24 Sep 2007

Marshall's budget relies on US and Taiwanese aid money

10:51 am on 24 September 2007

The Marshall Islands has approved a US$123 million national budget that depends for 70 percent of its revenue on United States and Taiwan aid.

The Finance Minister, Brenson Wase, expressed concern about what he called bloated government wage costs.

He said the increasing government wage bill was absorbing more budget dollars, and limiting government cash flow and


The government's wage bill has nearly doubled since the late 1990s, rising

to nearly 30 percent of the government's budget this year.

The U.S. is the biggest aid donor, providing US$75.5 million dollars.

That includes a US $9 million contribution to a trust fund that is aimed at providing an alternative source of income when U.S. grants end in 2023.

Locally generated revenue is sparse, with

fishing licenses accounting for about US$ 2 million and a flag of convenienceship registry adding another US$2 million.

Mr Wase raised concern that more than half of Taiwan's US$5.5 milliondollar development project funding will this year go to cover ongoing government spending instead of being used to develop the economy.