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Pacific islands renegotiate US payments

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Washington's hands-off approach to the grant payments it has sent to the Marshall Islands and Federated States of Micronesia (FSM) over the past 15 years is widely regarded as a failure. But those grant payments to the former US wards will expire in 2001. Sources in all three countries say the United States has a chance to set things right as it negotiates the provisions.

"The US is willing to help us, but there should be more restrictions on how we spend the money," says Vincent Figir, governor of Yap State, which is generally considered the most effective government in the region.

"There wasn't enough accountability or strings attached [to the US money], so far too many people decided they would benefit personally," Mr. Figir says.

US negotiator Allen Stayman has been sending a message in a similar vein. "We want to know what happened over the last 13 years before we make any decisions about the future," he says. Key congressional leaders have asked the Government Accounting Agency (GAO) to go to the region and assess how the US grants were spent.

Until the GAO gets answers, Mr. Stayman says it's "premature to be talking about future aid."

Sen. Peter Christian, the FSM's negotiator, says his country welcomes the opportunity to explain itself. "We spent the first 10 years of the Compact just organizing a system of government," he says. "Now we have the time, experience, and institutions to focus on economic development.... I think we're on the right track."

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