22 May 2014

Marshall Islands put into grant category by ADB

2:11 pm on 22 May 2014
Majuro Atoll, Marshall Islands

Majuro Atoll, Marshall Islands Photo: RNZI/Walter Zweifel

The Marshall Islands has been assured of increased financial support from the Asian Development Bank.

Our correspondent Giff Johnson says the Secretary of Finance has been in negotiations with the ADB and says the move of the country from a loans to a grants category is positive.

He says the Marshall Islands currently owes over 60 million US dollars to the ADB and nearly 50 million US dollars to the United States Rural Utilities Service, giving a total debt that is close to the country's annual budget.

"Secretary Alfred has made the point that this is helpful because the Marshalls doesn't really need more loans, it needs to move off that, repay the loans and lower its debt burden and the ADB does offer a lot of technical assistance and grant funding that can be put to good use."

Giff Johnson says Secretary Alfred Alfred Jr indicates that given Marshall Islands' current debt to gross domestic product ratio, it is better for it to halt external loans and improve its fiscal position to allow for future investment.