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Compacts of Free Association Federated States of Micronesia Republic of the Marshall Islands

Compacts of Free Association Federated States of Micronesia Republic of the Marshall Islands. Office of Insular Affairs U.S. Department of the Interior. Level and Structure of Assistance. Goal – supporting increased self-reliance of FAS $3.5 billion U.S. commitment over 20 years

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Compacts of Free Association Federated States of Micronesia Republic of the Marshall Islands

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  1. Compacts of Free AssociationFederated States of MicronesiaRepublic of the Marshall Islands Office of Insular Affairs U.S. Department of the Interior

  2. Level and Structure of Assistance • Goal – supporting increased self-reliance of FAS • $3.5 billion U.S. commitment over 20 years • Direct Grants – $125 million per year • Trust Fund Contributions - $34 million per year • Targeted Sectors – Education, Health, Public Sector Capacity Building, Private Sector Development, Environment • 30% set-aside for construction of public infrastructure facilities with priority on supporting delivery of education and health services

  3. Program Management • The RMI and FSM governments are responsible for the management and monitoring of the day-to-day operations of all Sector grants and their activities. • Interior is not charged with program delivery. • Interior has limited resources for oversight. Compact program funding is not dedicated to oversight. • Interior supports (with limited funds) targeted technical assistance throughout all insular areas. • Comparatively, USAID allocates between 8%-15% of program funds for delivery, administration and monitoring of its programs.

  4. Target: Accountability and Self-Sufficiency • Security, political independence, and stability was achieved – Compact 1987-2003 • Economic provisions are not designed to guarantee results but rather to enhance opportunities. • Accountability standards under “Compact 2”are greatly enhanced- they have not translated into better outcomes or overall performance. • Sector grants are not directly targeted toward increased economic self-sufficiency. • Still, increased self-reliance, at whatever level may be attained, is expected as of FY 2023.

  5. Challenges • FAS political and social conditions challenge, respectively, effective compact grant implementation and better health and education performance. • Success is immensely reliant upon: • Commitment of our FAS partners to design and implement fiscal and economic policy reforms; • FAS Capacity to manage, implement and administer available resources; • Political courage to realign resource allocations to match stated policy objectives; • Quality of the partnership

  6. Where do we have influence? • overall quality and use of professional design standards for infrastructure projects. • minimally on what is happening inside the classrooms. Requiring qualified teachers and supplies in the classroom, allocation of funds toward basic instruction.

  7. Tools • Country level diplomacy: voice of the Ambassador and the USG country team • JEM committee control of sector allocations (thumbs up/down) • Leverage at the margin in special cases • TA targeted at identified weaknesses • Donor coordination

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