Palau’s Whipps says renewed Compact is a ‘win-win’

With the approval of a funding package providing $7 billion to the signatory countries in the Compacts of Free Association, the Republic of Palau will be receiving a sum of $889 million over the next 20 years, according to Palau President Surangel Whipps Jr.

While attending the officers’ induction ceremony of the Palauan Community Association-CNMI last Saturday, Whipps shared that the bill, signed into law on March 8, 2024 by U.S. President Joe Biden, came at a much needed time.

Whipps said the Palauan economy had taken a severe blow from the 2020 COVID-19 pandemic, and the country had been borrowing money to keep the government running.

Whipps said that when they signed the agreement last May to renew the Compact agreement that allows the country to have a freely associated relationship with the United States, they had hoped to see the bill passed by Oct. 1, 2023, but that didn’t happen.

“We wanted it passed by Oct. 1 because we needed the funding to begin for this fiscal year, even though we weren’t technically eligible for it because our Compact doesn’t expire next year. …We had asked the United States to advance the Compact one year earlier so that we can start accessing those funds and stop loaning money and stop putting our kids into debt and being able to start recovery,” he told association members.

Aside from Palau, the other country’s that also have a Compact of Free Association with the United States are the Republic of the Marshall Islands and the Federated States of Micronesia.

On the bright side, Whipps said they were able to negotiate and have Palau receive $889 million over the course of 20 years, instead of the $400 million originally proposed by the United States under the Trump administration. “Just to give you an idea of how much of an impact that is, this year we’re only getting $2 million. So it really goes a long way to helping improve our schools, our hospitals, security, and really providing the economic stability to help us get out of debt and work to provide a more stable future for our children,” said Whipps.

As a part of the renewed agreement, Palauans living abroad, including those in the CNMI, will also be able to get some benefits, he said.

“There are also parts of the Compact that impact you here,” said Whipps “One is, I know that Palauans living outside the United States do not qualify for many federal aid…like food stamps, WIC [Women, Infants, and Children] programs, or assistance for the elderly. That is all available now. The other thing that is also very beneficial for Palauans is we now qualify for in-state tuition wherever we reside.”

Another improvement—one that Whipps said has been “a long time coming”—is help for Palau’s veterans.

He shared that, as many Palauan veterans return home, they find it hard to access their full medical benefits, making it difficult for them to get treatment in Palau and receive medication. They have to constantly fly out of Palau and go to a place where they can access their medical benefits, like Hawaii.

“This law has made it possible for them to receive these benefits while living in Palau. So hopefully that will help veterans return,” he said.

Whipps said they are hopeful that the Palauan economy is looking brighter and its economy is recovering.

“Last year for the full year, we had 41,000 tourists. That is almost 40% of what we were in 2019. Last month and in the month of January, we had almost 6,000 tourists so we are hopeful that, although the recovery is slow, the tourists are coming back.”

Whipps later said the improvements in the renewed Compact agreements is a win on both sides. “The agreement between Palau and the United States…was really a win-win for both sides. It addressed the needs, of course, there’s needs for security, but there’s also needs for economic security, and also climate change. So, we’re looking forward to a prosperous and better future. I like to say a partnership for peace and prosperity.”

Whipps also shared how grateful he was for the continued camaraderie between the CNMI and Palau governments, and the Palauan Association in the CNMI as they continue to not only represent but share the Palauan culture to their brothers and sisters in the CNMI. “We do recognize that we need to strengthen the bond we have with the CNMI.”