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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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