Pacific Island Nations Warn of Possible Opening for China Amid U.S. Funding Delay

Credits: Reuters

The budget impasse in Congress has led to a delay in crucial funding for three U.S.-allied Pacific Island nations, potentially making them more vulnerable to influence by China, including over Taiwan, their leaders have cautioned.

Palau, the Marshall Islands, and the Federated States of Micronesia, which were formerly U.S.-administered trust territories and are now independent states, maintain close ties with the U.S. through agreements known as Compacts of Free Association (COFA).

These agreements provide economic assistance and defense guarantees to the nations in exchange for exclusive military access for the U.S. in a strategically important area of the Pacific.

Pacific Island Nation Members (Credits: NBC News)

The security compacts, renewed for another 20 years last May, were supposed to be implemented on October 1. However, the $7.1 billion in funding has yet to be approved by Congress, despite bipartisan support.

The delay has caused uncertainty among the populations of these nations and has created opportunities for economic exploitation by other political actors in the Pacific, according to a joint letter from the leaders of Palau, the Marshall Islands, and the Federated States of Micronesia to multiple senators.

Congress has been unable to approve an emergency supplemental budget request that includes assistance for Israel, Ukraine, and Taiwan, among others, due to disputes. Funding for the three Pacific Island nations was initially included in earlier drafts of the budget request but was removed at the last minute.

The delay has also created economic uncertainty for Palau, which has faced challenges such as declining tourism even before the Covid-19 pandemic. President Surangel Whipps Jr. expressed concern that the delay could make China appear to be a more reliable partner.

He noted that Chinese investors have been making promises and that China’s economic incentives likely influenced Nauru’s recent decision to switch diplomatic recognition from Taiwan to Beijing.

Whipps emphasized the importance of Congress approving the funding for his country and the other Pacific Island nations, highlighting the strategic significance of the security compacts in countering China’s influence in the region.

The Biden administration has called on Congress to approve the funding as soon as possible, as without the security compacts, securing the same area of the Pacific would cost the U.S. $100 billion a year.

Whipps expressed hope for a successful conclusion to the funding issue, emphasizing the importance of democracy and freedom in the region.

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