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The Contemporary Pacific 14.1 (2002) 198-203

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Micronesia in Review:
Issues and Events, 1 July 2000 to 30 June 2001

Marshall Islands

Kristina E Stege
Embassy of the Republic of the Marshall Islands, Washington DC

The Republic of the Marshall Islands coasted into the new millennium on a wave of change that brought with it a new government, high expectations, and hope for the future. President Kessai H Note, the first commoner to be elected president, and his cabinet promised accountability, transparency, and reform. The time-consuming task of transforming campaign promises into action frustrated supporters of the new regime and fueled its opponents. By July 2000, it was clear that change would come only with great effort. In the following year, the president and his cabinet faced political, economic, and social challenges that tested their leadership and power.

The new administration inherited a financial mess that forced its attention to the immediate problem of stabilizing the economy. The Asian Development Bank (ADB) reported that medical referral payments, tax cuts, and soaring fuel prices contributed to the government's budgetary crisis (MIJ, 26 Jan 2001, 9). A glut of tuna on the market and record low copra prices did not help matters. Making payroll and providing basic services became top priority. In a policy shift, the government [End Page 198] reestablished a close working relationship with the bank, negotiating a loan of nearly $12 million to address the short-term money crisis and help in implementing longer-range reforms. Government finances were on shaky ground until the loan was approved in June 2001 (MIJ, 24 Nov 2000; 22 June 2001, 3). The government will gain firm financial footing only in October 2001 when annual debt payments, currently about $20 million, end and US assistance increases under the two-year compact extension period.

A US General Accounting Office audit highlighted the lack of accountability for compact funds, and strengthened the government's resolve to reform. Government agencies scrambled to get their books in order. The Social Security Administration pulled the most dramatic turnaround, bringing books up-to-date for the first time in three years. The overdue audit identified fifty-two problems and hundreds of thousands of dollars in questionable expenses in the late 1990 s before the Note government took office (MIJ, 30 March 2001, 4). President Note appointed a Task Force on Accountability to investigate these and other abuses. Although the task force submitted the first two in a series of reports to the cabinet in March 2001, the public release of the reports was delayed to allow for more investigation.

After just one year in office, President Note faced a new challenge, this time on the political front. Backed by former President Imata Kabua and led by former Minister Justin DeBrum, the opposition party staged a vote of no confidence. High winds and waves hit the capitol even as the no confidence proposal hit the floor. People were forced from their homes as Majuro endured its worst flooding since the early 1990 s (MIJ, 1 Jan 2001, 4).

In the parliament two days later, the no-confidence motion failed by a vote of 19-14. The opposition party appeared poorly organized and offered no concrete improvements on the status quo. In comparison, a politically savvy cabinet used procedural rules to ensure that the vote be conducted by roll call instead of by secret ballot. Senators tempted to switch sides now had more reason to stay with the governing United Democratic party. Senator Ataji Balos from Kwajalein surprised everyone by voting to support the president's party against fellow Kwajalein senator, Imata Kabua. The break in ranks underscored the administration's victory. Nevertheless, as President Note said after his victory, the proceedings were a "wake-up call" for his administration (MIJ, 1 Jan 2001, 6).

The cabinet still faced the criticisms that contributed to the vote of no confidence. While the vote failed, opposition senators did succeed in pointing out the administration's slow progress on a host of issues, including health, education, transportation, compact renegotiation, and accountability. However, the president's affiliation with...


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