Palau asks for more US aid after Gitmo deal

KOROR, Palau — Palau is asking longtime benefactor the United States for a 35-year extension on direct aid funding — and hinting Washington should say yes because of its offer to take in 13 Guantanamo Bay detainees.

Both Palauan and U.S. officials have denied any direct link between the country’s willingness to take in the Chinese Muslim Uighurs and American aid.

But Palau negotiators say they are proposing the extension in a formal 15-year review of the Compact of Free Association between the two countries that underpins the tiny island state’s economy.

The latest round of talks are due to open Wednesday in Hawaii, with a final round due in Palau in September.

U.S. government aid to Palau over the past 15 years has totaled more than $852 million, according to a congressional estimate.

“Palau needs a little leniency from strict implementation of the terms of the compact,” Palau President Johnson Toribiong told The Associated Press this week.

Toribiong did not specifically mention the Uighurs. But the head of Palau’s negotiating team, Joshua Koshiba, said the offer to take the Chinese detainees was “a positive for the negotiation” on the compact.

“I can point my finger at them now and say, ‘See, we are helping you too, without asking for help only,’” Koshiba told AP.

If the U.S. doesn’t agree to Palau’s new terms, Koshiba said, his country will weigh its options.

“When you have a friend, if they don’t want to be your friend anymore, what do you do? Don’t you look for another friend?” Koshiba said.

Toribiong conceded, however, that Palau has no better ally than Washington, and that “If the U.S. says no, we will still remain close friends and allies.”

Mark Bezner, the top U.S. official in Palau who will also take part in the talks, called the extension request “a radical departure” from previous discussions but said Washington would consider any proposal made by the Palauans.

The Uighurs, Turkic Muslims from China’s far west, have been in U.S. custody since their capture in Afghanistan and Pakistan in 2001. The Pentagon determined last year that they were not “enemy combatants,” but they have been stuck in legal limbo ever since.

China considers them separatists and has demanded their return for trial. U.S. officials fear they could be executed if they go back to China. The situation has become even more sensitive since ethnic tensions soared this week between Uighurs and majority Han Chinese in the Muslim home territory of Xinjiang.

Palau last month agreed to take Uighur detainees as part of President Barack Obama’s plan to close Guantanamo Bay.

In the highly charged and often aid-driven competition between China and Taiwan for diplomatic recognition among impoverished Pacific countries, Palau recognizes the island that Beijing regards as a renegade province.

A major shift in Palau’s geopolitical allegiances is unlikely in the near future.

U.S. links to the cluster of islands that is now Palau dates back to the Spanish-American war. The United States became administrator after World War II, and the compact has been in been in effect since 1994 when Palau became independent.

More than one third of the micro-state’s budget comes from the compact, and the U.S. remains responsible for the defense of the country, located about 500 miles (800 kilometers) east of the Philippines.

Palau’s roughly 20,000 people are also bound to Americans culturally.

English is one of two official languages, the U.S. dollar is the local currency and the judiciary relies heavily on American rules. Even the food is heavily U.S.-influenced, from a popular American-style diner owned by a paramount Palauan chief to the wide selection of Spam available on grocery shelves.

As well as direct cash payments, the figure includes postal, aviation and weather services, federal education and health care grants, and a trust fund seeded with $70 million from Washington.

Palau is supposed to withdraw $15 million annually from the fund beginning next year in a deal intended to last for 35 years.

But the U.S. has been battered by the global economic downturn and the fund could go bust as early as 2016, the U.S. Government Accountability Office said in a report last year.

Washington has already signaled further help for Palau. Bezner said the U.S. is open to making sure the trust fund will last the full 35 years, and a recent Palauan request for $18 million in aid for next year is awaiting authorization in Congress.

(This version CORRECTS Corrects the date that the compact came into effect, to 1994, in graf 18. The talks are scheduled to begin at 9:00p.m. Wednesday local time in Honolulu, 1900 Wednesday GMT, 3:00 p.m. EDT)