Economy & Budget

US should rethink costly migrant aid in the West Pacific

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As comprehensive policy failures go, it may be the best-kept secret in Washington, D.C.

The Compact of Free Association (COFA) provides special privileges and benefits to the people of Micronesia in exchange for access by the United States military to the Marshall Islands, the Republic of Palau and the Federated States of Micronesia. The deal includes the U.S. sending about $230 million in foreign aid every year to help the approximately 200,000 people of the Western Pacific region.

{mosads}The result of all that aid money?


One is a crumbling healthcare system that is inadequate to serve the needs of the island populations. A second is an education system that gets 90 percent of its funding from the U.S., but graduates only 50 percent of Micronesians who attend the island high schools. And the third is heavy dependency on foreign aid with no prospect of generating local economic prosperity anywhere in the region.

There also is a troubling lack of accountability and transparency in the way U.S. aid money is spent in Micronesia. The problem is so bad that the U.S. Government Accountability Office, tasked to review the use and accountability of U.S. funds spent there, could point to only multiple instances of noncompliance with program requirements and a near-total absence of reliable data to assess progress towards funding goals in education and healthcare.

The district capitals in Micronesia are described as “semi-modern slums,” where unemployment is rampant. So it’s no surprise that thousands of Micronesians have taken advantage of their special status under COFA to migrate to the U.S. But that has succeeded only in burdening the social service agencies in the territories and states to which the Micronesians have migrated.

In 2008, the U.S. Census Bureau estimated that there were approximately 56,000 compact migrants in the U.S. That number now is estimated to be approaching 100,000. The largest populations of COFA migrants can be found in Guam and Hawaii, but there also are many such migrants in states such as Washington, Oregon and Arkansas.

When asked why they left their home islands for the United States, Micronesians have pointed to three main reasons: Access to healthcare, education and employment opportunities.

But once in the U.S., many of them have signed on for government assistance of various sorts, stressing the social service agencies and finances of the states to which they have moved.

In Hawaii, the population of COFA migrants increased by 20 percent between 2008 and 2013. Though they make up only about 1 percent of the population of Hawaii, they make up 15 percent of those receiving services for the homeless. About 16 percent of Micronesian families in Hawaii are either homeless or living in a shelter. In Guam, 22 percent of compact migrants require government housing assistance.

As for healthcare, COFA migrants are not eligible for Medicaid, so states have had to explore other methods of providing such services to these populations.

The dependence of many COFA migrants on government-provided social services is a growing problem that no longer can be ignored. In the U.S. territory of Guam, Gov. Eddie Calvo said in 2016 that government agencies there had been stretched to “a breaking point” trying to serve the needs of Micronesian migrants. Between 2004 and 2016, the U.S. Department of Interior gave about $409 million to Hawaii, Guam, and the Commonwealth of the North Mariana Islands (the three areas most affected) to defray the costs of providing services to these migrants. However, those jurisdictions estimate it has actually cost closer to $2.1 billion to handle the influx.

In Hawaii alone, providing services to COFA migrants costs the state and county governments an estimated $100 million annually. And while the federal government has said that the states shouldn’t bear the burden of that impact, in reality, it has reimbursed Hawaii only 16 cents out of every dollar in costs.

In other words, America’s COFA policy has:

  • Cost American taxpayers billions of dollars a year;
  • Had little to no impact on the well-being of the people who live in the Marshall Islands, the Republic of Palau and the Federated States of Micronesia;
  • Managed to avoid being accountable or transparent;
  • Brought thousands of migrants to the U.S. who even then are unable to escape poverty;
  • Unfairly burdened state finances and social services.

The program is a costly shambles that could have been completely avoided. But it’s not beyond fixing.

Looking ahead, U.S. policymakers should take a closer look at U.S. aid programs to COFA nations. Not only is there a need for better accountability, but program goals and policies should be re-assessed to focus on growing the Micronesian economies, so Micronesians will have greater incentives to stay in their island homelands. Moreover, states bearing the burden of paying for the services provided to the Micronesians who have left their homelands should have a voice in setting the overall policies — especially when it comes to the federal entitlements for those migrants.

It may seem that the number of COFA migrants are but a drop in the bucket compared to the issue of immigration to the U.S. as a whole. But it’s still a significant problem — for the Micronesians still living in Micronesia, for those who have migrated to U.S. territories and states, for the territories and states that have to provide, on their own dime, aid to those newly arrived migrants, and to U.S. taxpayers. Ignoring the problem will not make it go away; as of early 2017, it is only getting worse.

For the sake of both the people of the compact nations and American taxpayers, U.S. policymakers should do something better — and more effective — than simply fling more federal dollars at a set of failed policies.


Malia Blom Hill is the policy director of the Grassroot Institute of Hawaii (@GrassrootHawaii), a public policy think tank dedicated to the principles of individual liberty, free markets and limited, accountable government.

The views expressed by contributors are their own and are not the views of The Hill.

Tags Foreign Aid Hawaii Malia Blom Hill Micronesia

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