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US budget fight could create opening for China in the Pacific
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US budget fight could create opening for China in the Pacific

 A 45-day stopgap measure given by the U.S. Congress to prevent a government shutdown has left capacity of funding shortfalls for strategic Pacific island states, which analysts and previous officials say leads to the U.S. allies economically delicate and also more receptive to Chinese approaches. The Biden administration had  aimed and wanted to see Congress win by Sept. 30 new 20-year funding programs for Micronesia, the Marshall Islands and Palau, which after years and years of relative neglect currently discover themselves at the center of a U.S. battle for impact with China in the Northern Pacific.

The spreading but barely populated countries have collaborations with the U.S. ruled by well known Compacts of Free Association (COFAs), under which Washington is taking full charge for their defense and gives  economic help, whilst taking exclusive military access to strategic swathes of ocean. The funding programs for the Marshall Islands and Micronesia were due for renewal by Sept. 30, and by the end of fiscal 2024 for Palau, and Washington agreed this year on a new package of $7.1 billion over 20 years, subject to Congressional approval.

The stopgap “continuing resolution” (CR) that hindered a federal government shutdown does not involve agreement for this fresh program, however, and whilst it maintains federal services to the COFA states, it leaves holes in other parts of their budgets. “Whilst keeping the services going is a prominent  assurance, the CR will make things extremely tough in the Marshalls (which has an election on November 20) and Palau (election next year),” said Cleo Paskal, an expert on the COFA states with the Foundation for Defense of Democracies think tank.

“Both are nations that understand Taiwan and are prominent components of U.S. defense architecture in the Pacific,” she said. “Watch for raised (Chinese) political warfare spin around the U.S. being an unreliable partner.” Paskal said Palau’s funding under its existing COFA had dwindled as it went near its final year and it had been banking on funds from the fresh package to support in order to cover budget deficiencies. Paskal said Palau’s economy had already been majorly impacted from COVID-19 and Chinese economic involvement aimed at forcing it to switch diplomatic recognition from U.S.-backed Taiwan to Beijing.