen, soy sauce, kerosene stoves/lamps, kerosene, gas, cigarettes and mosquito coils. That basket cost $126.40 on Majuro in October 2006 and $154.70 on Ebeye. The percentage different was 22.4. The quarter ending September 2007, the same basket cost $130.60 in Majuro and $157.97 in Ebeye. The percentage difference between Majuro and Ebeye shrank slightly to 20.9 percent. From the 11/30/07 issue of the Marshall Islands Journal Imata Kabua Looks to China By GIFF JOHNSON Although the postal absentee votes are still to be counted, AKA party leader and former President Imata Kabua told the Journal late last week that former UDP Speaker Litokwa Tomeing will be the next President of the Marshall Islands, and once in power in January the new government plans to recognize China, ending a nine-year relationship with Taiwan. Kabua was President when the Marshall Islands switched diplomatic ties from China to Taiwan in 1998. But despite their earlier support for relations with Taiwan, both he and Tomeing say it’s time to adopt a “one China” policy recognizing the People’s Republic of China. But the decision may not be final. Despite talk from Aelon Kein Ad party leaders of an imminent switch of diplomatic ties from Taiwan to China if they win control of the Nitijela, Kwajalein Senator Tony deBrum told Reuters this week that AKA will continue to support Taiwan if it wins an expected 20 to 22 seats in the 33-member Nitijela and forms a new government. “There has been no change, no China item on our platform,” said deBrum, who describes himself “the architect” of his country’s nine-year-old relationship with Taiwan, Reuters reported. The RMI shifted to Taiwan in late 1998 when deBrum was finance minister under President Imata Kabua’s government. If the Aelon Kein Ad candidates’ leads hold up through the rest of the vote count, President Kessai Note will be out after eight years as President. By law postal absentee ballots from the thousands of Marshall Islanders living abroad cannot be counted until December 4. With many of the races decided by only a handful of votes, no results can be final until after the postal votes are tabulated starting this coming Tuesday. Bruce: ROC is a “True Friend of the RMI” By KAREN EARNSHAW If the Aelon Kein Ad party takes power in the Marshall Islands, according to Iroij Imata Kabua, it will recognize the People’s Republic of China, putting the country’s nine-year diplomatic relationship with the Republic of China (Taiwan) at serious risk. Responding to this possibility, the ROC Ambassador to RMI, Bruce Linghu, told the Journal this week that “of course this kind of news may sabotage our relationship with RMI, and this is of grave concern to us.” But Linghu emphasized that the ROC works with the elected government of each country it recognizes. Reaffirming ROC’s commitment to the people of the Marshall Islands, Linghu said: “There are many ways people here can feel we are a true friend. For nine years, I believe he have a given good help. “In that time we have done three or four hundred projects. I believe the people can see the goodwill and value of this help and also that our relationship is based on mutual respect.” On why mainland China is so eager for their ‘One China’ policy to become a reality, Linghu said: “It’s a doctrine; a dogmatic thing to the leaders. No-one can soften their attitude to Taiwan. It’s a national chauvinism. “The so-called One China policy is a myth.” In October, Taiwan celebrated its 96th anniversary of sovereignty. “Taiwan has prospered since the 1940s. It has become a modernized, democratic country enjoying freedom of speech and human rights.” In contrast, Linghu said that mainland China “has a big gap between the rich and poor. And maybe they should be spending more money on solving their over problems, including the living standards of their people ... rather than spending money making missiles that are pointed at Taiwan.” On China’s desire for the reunification of Taiwan: “China says that it wants one country with two systems, but Taiwan is not Hong Kong or Macau. They were colonies, we have our own constitution, sovereignty and military.” The Taiwanese government is planning on holding a referendum next year asking the people if they are behind having a seat in the United Nations. “We think it’s not justifiable that our 23 million people have had no representation at the UN since 1971,” Linghu said. “It’s really inconvenient to not be in the UN as it’s such an important organization. The referendum is to show the world that our people want international status. We want to be a contributing member of the international society.” Speaking on the history of China and Taiwan in the Marshalls, Linghu pointed out that it was Imata Kabua’s government that recognized the Republic of China in 1998. “At that point the Chinese walked out,” Linghu said. “They walked away from the Marshalls.” When asked if the AKA party wins the national election and chooses to support mainland China, will Taiwan walk away from the RMI table, Linghu stressed he wasn’t going to answer a hypothetical question of this nature. Instead, the Ambassador said: “We used to be good friends with AKA. “There’s no-one in government that we can’t work with. And we have always been appreciative of RMI’s efforts internationally.” From the 11/16/07 issue of the Marshall Islands Journal Bruce Bilimon: Together We Can Do It Ministry of Finance’s Customs and Revenue chief Bruce Bilimon wants to level the playing field for all businesses in Marshall Islands. And the way he wants to make it happen is through direct approaches with the head of each business to gain their cooperation. “Consultation is the way to go,” Bilimon told the Journal. “I want each manager to personally understand the process.” Since pushing a new import policy into place last month, Bilimon said that he’s met with the managers of most businesses here to explain the plan. Bilimon said he explains the conditions. “If you play by the rules, everything is okay,” he said. “If you break the rules, here’s the policy we follow.” Bilimon said the Custom’s office ranks businesses as low, medium or high risk, with a preference on speedy processing of imports given to the low risk group. “The treatment Customs provides is based on the data that they provide,” Bilimon said. Bilimon said when businesses send their lower level staff, he’s told them to have their top managers come by because “I want to meet face-to-face with the manager of each company so they understand the process. “If their company breaks the rules, that means (their next shipment will get) inspections. If they break the rules, they lose privileges.” The goal of this is to “level the playing field for businesses,” he said. “It’s not our intention to penalize businesses.” The message that Bilimon stressed he wanted get across to businesses is that “if they follow the rules, it’s good. If they do things illegally, there will be a penalty. “Some people say that it is impossible (to get businesses to cooperate). No, it’s not. It’s just because no one has tried. If I can get it to 80 percent (compliance) that’s great. The next guy can bring it to 100.” Will We Lose Guam Job Boom Opportunities? Opportunities for Marshallese workers may disappear with the plan of the US Congress to make it easier for Filipinos and other non-US citizens to get temporary work visas to work on Guam, the head of the Marshall Islands Chamber of Commerce said this week. Responding to a report in Pacific Daily News last week, Chamber President Jack Niedenthal said the opportunities for islanders from the freely associated states promoted by US officials at a big conference on Guam last month may not materialize. A US House of Representatives committee last week voted to exempt Guam and Saipan from the limit on “H-2” visas. Guam officials welcomed the development because Guam does not have the labor to support the estimated 15,000-20,000 extra workers needed for the upcoming construction boom for US military expansion there. The US limited H-2 work visas to just 66,000 nationwide, with Guam getting only 1,400 this year. The advantage that Marshallese and other freely associated state citizens have is they do not require work permits to enter Guam and the US. “If they loosen the visa restrictions it will limit the availability of FAS citizens to get better jobs on Guam,” Niedenthal said. He also expressed concern over the fairness of this proposed easing of the law in regards Guam and Saipan while Marshall Islands employers “have all these problems getting Philippine workers here. It seems unfair.” From the 11/2/07 issue of the Marshall Islands Journal Dash-8 Landing Gear Corroded Air Marshall Islands kept its two month run of bad luck unbroken this week, when mechanics discovered additional problems with the Dash-8 that mean it is not going to get back in the air anytime soon. Although the Dash-8 has been grounded since October 10, it wasn’t until Wednesday this week that mechanics found additional problems — corrosion — in the landing gear of the plane, which means the entire landing gear, not just some parts, need to be replaced. AMI general manager Dan Fitzpatrick called said it will result in a huge replacement cost and much more down time for the Dash. “It should have been known in the first few days after the plane was first grounded, not three weeks later,” he said. But this followed the equally “devastating news” that Fitzpatrick received earlier on Wednesday this week that a key part for the Dash that just arrived is the wrong one. Because of these new problems, AMI has changed its plan of action from attempting to get the Dash in the air first to getting the Dornier fixed. All the parts needed to fix the Dornier are here, and it could be in the air in as few as 10 days if “we get all hands on deck,” Fitzpatrick said. All of the mechanical woes have been complicated by the move from the old hangar and airport office area out to the lagoon side hangar, Fitzpatrick said. The computer that housed the parts inventory for the airline blew up when it was plugged in at the hangar, he said — just one of the problems they’ve faced. “I can’t believe our run of bad luck,” he said, adding that AMI’s woes since August have resulted in essentially two months of no revenue for the airline. EU Okays RMI Fish Exports A big breakthrough in talks with the European Union (EU) will pave the way for fish exports from the Marshall Islands for the first time. R&D Minister John Silk told the Journal Saturday that the opening of the EU market to the Marshall Islands and other small islands in the region promises a big economic boost for the islands. Up until last month, the EU — which represents 27 European countries — had set fish export regulations that prevented most Pacific islands from any possibility of ever exporting the one big resource available for export: fish. This is because the EU was demanding that for fish to be exported into the EU it had to meet “rules of origin” that included that 50 percent island ownership of the fishing boats and a 50 percent local crew. Silk said for the Marshall Islands and other small islands, this requirement prevented any possibility of exports to EU countries, despite the fact that fish handled and processed in Majuro is now being exported to the US and Japan. Marshall Islands Fishing Venture, which handles the export of sashimi-grade tuna from Majuro to the US and Japan, has for several years been keen to gain access to the big EU market. Last month, the EU negotiators changed their position, and dropped the requirement of 50 percent ownership and crew. “We’ve been negotiating with them for three years on this,” Silk said. “It’s a big breakthrough.” An agreement is expected to be signed next month that will open the EU doors to fish exports from the RMI and other islands. Silk said it has the potential for increasing employment to Marshall Islanders as the demand for fish transshipped out of Majuro will grow tremendously with the opening of the EU market. From the 10/26/07 issue of the Marshall Islands Journal Bishop Gives us a Jump on the Guam Jobs By GIFF JOHNSON US Ambassador Clyde Bishop wants Marshall Islanders to cash in on the economic boom that is about to strike Guam in the form of a $14 billion military expansion. “There is a need for a considerable amount of labor on Guam,” Bishop said to Finance Minister Brenson Wase last week during a Compact funding presentation. “I’d like to see the Compact states get the benefit.” There is an urgent need to get Marshallese trained so they have marketable skills in construction-related trades, he said. An estimated 15,000 workers will be needed over the next several years, and Guam does not have the population to provide this number of new workers, Bishop said. There is still time for Marshallese to take advantage of the opportunity, because the US military is now in the planning stages for relocating the 8,000 US Marines and their families from Okinawa to Guam. Bishop indicated the construction boom on Guam will kick in in about two years. Bishop attended the Department of Interior-sponsored Business Opportunities in the Islands conference held earlier this month on Guam, where he, along with the other attendees from the Marshall Islands including R&D Minister John Silk representing the national government, received an update on Guam military developments. Wase noted that Pacific International Inc. already had skilled workers who had worked on a variety of construction projects with PII on Guam. For non-skilled Marshallese, “we may need to restructure our vocational program,” he said, adding that the US-based Job Corps program has produced very highly skilled Marshallese graduates. Islanders from the RMI, Federated States of Micronesia and Palau have one big advantage over non-US laborers recruited from such places as the Philippines — they don’t need visas to enter Guam to work. “Bishop said this should make workers from the freely associated state nations “attractive to the contractors.” He also said that there is a push to get contractors to agree to designate a certain number of the estimated 15,000 new jobs for workers from the three island nations, Bishop said. “I’d like to see people (in the RMI) who are now sitting around looking at the ocean get trained and skilled so they can get jobs (in Guam),” he said. Construction companies and other firms that will be hired to develop Guam for the US military will likely try to recruit most of their labor from the Philippines, and may be seeking to increase the US quota for temporary visas for workers. But getting a visa in the Philippines now takes as much as six-to-eight months of lead time because of more stringent security precautions in effect — making recruitment of labor from RMI, FSM and Palau all the more attractive. Guamanians will get first priority for jobs, “but there are no where near the numbers needed for this project on Guam,” Bishop said. “There are still two years until the construction begins, so there’s time to train people,” Bishop said. “We need to increase awareness of the opportunity and then move to training. If we have the skill levels (in the RMI) I can’t see contractors not getting their labor from here.”
Internet for 3 Cents a Minute The National Telecommunications Authority is set to slash its Internet prices starting next Friday. NTA general manager Tony Muller told the Marshall Islands Chamber of Commerce in an email that beginning on November 2 through the end of February, NTA will greatly reduce Internet rates. “We’re doing the four month trial to see if the business volume and individual subscriber base increases as a result,” Muller told the Journal this week. He noted also that NTA was the only utility that has consistently reduced its prices to the public. NTA’s significant debt, with the possibility of additional debt for the new fiber optic cable, makes it extremely difficult for NTA to discuss changing prices, Muller said. During this trial period, regular dialup Internet, which now costs customers $3.60 per hour (or six cents a minute), will be cut by 50 percent to $1.80 per hour or three cents a minute Business rates for various speeds of Internet connection will also decline sharply. Muller said the following rates will apply for the different levels of business service: • 64kbps line will drop from $800 to $600/month. • 128kbps line will drop from $2,000 to $1,100/month. • 256kbps line will drop from $3,000 to $2,100/month. • 384kbps line will drop from $4,000 to $3,000/month. • 512kbps line will drop from $5,000 to $4,000/month. The NTA wireless system will not change from the current 10 cents a minute ($6/hour) charge. Wireless service is now available in the Marshall Islands Resort area, at NTA, RRE and its Shoreline area, Payless and Long Island Hotel area. Compared to Internet dial up service, which runs at a 56K pace, the wireless service operates at a speedier 512K pace. From the 10/19/07 issue of the Marshall Islands Journal Air Tugaru Rescues Stranded Divers By GIFF JOHNSON For the second time in as many months, scuba divers are being evacuated from Bikini Atoll, following the grounding of all of the national airline’s planes. The Bikini Atoll Dive program chartered an Air Tugaru Casa aircraft from neighboring Kiribati to get the eight divers off Bikini and back to Majuro. But lest you think a successful evacuation with an off-island air carrier is a foregone conclusion, think again. Air Tugaru flew from Majuro to Kwajalein early Tuesday, and — like Air Marshall Islands Dash-8 a week ago Wednesday — suffered a mechanical problem while on the ground at Kwajalein and was forced to abort the flight to Bikini and return to Tarawa, Kiribati for repairs. The Air Tugaru flight returned on Wednesday to collect the divers and got them to Majuro by early afternoon. But there is no indication when AMI will get its planes back in the air. The Bikini dive program has already cancelled the scuba dive group that was scheduled to fly to Bikini next week Wednesday because of the uncertainty about AMI service, said Bikini official Jack Niedenthal. Not everyone, however, was anxious to get off Bikini, according to Niedenthal and Bikini Atoll Dive manager Lani Kramer. Two divers from The Netherlands were enjoying their diving at the northern atoll so much that — despite the uncertainty over service by AMI and now Air Tugaru — they extended for another week. The fleet of World War II US and Japanese naval vessels on the lagoon floor has drawn thousands of divers to Bikini over the past 11 years. Niedenthal estimates the latest airline disruption will cost the Bikinians $50,000 in refunds to disgruntled divers — some of whom have come from as far away as Europe to dive on the World War II fleet of sunken naval vessels at this former nuclear test site. Coupled with the $100,000 that the dive program lost through cancellations and refunds following a halt to air service in August, the airline woes have cost the Bikinians nearly their entire anticipated profit for 2007, money that is used to support the islanders who 60 years after the first nuclear tests are still living in exile. “We were completely sold out from August to November,” said Niedenthal. Since the August stranding of divers at Bikini, there have been 27 cancellations of fully paid reservations and other divers who couldn’t get to Bikini had to be reimbursed, he said. “Although we have no control over the problem, it’s really hurting our reputation,” said Niedenthal. Both AMI planes were grounded with engine problems for three weeks in August and September, and have been down again since last Wednesday, October 10. In late August, the government was forced to dispatch its marine surveillance patrol boat to Bikini to bring back a group of visitors from Australia, Canada and Europe — a 36-hour trip over the open ocean. But Kramer said that the earlier group of evacuees actually enjoyed the extended boat ride back from Bikini on Lomor. “They said they loved the trip on the patrol boat,” she said. From the 10/12/07 issue of the Marshall Islands Journal ROC Spends Big on Majuro Summit By GIFF JOHNSON Taiwan is sparing no expense to ensure a successful second Taiwan Pacific Allies Summit this weekend in Majuro — and Marshall Islanders have been out in force beautifying Majuro for this weekend’s influx of international summit representatives. With the exception of Palau President Tommy Remengesau, Jr. and his delegation, everyone is being flown in by Taiwan government-chartered planes. Taiwan is chartering a Jetcorp Australia plane to fly in heads of state and their delegations from Nauru, Solomon Islands, Kiribati and Tuvalu on Thursday, bringing President Chen and an entourage or more than 120 on a China Airlines chartered airbus 340 on Friday, and then chartering a Continental Airlines plane to fly the presidents and prime ministers to the annual Pacific Islands Forum leaders meeting in Tonga that begins immediately following the three-day summit in Majuro this weekend. Palau’s delegation arrived on Continental’s regular flight Wednesday. It’s not only been a logistical challenge to get the delegations from five scattered island countries to Majuro, which is not on any air route from south of the equator. In addition, because of its small tourist base and few hotels, Majuro has proved a logistical challenge to organizers handling local arrangements because of the large number of summit attendees, media covering the event and security and other support staff. The visiting island delegations range in size from six to nine. The $5 million International Conference Center funded by Taiwan will be officially opened Friday morning to host the meetings. The magnificent meeting facility is a showcase addition to Majuro and while there may be a few construction details to complete in the weeks to come, Pacific International Inc.’s Herculean effort has produced a spectacular meeting venue in just seven months’ time. “We’re creating a Majuro miracle,” said Majuro-based Taiwan Ambassador Bruce J.D. Linghu. The last time the Marshall Islands hosted a similar, though bigger, regional event — the Pacific Islands Forum in 1996 — it had accommodation help from an Australian naval vessel that anchored in Majuro’s lagoon. This time, every hotel room at the Marshall Islands Resort, Long Island and Robert Reimers is booked out, with some of Taiwan’s advance staff having to double up or stay in ROC Embassy staff quarters. For organizers, the summit has come down to solving three transportation issues, which Linghu calls the “three dimensional challenge”: • Air transportation to get the delegations to and from Majuro. • Vehicles to move the VIPs and their delegations from airport to hotels to the conference center and to other events. • Boats for Sunday’s leaders fishing tournament — the latter, no doubt, the most easily solved. “Through good coordination we’ve gradually solved all the logistics,” said Linghu. Meanwhile, RMI government workers and many local residents have been hustling a big cleanup in preparation for the arrival of the many foreign dignitaries and the international media contingent. From the 9/28/07 issue of the Marshall Islands Journal Engine Checkup Rules Airline's Activity The Dornier operated by Air Marshall Islands is expected to be back in the air by this weekend, following the return of an overhauled engine from the US. Air Marshall Islands Dornier is the primary plane for servicing smaller runways throughout the country. It has been grounded since August 18, or more than five weeks, as mechanics have worked to find problems with one engine that caused the plane to be grounded. Transportation Minister and AMI board chairman Mike Konelios had told the Nitijela late last week that the Dornier was expected back in service on Wednesday this week, but a string of “hiccups,” unrelated to the Dornier’s engine, have delayed service until this weekend at the earliest. AMI general manager Dan Fitzpatrick told the Journal that the airline paid off a bill for a spare engine that was overhauled recently in Los Angeles, and that engine is in the process of being installed but because of an engine problem on the Dash-8, which caused the cancellation of flights on Monday, AMI mechanics were pulled off the Dornier to work on the Dash-8 to make it serviceable again. Following that, AMI’s mechanics were again unable to continue installing the Dornier’s engine on Tuesday because the portable generator AMI uses to operate at the new Airport hangar burnt up. In the next few days, two components from the engine on the plane that reportedly shut down during a flight on August 18 are to be sent off to the Los Angeles factory to be checked. Despite extensive tests by AMI mechanics since August 18, “all our ground tests have been negative for everything (the manufacturer) asked us to do,” he said. But to get the engine back in service, the airline has to have the manufacturer run tests on these two parts, which are expected to cost up to $15,000 each. AMI’s plan is to get these parts back after testing, fix the engine, and then reinstall it to replace the other engine that will soon be due for its regularly scheduled overhaul at the LA facility. This should minimize “down time” for the Dornier, he said. JAL Visit helps up Tourism numbers to 4,000 in 2007 In the first six months of 2007, nearly 4,000 people visited the Marshall Islands, according to data collected by the Marshall Islands Visitors Authority. This is a 55 percent rise on the same period in 2006 and is mainly a result of three Japan Airlines charter flights. The 3,842 visitors do not include yacht or fishing vessel skippers and their crew. Of this figure, 1,182 of the visitors are considered to be ‘true’ tourists (as opposed to business-related visitors), compared to 527 last year. The MIVA data shows an increase in the number of holiday visitors from Australia, Korea and Taiwan, but this trend will change in the second half of the year due to the discontinuation of Our Airlines flights. The MIVA statement continued: “On the bright side, the total number of Japanese travelers for the first two quarters of 2007 has already exceeded the amount for all of 2006 and JAL has scheduled another three charter flights before the end of the year with an anticipated 200 passengers for each flight.” The average length of stay for the holiday visitor was approximately five days with an estimated daily expenditure of $150. MIVA said this equates to “about $775,000 being injected into the local economy during the period.” From the 9/21/07 issue of the Marshall Islands Journal Allotments Don't Leave a Lot in Your Paycheck Can you imagine a paycheck in Majuro that doesn’t have money deducted for one or more allotments? Life in the RMI is generally one big allotment, particularly for government workers. On average, national government employees receive only 25 percent of their biweekly pay. That’s because the other 75 percent of the total $1.2 million biweekly RMI payroll bill is paid directly by the Ministry of Finance to banks, utilities and private businesses. But in the private sector not all companies provide allotment service to their employees. When Payless took over from Gibson’s more than two years ago, it stopped letting employees do allotments except to banks largely because it was a headache for the accounting staff. “It was a lot of work for our accounting staff,” said Payless general manager Jason Burgess. “That’s why we scrapped it when we took over and only deal with the banks.” Burgess said that the deductions required by the banks are “never too excessive,” so “we have no issues” with employee allotments to the banks. Another private business views allotments as a service to its workers. Momotaro Corporation’s Dennis Momotaro says “it’s a service we provide for our staff to make it more convenient for them.” Momotaro acknowledges that allotments create more work for the company and that he would rather give employees their full pay. But Momotaro’s decided to offer allotment services as a benefit for its employees. “It helps our employees,” he said. “For employees it’s harder for them to get around in a taxi to pay bills or go to the bank — this systems helps with their time. With allotments you have one check that covers the payments of 10, 20 or more people. Can you imagine the lines at the utility companies or the banks if everyone had to go make payments?” Pacific Basin Wholesale’s Michelle Stanley-Chutaro said, however, her company stopped allowing allotments last year because it came to the point where it began to “cross the line between parenting and being an employer.” She said she “chose not to be a parent.” Now time is saved on preparing payroll and she’s happy that Pacific Basin’s employees are managing their own finances. Maji and Map Vision stores have a slightly different policy on employees need for loans. Because of a high rate of staff turnover, Maji and Map Vision’s Leander Leander says his companies do not offer allotments. Instead they will offer advances on pay but only up to three weeks. Ace Hardware allows employees to have allotments and doesn’t limit how much an employee’s paycheck is applied to allotment. But manager Yuichi Yamaguchi says as a rule of thumb he makes sure that employees at least have $10 in their pay check at the end of a pay period so that employees can at least taxi to work the following week. Yamaguchi sees the allotment system as a way to help employees with their big purchases. “If they ask for an allotment and it’s possible we’ll allow it,” he said. Grant Labaun of G&L Enterprises said that, like Payless, he limits employee allotments to the banks. But he expressed concern about employees who allot out their paychecks to the point where they have only a few dollars — or pennies — in a paycheck. “How can you live with only $10 net pay?” Labaun asked.
Peleliu Visit Nets RMI $1.5 milion Worth of Smiles The 10-day humanitarian assistance visit of the USS Peleliu injected an estimated $1.5 million into the local economy, according to US and RMI officials. Navy statistics tell an impressive story of both economic and non-economic benefits for RMI’s approximately 52,000 residents, the US Embassy said in a release. US Navy doctors and medics, NGO volunteers and foreign medical staff performed 65 surgeries, provided dental treatment for 288 adults and 297 children, distributed 2,098 prescription eyeglasses, and treated more than 5,000 individual patients. The grand total of 20,470 medical services provided to the RMI included primary care, pediatric care, immunizations and prescriptions, the Embassy said. Navy SeeBee engineers completed a variety of construction and renovation projects. While the value of labor and transportation has not been calculated, the cost of construction materials alone totaled more than $162,000. Seven projects were completed on Majuro. On the outer atolls, the engineers installed nine solar panel systems at outer island health clinics. The systems include medical refrigeration units, AM transmitting radios, and lights. The nine include one on Mili Atoll, four on Maloelap Atoll, one on Aur Atoll, and three on Arno Atoll. The particular atolls were selected because they are all located within helicopter range of Majuro. While in Majuro, the Navy purchased port logistic services, including waste and garbage removal, local security support, cell phones and communications services, piloting fees, rental of vehicles and other equipment, and a variety of other services. The Navy calculates that a total of $600,225 was infused directly into the RMI economy, and another $300,000 worth of medical and construction materials was expended during the mission, the Embassy said. Significantly, these numbers do not include the pocket money that the ship’s company, some 1,600 people in all, spent at local businesses during their six days of shore leave. The Marshall Islands Visitor Authority has estimated a total, based on responses from only half of the businesses queried, of over $400,000. Capping off the visit on September 5, Project Handclasp donated 30 pallets of new clothing, medical supplies, toys, and schoolbooks. These were distributed to three RMI nonprofit organizations: RMI chapter of the Salvation Army, KIO Club and Marshall Island Council of NGOs. From the 9/14/07 issue of the Marshall Islands Journal Marshall Islands Chamber of Commerce Airs Concerns About Telecommunications in the RMI Chamber of Commerce members said they want telecommunications service that is quicker, less expensive, and more reliable. They also expressed the urgent need to extend Internet access to public and private school students from kindergarten to 12th grade. Senator Tomaki Juda Calls for NTA Competition By GIFF JOHNSON From the 9/7/07 issue of the Marshall Islands Journal Companies Hit Hard by Internet Woes By GIFF JOHNSON Government, business and private customers using NTA’s Internet and email system have been beset with a variety of difficulties since the company’s Internet server suffered a major problem at the end of July. But since August 23, virtually all emails containing attached documents either could not be sent or took days — instead of seconds or minutes — to arrive at their destination. This sparked numerous complaints to NTA, and Marshall Islands Chamber of Commerce president Jack Niedenthal said in a letter this week to Transportation and Communications Minister Mike Konelios “I have never received so many phone calls and complaints about the Internet and cell phone systems here in the RMI (during the past month).” The problem since at least August 23: NTA’s service became embedded in an Internet zone used heavily by spammers, which all Internet services globally filter out to protect their customers from the unwanted email. “The bottom line is that Internet Protocol (IP) addresses on which our mail server and gateways now reside is being blocked by many servers,” Muller said last Friday. “The end result is that NTA customers, especially the ones with attachments will be rejected by most Internet mail gateways.” On Monday, NTA general manager Tony Muller in an email for Chamber of Commerce members said “we are currently approximately 90-95 percent back to full capacity.” On Wednesday, further improvements were made but “.mil” — US Defense Department — addresses and a few others were still a problem and stuck in NTA’s server because they were still being rejected by the recipient Internet servers. NTA last week began changing its IP address, to avoid the spam rejection problem, but the process to change it and, more importantly, to get it recognized by Internet servers worldwide could take up to three weeks, Muller said Friday. Muller noted that NTA information technology staff had been working late nights to fix the problems, and Niedenthal told Konelios that “we very much appreciate these efforts,” though he added that “these glitches and problems have had an enormous impact on the business community.” Niedenthal also told Konelios that the Chamber is sponsoring a forum on telecommunications at next Tuesday’s business meeting at Marshall Islands Resort, in part to offer “ideas for making telecommunications better in the RMI, including the allowance of private sector competition with NTA.” He added that NTA’s Internet prices are “by far the highest in the Pacific” and the “business community would like to see this change as soon as possible.” Money Mover Opens The Western Union Company is expanding its services in the Marshall Islands with the signing of an agreement with the Marshall Islands Postal Service, the company announced late last week. “The partnership will further enhance our coverage in the Marshall Islands, connecting the people of the island state to the world and vice versa,” said Chris Cruzado, Western Union’s Pacific Islands director. “Doubling our partners’ location network in the Marshall Islands overnight demonstrates Western Union’s market leadership and our commitment to our customers in the region.” Partnering with Marshall Islands Postal Service adds three locations: in Ebeye, Uliga and Delap. At any of the Marshall Islands Postal Service locations, customers can buy Western Union money orders or send money by Western Union’s wire transfer service. “The Marshall Islands Postal Offices occupy prime locations across the islands, covering major business and tourism districts,” said postmaster Sailass Andrike in a statement issued by Western Union. “Our partnership with Western Union enables us to reintroduce the money order service, which has proven highly popular with our customers in the past, and to benefit more people directly by providing fast, reliable money transfer services conveniently where they live, work and travel,” Western Union’s services have been available in the Marshall Islands for over 10 years, through two existing locations in Ebeye and Uliga operated by agent Robert Reimers. From the 8/31/07 issue of the Marshall Islands Journal Loining Plant Update Construction work at the future loining factory in Majuro is on track to be completed by the end of September, according to company officials. Pan Pacific Foods (RMI) Inc., owner of the under-construction facility, will start testing its equipment next month, according to plant manager Don Xu. That testing is a key step prior to the plant being able to open and, depending on how quickly that moves, will determine when the plant can actually begin processing fish. Xu indicated that that the Marshall Islands Marine Resources Authority (MIMRA) is helping the company in a number of areas to speed the process. He said that the company hoped to begin recruiting local workers next month and then to begin a training process. He is also hopeful that Pan Pacific Foods will be able to hire some of the workers who worked at the loining plant when it was run by PMOP because he expects that they will have a higher level of expertise that will assist the plant in its operations. He reconfirmed earlier promises that the plant will be bringing in expatriates only as supervisory staff, but will hire all other labor locally. He said the company has just signed an agreement with a Philippines-based company to provide six supervisors to oversee equipment and production at the factory, as well as train local workers. He said he was hopeful that this group of supervisors will receive their work permits expeditiously, since the training program — which must be done before the plant can get into operation — depends on their arrival. From the 8/17/07 issue of the Marshall Islands Journal President Note creates Economic Council A new Marshall Islands Economic Development Advisory Council is being established to improve communication and the exchange of recommendations between the business sector and the national government. Last week, President Kessai Note asked the Chamber of Commerce to name two representatives and the Marshall Islands Business Association to nominate one member to the six-member Council. At Tuesday’s Chamber of Commerce meeting it was unanimously agreed that the president and vice president of the Chamber will represent the organization. That will put Chamber head Jack Niedenthal and vice president Hirobo Obeketang on the new Council. In a memo to the two organizations, Note asked them to fast track their nominations. “The sooner (nominations) can be accomplished, the sooner we can begin working together to help find solutions and recommendations to the economic challenges that we all face,” Note said. The Cabinet will appoint two members at large, and the sixth member of the panel is the director of the Economic Policy, Planning and Statistics Office who is Carl Hacker. The President said that the membership of the Council needs “to be able to take into consideration some of the views and ideas from business interests on Ebeye,” Note said. US Postal Service will be returning the RMI to a domestic postal designation As foreshadowed in last week’s state of the nation address by President Kessai Note and confirmed by US Ambassador Clyde Bishop at this week’s Marshall Islands Chamber of Commerce meeting, the US Postal Service will be returning the RMI to a domestic postal designation. USPS official Leo Tudela informed RMI and US officials on a recent visit to Majuro that the US plans “to reinstate domestic status,” Bishop said. But, he added, it will take about two months to actually implement the change. The move by the USPS to give the RMI international postal status has been criticized strongly by businesses here because of its negative impact on the economy. Senator Gerald Zackios, speaking to the Chamber this week, said the return to domestic status is “welcome” but he added a note of caution. “I hope that it doesn’t impact how Compact sector grants are used,” he said, adding his concern is if the US wants to take Compact funding to use to subsidize the USPS for the service here. “I hope that this (USPS service) is above and beyond Compact grants.”
From the 8/10/07 issue of the Marshall Islands Journal NTA Server Crashes An NTA Internet server crash over the weekend produced some high blood pressure for customers who couldn’t get their email over the weekend and required NTA technicians to work overtime to solve the problem. For three days, from Saturday through Monday, customers found it nearly impossible to download email and attachments sent through the NTA system, or to open NTA’s Tilmake web site that serves customers, both locally and when they are off-island. NTA’s Internet system, not noted for speed generally, was down to a snail’s pace before NTA was able to restore services on Tuesday this week. NTA technician Michael Sawej told local customers that files on NTA’s mail server were “corrupted” and “it was much faster to rebuild the server than try to find and recover corrupted files.” On Tuesday, Sawej said that NTA staff started working on the problem over the weekend and were “still tweaking” the system. NTA received numerous complaints from customers, among them local attorney David Strauss, who was in Honolulu when the problem started last weekend. Strauss said it was such a problem that he was forced to open a new “gmail” account to receive email communication through a different server. “I would like to apologize to all of you for the inconvenience and also would like to assure you that we are working hard to bring up mail services back to normal,” Sawej said Tuesday. From the 8/3/07 issue of the Marshall Islands Journal MALGov to Pay MISSA $1 Million In a key ruling in the MISSA lawsuit against Majuro Atoll Local Government, the High Court ruled last week for MISSA, finding that MALGov must pay the social security agency more than $1 million. The ruling orders that this money be paid to MISSA at a nine percent interest rate until paid off. MALGov owes MISSA $1,043,097.26. The suit was originally filed in 2004 against the current MALGov administration, but MISSA returned to court recently to get court help in getting MALGov to pay after MALGov filed motions in the court blaming its lack of ability to pay MISSA taxes on the Ministry of Education, Marshall Islands Resort, Pacific International Inc., and the RMI national government for lack of payment of taxes and other revenues. The ruling by Judge Richard Hickson also orders the Attorney General Posesi Bloomfield to halt his legal representation of the Marshall Islands Resort, and says the Ministry of Education must respond to MALGov allegations that it failed to pay promised education funding to the local government in the 1990s, which resulted in MALGov being unable to pay the social security taxes of teachers then under its authority. He gave the Ministry 20 days to reply. The judge’s ruling gives MALGov a foot in the door to possibly collect funding that was to be provided to the local government pursuant to a 1993 agreement with Education. In response to other motions by MALGov attorney Rosalie Konou, Judge Hickson denied her attempt to remove Marshall Islands Social Security Administration attorney David Strauss from the case. She had requested his removal because he also represents Pacific International Inc. (PII). But Hickson said there was no conflict of interest for Strauss to represent MISSA and PII. He also denied MALGov’s claims against both PII and Marshall Islands Resort that the two companies owe back taxes. Hickson said his dismissal of MALGov’s motion “does not of course prevent MALGov from enforcement of its (tax) ordinance or from referring the matter to the Attorney General for appropriate action.” The judge also directed AG Bloomfield not to continue representing the government-owned MIR hotel. This was because MALGov provided evidence that indicates that MIR may be collecting local government hotel room taxes while maintaining its position that it is exempt from paying the room tax to MALGov and therefore not passing this money onto the local government. “This evidence requires investigation by the Office of the Attorney General as to possible criminal liability,” Hickson said. Because of this, “it is inappropriate for the AG to represent MIR,” Hickson said, adding that Bloomfield could continue to represent the Ministry of Education and its officials. On MALGov’s claim that it is owed fines collected by the national government against fishing vessels using Majuro’s lagoon, Hickson said like MALGov’s claims against PII and MIR, they are not dependent on the outcome of the main claim and so must be dismissed.
From the 7/27/07 issue of the Marshall Islands Journal Subsidies Cost $3.7 million Government subsidies have averaged nearly $3.7 million annually from fiscal years 1997 through 2006. According to an EPPSO report, the lowest amount of annual subsidy given out to “public enterprises” was $2.3 million in FY2004. The high was more than $6.3 million in FY2002. The first three years of the Note administration, from FY2000, annual subsidies jumped significantly from the late 1990s. In FY2000, the government injected $5 million to government entities, in FY2001 it went up to $5.1 million and in FY2002 to $6.3 million. The subsidies dropped off significantly in FY2003, to $3.2 million, in large part because funding to Marshall Islands Development Bank was eliminated, and funding to Majuro Water and Sewer Company and KAJUR, Ebeye’s power company, was reduced dramatically. Subsidies declined to $2.3 million and $2.5 million, respectively, in FY2004 and FY2005, before popping back up to $3.4 million last fiscal year. The FY2006 figure ballooned because MEC was given more than $1 million more than it had received in subsidy in FY2005. Government entities receiving subsidies at some point from 1997 to 2006 were Air Marshall Islands, KAJUR, MWSC, Marshalls Energy Company, Marshall Islands Airports Authority, MIDB, Marshall Islands Ports Authority, Outrigger Marshall Islands Resort and Tobolar. Government Employee Growth There is some eye-opening information contained in the latest statistics provided by the RMI government’s Economic Policy, Planning and Statistics Office (EPPSO). On the government workforce, the report shows that: • The Ministry of Education grew from 472 workers in 1999 to 1,029 this year. • Public Works and Transportation and Communications ministries both increased significantly, though they declined somewhat over the past year. Public Works had 52 workers in 1999 and 91 this year (though it was as high as 115 in 2003), and T&C went from 33 workers in 1999 to 66 this year (though had as many as 108 in 2005). • The Judiciary went from 22 workers in 1999 to 41 this year. • The only two ministries or departments whose number of workers went down from 1999 to 2007 are the Ministry of Resources and Development and Council of Iroij. R&D dropped from 61 to 29 over the period and the Council went from 17 to 15. The R&D drop is accounted for largely by MIMRA staff being separated from the Ministry. The cost of government salaries jumped from $16 million in 1999 to $30 million last year. On average salary levels, the report shows that: • The five highest payment departments or ministries ins government are: Compact II capital $32,153, President and Cabinet $22,979, Public Service Commission $22,667, Foreign Affairs $22,419 and Nitijela $20,590. On cost of living in Majuro, EPPSO reports that: From the 7/20/07 issue of the Marshall Islands Journal New Bank to Open in Majuro By SUZANNE CHUTARO
From the 7/13/07 issue of the Marshall Islands Journal Kiwis to Bump up Trade Visiting New Zealand businesspeople and government leaders promoted trade ties with the Marshall Islands during a two-day visit earlier this week. 300 New RMI Jobs in 2006 By GIFF JOHNSON The Marshall Islands government has increased the number of people working for it by nearly 25 percent since 2004 — and nearly 50 percent since the late 1990s. From the 7/6/07 issue of the Marshall Islands Journal PII’s import tax flight A dispute over the Taiwan-funded convention center has broken out that could jeopardize completion — or quality of completion — of the facility prior to the Taiwan Pacific Allies Summit scheduled for October 12-16 in Majuro. Matson raises prices Matson Navigation Co. announced this week that it will raise its freight rates for the Republic of Palau, Federated States of Micronesia, and the Marshall Islands by $185 per westbound container, effective September 2, 2007, according to a report in the Saipan Tribune. From the 6/29/07 issue of the Marshall Islands Journal New RMI Postal Authority’s board of directors Begins Work The new RMI Postal Authority’s board of directors has launched its orientation and begun an initial review of postal operations. Micronesian Shipping Agency Inc. Going Out of Business A major player on the local shipping scene is closing up shop in a week, saying that there is not enough business in Majuro to sustain the operation. As of July 7, the Delap-based Micronesian Shipping Agency Inc. will no longer function in the Port of Majuro. From the 6/22/07 issue of the Marshall Islands Journal Government Accountability Office Questions Trust Fund Viability By GIFF JOHNSON There is an increasing likelihood that the RMI government’s trust fund will not have enough money in it to distribute the maximum level of funding allowed under the Compact after 2023 and may “be unable to disburse any income” at all in some years, according to a Government Accountability Office (GAO) report issued last Friday. Missa Pays Out $10 million Last year was MISSA’s first since 2000 that benefit payments and administrative costs exceeded tax collections. But the Marshall Islands Social Security Administration’s administrator Saane Aho told the Journal that the agency “does not expect any problems with cash” this year. In fact, she said, collections in 2007 are up and this allowed MISSA to invest $300,000 earlier this month with its US-based fund manager, Investor Solutions Inc. MISSA money matters FY ’02 FY ’04 FY ’06 Tax revenue 9.9 11.4 11.6 Note: Data provided by MISSA From the 6/1/07 issue of the Marshall Islands Journal Business of Politics VIPs to speak at Chamber events in June From the 5/25/07 issue of the Marshall Islands Journal JAL Tug Woes Mount Will Majuro lose the Japan Airlines charter service after just two flights? US Secretary of Interior will visit the Marshall Islands in June The US Secretary of Interior will visit the Marshall Islands in June as part of an island-hop through US-affiliated islands in the region. From the 5/18/07 issue of the Marshall Islands Journal Wilbur Replaces Jorelik A three-way move has RMI government secretaries shifting around, and is giving Internal Affairs its third secretary in four years. $10 part gets AMI in the Air The Dash-8 was down for five days, losing thousands of dollars in revenue for lack of a $10 part, confirming the difficulty of aircraft operations in this remote location. From the 5/11/07 issue of the Marshall Islands Journal General Fund Revenue up for 2007 General Fund revenues are about three percent up for the first seven months of the current fiscal year compared to the same period last year. Mission Imppossible: New News about the JAL Flights By GIFF JOHNSON From the 4/20/07 issue of the Marshall Islands Journal Tony Muller: 'The fiber optic cable is a go' From the 4/13/07 issue of the Marshall Islands Journal Mobil Oil Micronesia Sells Fuel to the Marshalls Energy Company to keep the Lights on Mobil Oil Micronesia has sold fuel to the Marshalls Energy Company for the first time since mid-2005, helping the power company keep the lights on in Majuro until the arrival of an SK Networks tanker this weekend. RMI? Where is that? Compact II postal problems continue to multiply for local customers. From the 4/6/07 issue of the Marshall Islands Journal WASC Gives the Majuro Cooperative School a Big Thumbs Up A visiting accreditation team from the United States gave Majuro Cooperative School a big thumbs up last week. RMI Gov Wrist Slapped by DOI By GIFF JOHNSON |