Marshalls questions US role

in promoting ADB loans

THE Clinton Administration is undermining the economic security of the Marshall Islands by pushing Asian Development Bank loans in the island nation, according to Foreign Minister Phillip Muller.

His criticism of the US role in the large ADB loan pro gram for the Marshalls is the latest move by the Marshall Islands to take control of economic decision making. This comes in the face of the heavy influence exerted by ADB policies and consultants since an ADB-funded government reform scheme was launched in 1995.

The economic health of the Marshall Islands is essential to US military interests in the islands, a point confirmed by provisions of the Compact of Free Association.

In it, the US recognises the need for economic advance ment to support the security interests of both countries,

Muller told a US Congressional committee in May. But the ADB, a lending institution that the Clinton Administration supports in the Marshall Islands, is a “major fac tor that undermines the economic security of the Marshall Islands that US military security depends

upon,” he said. “The large scale of the loans, the enormous debt burden the Marshall Islands is accruing, and the rec ommendations to rapidly reduce our public sector desta bilises the Marshall Islands’ economic security.”

He asked the Clinton Administration to stop “promoting a lending program that undercuts the bilateral US-Marshall Islands relationship” and to allow the Marshalls to take the lead in its financial dealings with the ADB.

Two ADB loans, Muller said, worth close to $2O million, “have proven totally useless” strapping the country with loan payments for failed projects.

“If economic development is a prerequisite and integral component of military security, then the Marshall Islands government is at a loss to understand why the US govern ment pushes ADB loans in the Marshall Islands,” Muller said. ■