AUCKLAND: Lawmakers in Washington have taken a crucial legislative step to pay three billion dollars to two of the world’s smallest states, once crucial to America’s Cold War effort.

The US House of Representatives last week approved the sum over 20 years for the Federated States of Micronesia (FSM) and the Marshall Islands, whose tiny atolls dotted across the Pacific have a combined population of just 164,000.

But the Compact II package, which needs Senate approval, represents a sharp drop in real terms from the three billion dollars over 15 years granted in 1986.

After 60 years of funding the islands since their liberation from Japan, “it is now clear that Washington would like to see its aid come to an end”, said Jesuit priest Francis Hezel, a FSM resident and veteran social commentator on the islands.

“Geopolitics counts more than anything else in determining compact funding,” he said.

Both island groups were Japanese-held from 1914-1945, when they became United Nations Trust Territories under US control.

Washington used the Marshalls to test its nuclear weapons, to the continuing severe detriment of the local residents.

After independence in 1986 Washington was anxious to deny Soviet access to the islands, and in the case of the Marshalls, retain its crucial Kwajalein Atoll strategic missile-testing base.

Independence was negotiated around a “compact of free association” which gave self-governance in return for guaranteed US access and payments to both states over 15 years amounting to around three billion dollars.

The US has continued its funding of the islands partly out of a sense of ensuring access to once strategically important islands and also out of a sense of historical obligations and ties.

But Hezel said in an interview from Pohnpei in FSM that it was clear Compact I did not bring the economic success Washington had hoped for.

He said Washington did not seem to have any sense of responsibility towards its former colonies.

“They seem to think you can get a country and economy and develop it in a given amount of time and say, ‘adios’.”

Under Compact I around 35,000 people have left RSM and RMI to live in the US — more than 4,000 of them attracted to the chicken processing industry in Arkansas.

“The portals to the US ... remain open,” Hezel said, warning that residents would continue to flee economic hardship in their Pacific homes.

“Thousands of others will follow unless they find what they’re looking for at home.”

Both nations face the reality of being MIRAB (migration, remittances, aid and bureaucracy) economies, he said, with those left behind becoming dependent on money sent by their emigrating relatives.

FSM is composed of 607 small islands extending over a large area of the central Pacific. Four states, Chuuk, Kosrae, Pohnpei and Yap, make up the federation with a population of 108,000. The Marshalls, made up of atolls including Bikini, Enewetak, Kwajalein and Majuro, has 56,000 people.

FSM faces internal pressure with Chuuk, home to just over half the population, exerting political and cultural domination over the other three states with the possibility of break-up looming.

“We’re now thinking the unthinkable,” said FSM President John Hagelegam.—AFP