14 Jul 2011

US Defense cuts expected to hit Marshall Islands hard

7:14 pm on 14 July 2011

Job cuts at the United States Army's Reagan Test Site at Kwajalein Atoll in the Marshall Islands are expected to have a big impact on the local government's budget.

US Defense Department budget cuts are expected to result in significant job losses for Marshallese and American workers at the base.

Our correspondent, Giff Johnson, says if attempts to mitigate the cuts are unsuccessful, the Army will be forced to layoff as many as 100 to 120 local workers and 40-to-50 American workers.

"The situation on Ebeye is that there's been an ongoing reduction at Kwajalein over the last three or four years, the army has gone through a whole series of cutbacks, which have resulted in some job losses already, and it just heavily impacts the urban centre next door to the base. There are something like 12-thousand people, and often one wage earner will support 10-20 people."

Giff Johnson says it is estimated the cuts will reduce taxes coming to the Marshall Islands government by US$1 million a year.