Palau accepts Uighurs amid review of key US accord

KOROR, Palau — Palau’s decision to take in 13 Guantanamo detainees is a humanitarian gesture from a country that prides itself on welcoming society’s castaways.

It also appears to be about the money.

President Johnson Toribiong has repeatedly denied that this tiny Pacific archipelago stands to benefit financially in exchange for accepting the Chinese Muslims, known as Uighurs. But the arrangement coincides with the start of talks to review the agreement that governs Palau’s relationship with the U.S. — its most important strategic and financial benefactor.

Under the Compact of Free Association, Washington’s aid to Palau from 1995 to 2009 is expected to exceed $852 million, according to a report last year by the U.S. Government Accountability Office. It includes direct funding as well as access to U.S. postal, aviation and weather services.

It also paid for a massive, nine-year public works project to build a 53-mile (85-kilometer) road that loops around Palau’s biggest island.

U.S. aid to Palau, a former U.S. trust territory about 500 miles (800 kilometers) east of the Philippines, is vital to the tiny island’s economy. From 2000 to 2006 it accounted for more than one-third of Palau’s revenue.

Key parts of the compact, including the section on direct assistance, are facing a mandatory 15-year-review and will expire Sept. 30 unless they are renewed. Negotiations on the compact began in early June and are ongoing.

“Any independent thinking person will say (the Uighurs) will have an effect (on the compact review), despite the fact that the politicians say it has nothing to do with it,” Joshua Koshiba, head of Palau’s negotiating team with Washington, said Monday.

Palau is one of the world’s smallest countries, with some 20,000 people scattered over 190 square miles (490 square kilometers) of lush tropical landscapes. Its economy depends heavily on tourism and foreign aid from the U.S., Japan and Taiwan.

The island made headlines last week after agreeing to President Barack Obama’s request to take the 13 Uighurs after other countries turned Washington down.

In the midst of aid discussions, the country is using the Uighurs to remind Washington that it is a loyal friend and ally. It could also benefit from a credibility boost after the GAO released an unflattering assessment of Palau’s management of U.S. aid.

A GAO report last year cited “persistent internal control weaknesses over financial reporting,” and said Palau had trouble addressing the accounting issues because of its limited access to resources and expertise.

Koshiba acknowledged Palau’s financial missteps, saying, “with so much economic aid (the U.S.) gave us, I guess we were not that good at implementing them right.”

“We did spend the money, but we spent on things that were not essential to the growth of the economy,” he said, citing the construction of traditional meeting houses — or “abais” — that boosted cultural pride but are not used.

Koshiba, a former senator, blames both his country and the U.S., which he says provided little guidance — something he says Palau needed after living under foreign rule since the late 19th century. The GAO also noted that the U.S. Department of the Interior’s oversight of funds to Palau was limited.

In talks with Washington now, Koshiba said he will seek advice and expertise to go along with new aid.

For its part, the U.S. says it remains committed to Palau and its island neighbors as critical strategic footholds to maintain global security.

Mark Bezner, charge d’affaires for the U.S. in Palau, said the compact has “worked well” so far and he expects only minor changes.

Palau’s president traveled to Washington in March and met with U.S. Secretary of State Hillary Clinton and lawmakers, seeking support for continued financial aid to Palau.

“That was when Palau sort of got onto the mental map of people in Washington,” Bezner said.

Less than three months later, the U.S. turned to Palau to host the Uighurs.