By Dionisia Tabureguci
The Republic of Marshall Islands (RMI) government has released the names of four funds that will receive a certain percentage of the country's soon to be released government backed digital currency, or sovereign (SOV).
SOV – dubbed the world's first real cryptocurrency by virtue of it being legally sanctioned by a sovereign state as legal tender – traces its genesis back to February last year, when the Marshall Islands' parliament passed a law officiating its status as the country's new legal tender.
In the SOV's white paper released yesterday, RMI said out of the initial money supply of 24 million sovereigns, the government will keep 50 percent which will be distributed among four trust funds gradually over five years.
The funds are:
The other half will be distributed to the SOV Development Foundation (30% or 7.2 million SOVs) – which will look after the ongoing development of the SOV; early investors (10 percent or 2.4million SOVs) – proceeds from this sale is slated to foot the bill for the SOV's issuance; and appointed organisers (10 percent or 2.4 million) – these are payments to commercial partners of the SOV project.
The SOV's white paper's release coincides with the three-day Invest Asia Conference 2019 in Singapore, which ends today and was attended by David Paul, RMI's Minister-in-Assistance to the Marshallese President Dr Hilda Heine.
In his keynote speech at the conference, Minister Paul outlined the four Marshallese values which underpin the design of the SOV, which are: "sustainable, fair, safe and simple."
"SOV is sustainable because the supply grows annually at four percent. The market doesn't like surprises. If I have the key to the money printing machine, I can fund any project I want, but it devalues your money. With SOV, we've said we don't want to do that. We're going to govern responsibly, so the supply is fixed and transparent, and the market knows that," he said.
RMI currently uses the US dollar as is legal tender and the SOV will become its first official fiat currency, albeit in digital form.
SOV will be available first to interested investors internationally, through a planned public sale of pre-SOV units, according to the white paper.
This will involve the sale of 9.6million SOV, to be auctioned gradually as part of a Time-Release Monetary Issuance (TRMI), a process that is expected to begin "soon" and last for 18 months, giving international investors the opportunity to participate when the SOV is officially released.
"The units sold during this introductory period are intended to be exchanged for sovereigns once the sovereign is officially launched," according to the SOV's white paper.
While in the white paper RMI has confirmed it will relinquish control over the currency's money supply, it has listed a number of key entities that will be involved in the governance of SOV.
Among them are the SOV Administrative Authority (SAA), to be created as a unit within the Ministry of Finance and whose role will range from vetting and overseeing exchanges and other identity verifiers to performing Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) functions, the Legal Tender Committee to oversee and guide SOV issuance, allocation and its distribution in the Marshall Islands; and the SOV Development Foundation, which will look after the SOV's ongoing maintenance and development.
The USD will still circulate and be recognised in RMI when the SOV is launched.
By Nic Maclellan in Funafuti, Tuvalu
As leaders gather in Tuvalu for the 50th Pacific Islands Forum, Marshall Islands President Hilda Heine has criticised Australia’s reluctance to undertake a rapid transition from the use of coal and other fossil fuels.
“We’re discouraged and disappointed at the fact that Australia is still actively using coal for their own power generation, and it looks like that is something that is going to continue into the future,” she said. “That’s not helping the issue of emissions and we know they understand that.”
Australian Prime Minister Scott Morrison arrived in Tuvalu on Wednesday to attend his first Forum leaders’ retreat. Australia has announced a $500 million pledge of climate finance over the next five years (with funds simply rebadged from existing aid allocations). Despite this pledge, Heine has joined a number of leaders from vulnerable low-lying atoll nations – including host nation Tuvalu – who have been forthright in their criticism of the Morrison government’s ongoing commitment to the expansion of coal mining and exports.
Meeting before the formal summit, island leaders issued the “Tuvalu Declaration on Climate Change for the Survival of Pacific Small Island Developing States (PSIDS).” The declaration supports “the UN Secretary General’s call for an immediate global ban on the construction of new coal fired power plants and coal mines and calls on all countries to rapidly phase out their use of coal in the power sector.”
President Heine was also critical of the Morrison government’s decision to end Australian funding for the Green Climate Fund (GCF), the global funding mechanism that provides loans and grants for adaptation and emissions reduction in developing nations.
The GCF is about to launch a replenishment round, to increase OECD pledges beyond US$10 billion. Despite Australia’s stated belief that some island leaders prefer direct bilateral climate funding, the Pacific Small Islands Developing States (PSIDS) and the Smaller Islands States (SIS) caucus endorsed the Tuvalu Declaration on Tuesday. This statement clearly welcomes “the significant role that the GCF plays in supporting developing countries in their efforts to address climate change. We call for a prompt, ambitious and successful replenishment of the GCF.”
US President Donald Trump has also refused to make further financial commitments to the GCF. RMI President Heine has asked Australia’s Scott Morrison to heed the call from islands neighbours.
“We’ve also heard that they’re pulling back from funding the Green Climate Fund (GCF), which is also very disappointing,” she said. “In the case of the Marshall Islands, we’re beginning to work on our adaptation plan, as sea level rise gets more serious. We know that it will impact the Marshall Islands in very serious ways, so we have to have adaptation which we call a survival plan.”
President Heine said: “In order to make that plan a reality, we need that assistance, we need the donor community to come up with the resources that will help us adapt to our situation. If we’re talking about raising parts of the Marshall Islands, that’s an intensive proposition. We know we cannot do it on our own, so the necessity of an organisation like the Green Climate Fund comes into play. That’s why I hope the Australian government will reconsider their position when it comes to the Green Climate Fund.”
Meeting Donald Trump
Last May, President Heine joined Micronesian leaders Tommy Remengesau of Palau and David Panuelo of the Federated States of Micronesia (FSM) at the White House, in an unprecedented joint meeting with US President Donald Trump.
As the former colonial power, the United States has maintained Compacts of Free Association with RMI and FSM since 1986 and with Palau since 1994. But key provisions of the often-extended Compacts come to an end in 2023-4. The US freely associated states have been seeking a further extension of these funding, migration and services agreements.
President Heine said that the White House visit last May had been vital to gain presidential support for an extension of the US-RMI relationship.
“For us, basically that meeting was to get the US government to commit to start the negotiations for the Compact of Free Association for the freely associated states,” she said. “We’ve been talking with the US and with other officials along the way on getting that started. It has taken quite some time for decisions to be made. Now it’s been made. That was the most significant outcome of the meeting – nudging the US to make that decision.”
“It’s not just the Compact,” she noted. “It’s related to their interest in securing the region, because of the geopolitical issues that are emerging, one of which is with China. We know that’s partly the reason that nudged the US into making that decision to extend the Compact.”
The renewed engagement with the Compact states has been boosted by the geopolitical tensions between Washington and Beijing, amid US attempts to contain China’s political and economic rise. Even though RMI and Palau are both diplomatically aligned with Taiwan (and only FSM with the People’s Republic), there is significant economic investment from China in all three Micronesian nations.
President Heine stressed: “Right now, the percentage of our GDP that comes from China is so much higher than the US. It is telling us that the US needs to make the commitment to be there and set up businesses that would provide employment for our people. There are not enough jobs, so these are some of the things that the US has to make commitments to partner with us in economic development by establishing business in the country.”
Last week, President Heine and fellow Micronesian leaders met US Secretary of State Mike Pompeo in the Federated States of Micronesia. Offering new security agreements with the Compact States, Pompeo stated: "Today I'm here to reaffirm the United States will help you protect your sovereignty, your freedom and your right to live in freedom and peace."
But many island leaders want to redefine “security” in light of the climate and development crisis that faces their homes. At the 2018 Pacific Islands Forum in Nauru, all leaders signed the Boe Declaration, which looks to an "expanded concept of security inclusive of human security, humanitarian assistance, prioritising environmental security and regional cooperation in building resilience to disasters and climate change, including through regional cooperation and support."
President Heine hopes that renewed US interest in the islands region will take account of these island priorities and this broader definition of security.
“For us, we’ve made sure that we don’t talk just about the security issues and military issues that they’re concerned with,” she said. “Our definition of security is expanded to include economic development – making sure that people have food on the table, so that they’re secure in their place, in their homes. Also, we’re concerned about health security and the health of our people, because there’s a high rate of cancer and other disease as a result of the testing.
“When we talk about security with the US, we say it’s all of them, it’s not just about military security. It’s all about these other issues that are important for the security of the Marshallese people. We don’t want the Marshallese people to leave the Marshall Islands in search of jobs because they are not secure in their own homes.”
The people of the Marshall Islands still live with the radioactive legacy of 67 US nuclear tests, conducted at Bikini and Enewetak atolls between 1946 and 1958. At recent Pacific Islands Forum meetings, President Heine has been seeking regional support for the clean-up of nuclear contaminants, especially from the Runit Dome.
Runit is a nuclear sacrifice zone established when the US military dumped radioactive contaminated materials in an old nuclear bomb crater on Runit Island in Enewetak Atoll. Decades after the nuclear waste was covered in a concrete cap, the dome is cracking and there is growing concern that radioactive isotopes are leaching into the marine environment.
“In respect of the Dome, we’re seeking a more comprehensive assessment of the situation,” Heine explained. “We do need to get a third party involved and do a comprehensive assessment of the whole situation – not just of the Runit Dome but also on other issues of contamination in our marine life. We do have fish poisoning on Kwajalein as a result of the run off from the dry-docking facilities of the military base.
“We want to have a comprehensive look at all of these so we know how to move forward. We have commissioned the National Nuclear Commission to come up with our strategy for justice, and that will be introduced into the Nitijela [RMI parliament] in the next two weeks.”
Last month, new research on radiation levels in RMI’s northern atolls was published in the prestigious US Proceedings of the National Academy of Sciences (PNAS). Sixty-five years after the 1954 Bravo hydrogen bomb test, a Columbia University team led by Professor Emlyn Hughes found radiation levels orders of magnitude above background for plutonium, americium-241 and bismuth-207 in the top 25cm of sediment across the entire Bravo bomb crater.
The PNAS research papers also document measurements of cesium-137 in fruits from 11 islands on four atolls in the northern Marshall Islands. More than sixty years after the last test, contamination remains above limits set by international safety standards in some measured fruits. Cesium-137, present in the fallout, has a half-life of approximately 30 years and is readily absorbed by food crops, representing an ongoing health hazard for island inhabitants.
President Heine welcomed the PNAS research, but said it needed to be complemented by further studies. She believed that some people have heard about the new data, but it has not transformed their way of life.
“People are hearing that, but they’re still eating their traditional, indigenous food,” she said. “I’m not sure whether people have internalised that news. I don’t hear people saying that they’re not going to eat the sashimi or the fish, but it is a serious concern for us to look at.”
Micronesian neighbour Kiribati also suffered from Cold War nuclear testing by both the United Kingdom and United States. There were nine British atmospheric nuclear tests on Christmas (Kiritimati) Island in 1957-58. The UK government then allowed the Kennedy administration to use the military facilities for a further 24 US nuclear tests on Kiritimati in 1962.
To highlight the legacy of testing, RMI and Kiribati are currently discussing the organisation of a side event in New York in September, as world leaders gather for the opening of the UN General Assembly and the UN Secretary General’s Climate Action Summit.
President Heine welcomed the support of fellow members of the Pacific Islands Forum – especially the Smaller Island States (SIS) – who have made nuclear contamination a standing item on their annual agenda.
“I think we’re getting that support,” she said. “We’re getting it from Kiribati and from other countries that have been impacted by nuclear testing. The rest of the Pacific have been very solid on supporting us, writing letters to the United Nations and the United States.”
She committed her nation to working on the Forum’s “Blue Pacific” agenda, including common regional issues on the ocean agenda, such as fisheries management, maritime surveillance and controlling Illegal, Unreported and Unregulated (IUU) fishing.
“We have such a big EEZ and we have only two patrol boats to patrol our area,” she laughed. “I often give the example that it’s almost like having one pickup truck with a policeman, patrolling the entire state of Texas! That’s the size of the Marshall Islands when you look at it. So, to have only two patrol boats, we know we cannot cover the EEZ and make sure that it’s secure. We need the fishing nations that work with us to help us in this area.”
IN what may be a record in the Pacific islands for speed of a no confidence motion following election, just three days after Casten Nemra’s inauguration as the new President of the Marshall Islands on January 11, opponents in the nation’s parliament filed a notice of their intent to move a vote against Nemra’s few days old government.
The rushed leadership challenge, unprecedented in 37 years of constitutional government, offers an indication of the volatility and apparent lack of stability in the nation’s parliament following the November 16 national election, which also produced an unprecedented result: 40 percent of the 33 seats changed hands.
The election resulted in half of the senators aligned with the ruling party losing their seats, and a strong contingent of younger Marshall Islanders elected. The parliament will decide the fate of the new government on January 25. The Nitijela (parliament) has been split from its opening session January 4, when the Speaker and Vice Speaker were elected by one faction and the President by another.
This is another unprecedented development for these top national leaders to be elected by different groups in Nitijela. New Speaker Kenneth Kedi and Vice Speaker Jejwarick Anton won by 19- 14 margins, but Nemra was elected by a one-vote majority, 17-16, as some senators bailed from an opposition coalition — an alliance of the longstanding opposition grouping of senators and about 10 of the newly elected senators, which had agreed to elect veteran MP Alvin Jacklick as President...
THE election of the Marshall Islands’ — and the independent Pacific’s first — head of state in late January followed a rollercoaster series of leadership twists and turns in this north Pacific nation’s parliament. It saw the nomination by a paramount chief of a commoner, Casten Nemra, and his subsequent election on January 4 as the youngest president in Marshall Islands history.
But his slim majority collapsed just days into his presidency, a motion of no confidence was moved, and endorsed by parliament January 26. The next day, Dr. Hilda Heine was elected president of the nation without opposition, becoming the first woman to head this nation in its 37 years of constitutional government. Heine is not new to breaking glass ceilings for women. Earlier in her career, she was president of the College of the Marshall Islands and permanent secretary of education.
In the 1990s, she moved to Hawaii to complete her Ph.D. in education, becoming the first — and still only — Marshall Islander to achieve this postgraduate degree. She worked for many years with the Honolulu-based regional organization PREL (Pacific Resources for Education and Learning) that supports regional educational exchanges and reform projects in U.S.-affiliated islands. She returned to the Marshall Islands to stand for election to Nitijela (parliament) for Jaluit Atoll in 2007, but lost. In 2011, she switched to run from Aur Atoll, easily winning a seat in parliament.
New Year’s Eve is normally the time for popping champagne bottles and partying into the wee hours. There was plenty of that in the Marshall Islands. But in an unprecedented government action, law enforcement officers in Majuro, wielding court-approved search warrants, descended on a local pharmacy and medical supply company, the Ministry of Health and the Ministry of Finance’s procurement and supply office on New Year’s Eve, confiscating computers, thousands of documents and other records in what looks to be the most massive fraud probe in the 34- year history of Marshall Islands’ constitutional government. The target is suspicious bids involving hospital equipment and supply orders, which routinely run into the millions of dollars annually. The Auditor-General and law enforcement personnel say they suspect government workers in the Ministry of Health and elsewhere were accepting bribes in exchange for awarding lucrative contracts for hospital needs. While the investigation played out in the first three weeks of January—including reported visits by investigators to Majuro Hospital inventorying equipment purchased through suspicious bids, some of which sources said could not be found.
Unprecedented step: The head of the Public Service Commission Marie Maddison was joined by President Christopher Loeak in notifying government departments that they were taking the unprecedented step of putting the government’s Chief Secretary in charge of the Ministry of Health. The appointment of Chief Secretary Casten Nemra as Interim Secretary of Health through February 15 underlines the gravity of the problems at the ministry.
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