The Marshall Islands has been advised that it is facing the risk of a major financial crisis when United States grant funding ends in 14 years.
The President Jurelang Zedkaia and his cabinet have been told by the International Monetary Fund to put an additional nine million US dollars a year into the national trust fund to prevent an economic crisis when the Compact of Free Association with the US ends in 2023.
Our correspondent Giff Johnson says cuts may now have to be made in payrolls and ministers' allowances or the implications will be worse.
"It would have to drastically cut back the government workforce presumably in a sudden manner because it would be 16 million dollars short in funding. There's no question there's a huge risk if things aren't done."
Giff Johnson says the IMF has recommended to the government to start by saving an extra two million dollars this fiscal year and increase it gradually.