-->SEPTEMBER 1, 2010 - WHAT RMI SIGNED THIS MONTH:
US JEMFAC members statement regarding non-compliance with Resolution 2009-1 Notwithstanding Resolution 2009-1, the RMI has not submitted a plan for managing annual decreases in Compact direct assistance and/or general fund support and, there is now some question as to whether the RMI will be able to use such a plan as the basis for Fiscal Year 2012 budget decisions or evaluate the ability of the health and education sectors to fulfill their strategic outcomes in fiscal years 2012-2014.
In light of this and in fulfillment of their obligations under the Fiscal Procedures Agreement, the US JEMFAC members propose Resolution 2010-1 requiring a report in greater detail over the medium term through Fiscal Year 2014 for consideration.
Resolution JEMFAC 2010-1 Long-Term Fiscal Planning
JEMFAC resolves that the RMI Government shall develop a report that addresses the broad range of fiscal challenges facing the RMI, which was in part the subject of JEMFAC Resolution 2009-1. Since efforts to date have not led to the timely submission of such a report prior to the August 1, 2010 deadline, JEMFAC hereby provides a list of issues to be addressed in such a report for the review of JEMFAC.
In no order of importance, these fiscal challenges include, but are not limited to: The possible need to make adjustments in outcomes or objectives to take into account the impact of the decrement in the medium term
● Unsustainable growth trends in health and education expenditures, including rapid growth of wages in these two sectors;
● Evidence of unmet needs in critical service areas of government, especially in health and education;
● Unsustainable growth in government wage bills, including both Compact-funded areas and all or most other areas;
● Limited progress on broad-based tax reforms and limited increases in other revenue categories
● Apparent political obstacles to achieving sustained, broad-based tax reform (as opposed to narrow, and potentially inefficient, tax increase measures);
● The decline of Compact funding in real terms, by design, due to the partial inflation adjustment;
● The further decline of Compact funding in real terms, again by design, due to the annual decrement;
● Stagnant or declining economic activity;
The report shall also address other factors of importance, which may either worsen or lessen the evident fiscal challenges. These shall include, but would not be limited to:
● Population trends;
● Demographic and service delivery requirement trends;
● Remittance levels and trends; to the extent such data is available;
● The current levels of assistance from other donors.
Finally, the RMI shall demonstrate that the process of developing this report shall be inclusive of policy makers at all levels of government, across sectors. The outcomes of the report relating to fiscal challenges should link to a specific course of action, including plans and necessary policy reform commitments.
JEMFAC further resolves that the RMI shall report on its progress at the mid-year JEMFAC meeting in February, 2011. The failure by the RMI to complete a plan as described above will result in appropriate remedies.
-->FLASHBACK: SEPTEMBER 1, 2009 - WHAT RMI SIGNED LAST YEAR
In Resolution 2009-1, JEMFAC resolved as follows: Sustainability of Sector Grants
JEMFAC resolves that the RMI Government develop a plan for managing annual decreases in Compact direct assistance and/or general fund support.. RMI submit its findings and plan through the Office of Insular Affairs to JEMFAC not later than August 1, 2010...
-->SEPTEMBER 10, 2010 - WHAT RMI'S MINISTER SILK SAID TO THE JOURNAL
MIJ (Silk acknowledged that the RMI agreed to do this plan last year, but there was confusion over who was in charge of the report in the RMI and) â€œwe got a late start in developing the plan because we were awaiting the final audited financial numbers from last year which were not available until June.â€
(Silk said he does not believe this statement refers to withholding funds )â€œbecause withholding would not be an appropriate remedy in this situation. I donâ€™t believe this will be an issue in the future, however, as the government is fully engaged in managing the decrement (decline in Compact funding), and the sustainability of Ministry of Health and Education activities.â€
...â€œWe voted in favor of these resolutions this year because we voted in favor on the same issues last year,â€ said Silk. â€œAddressing these matters are just part of good governance, and we should be doing these things anyway regardless of the US. This is what it means to take ownership of the Compact.â€
JEMFAC FY-11 RESOLUTIONS
- text of resolutions signed by US and RMI on September 1, 2010
"Promoting more information disclosure by the public service, rather than secrecy which may allow corruption to be hidden" -
from Nitijela UN Workshop Outcomes Statement, Feb. 17, 2011