Explainer: Why did the U.S. just give $87.3 million to Palau?

 

On 1 October, 2018, Palau celebrates its 24th Independence Day, with a welcome birthday gift of $87.3 million from the United States Department of Interior.

The $87.3 million represents a down payment of a larger economic assistance package of $123.9 million that was appropriated in the U.S. National Defense Authorization Act and the 2018 Omnibus Bill signed into law by President Trump. The funding is actually overdue and a relief for civil servants and elected officials from both Palau and the U.S. who have been working diligently to get the funding secured from the 2010 Compact Review Agreement (CRA).

What can it be used for?

According to a letter signed by U.S. Interior Secretary Ryan Zinke to Palau President Tommy Remengesau, $65.2 million will be paid to the Compact Trust Fund and provides $22.1 in additional economic assistance.

The total funds, $123.9 million, were provided as a lump sum to be allocated as determined by the 2010 Agreement. The terms originally specified in the CRA were for continuing current grant assistance, although at a declining level. Additional resources were provided to support the Compact Trust Fund, infrastructure maintenance and capital projects.

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Source: Palau Government Facebook post.

While the creation of the Palau Compact Trust Fund has been an important feature of original Compact, it has led to its share of disputes in part due to its lower than expected rates of return. According to an economic review from the Graduate School:

“The CTF was intended to provide $5 million annually from FY1999 to FY2009 and then $15 million annually for government operations through the Compact’s 50th year in FY2044. However, these projections were based on the CTF’s achieving an annual return of 12.5 percent. As it turned out, the CTF achieved a 7.47 percent return through FY2009. This result was actually slightly better than the blended benchmark market rate of return of 7.32 percent over the same period; however, based on projections made at the end of FY2009 the CTF would have failed by FY2022, long before the Compact objective of providing level funding through all 50 years (FY2044).”

Palau has consistently referenced the “inflation adjustment factor” and has sought to have the remaining funds “front ended” so they can be invested to protect from inflation until zeroed out. Having funds in a money earning instrument able to be monitored by both governments provides for transparency and understanding. The money is intended to be subject to a withdrawal schedule under the agreement, but is not part of the documents released publicly at this stage.

Why Palau?

The U.S. and Palau have a special relationship via the Compact of Free Association. It is separate but similar to the Compact of Free Association with the Republic of the Marshall Islands and Federated States of Micronesia (with all three countries referred to as the ‘Freely Associated States’ or FAS). Essentially, the Compact provides for U.S. economic assistance (including eligibility for certain U.S. federal programs), defense of the FAS, and other benefits in exchange for certain operating rights, denial of access to the territory by other nations, and other agreements.

Importantly, flashpoints in the South China Sea and Korean Peninsula have helped revive U.S. policy attention and financial support for the Freely Associated States. In a statement, U.S. Interior Secretary Zinke said, “The U.S. Insular Areas are on the front lines of North Korean aggression and are an important part of the strategic defense for our nation. Authorizing full funding for the agreement is an important element of the Pacific national security strategy to maintain stability in the Western Pacific Region and we look forward to continuing our work with Congress to get this job done.”

Geopolitics over the last several years combined with a new administration have led to improved policy coordination and a whole-of-government approach to its bilateral relationships; U.S. Departments of Interior, State, Commerce, Health & Human Services, Education, Homeland Security, Energy, and others are working much more closely than in recent memory. This has been essential in moving forward interests of both the U.S. and Freely Associated States.

Timeline of the U.S. – Palau Compact

Untitled presentation

What’s next?

Although funding for the Compact Review Agreement was just reignited, it appears the term of the Agreement will still expire at the end of FY2024 and further funding thereafter will be provided from distributions from the Compact Trust Fund. Almost more important than direct financial assistance for Palau are the many federal programs and services Palau currently benefits from that are provided through annual Congressional appropriations. The range of programs included within the Compact include: Postal Services, FDIC, NOAA, Pell grants, FAA, education, health programs, and so forth which are subject to Congressional authorization.  

Palau is a large ocean state, made up of more than 21,000 people and hundreds of islands. Its most pressing issues are dealing with non-communicable diseases, infrastructure development (including for tourism), advocating for global climate action, and sustainable management of its maritime zone. These are all medium and long-term issues that require sustained budgeting and attention.

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AUSMIN 2018: What’s In, What’s Out

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Source: U.S. Dept. of State Flickr.

In a highly coordinated annual event arranged by civil servants of large bureaucracies with pre-cooked outcomes it is difficult to find surprises in joint statements. They tend to reflect the nature, state of the relationship and hot topics of the day.

In the case of the Australia-United States Ministerial Consultations (AUSMIN), the two-day bilateral meeting with leaders of defense and foreign affairs agencies is focused on strategic, diplomatic and to a lesser extent economic outcomes. While there is an increasing desire to focus on or highlight commercial ties and deliverables, commercial and treasury staff are not engaged at the meeting. (In this relationship, there are not enough problems to resolve, or trade barriers, in the bilateral trade and investment relationship to warrant a formal standalone commercial dialogue or include Commerce as part of AUSMIN. Also, tradition! New things are hard for big government.)

With academics and think tankers leading the charge, topics that continue to come up in Australian media and elsewhere are: the apparent withdrawal of the U.S. from the Pacific and so-called rules-based order and a lean toward Russia. So, naturally, the joint statement allayed fears that the governments’ haven’t been listening, and included language refuting those claims:

  • The Secretaries and Ministers emphasized both nations’ strong and deepening engagement in the Indo-Pacific. They made clear their commitment to work together – and with partners – to shape an Indo-Pacific that is open, inclusive, prosperous, and rules-based.”  

  • “The United States and Australia highlighted the priority each places on supporting an international rules-based order, alongside allies and partners. In the Indo-Pacific, that order has underpinned decades of stability, democracy, and prosperity.”

  • “The two countries reaffirmed their determination to oppose actions that seek to undermine the international rules-based order. Noting the anniversary of the downing of Malaysian Airlines Flight MH17 on July 17, the principals…expressed full confidence in the findings of the Joint Investigation Team concerning Russia’s role..[and] called on Russia to cooperate fully with efforts to establish accountability….”

 

What is more worrying or telling than what was said, was what was withheld. This included topics that plague the relationship and region.

immigration. Both countries are working through restrictions to immigration and with increasingly louder anti-immigrant constituents. Yet a steady flow of skilled and unskilled workers are essential to both economies, particularly Australia with population ageing. The Trump Administration has praised Australia’s strict immigration standards including for skilled migrants. For irregular migration, in Australia, there is almost no political debate from the major parties on whether to close the offshore detention centre on Nauru and its ‘no advantage’ policy. While a few academics have acknowledged the conflict with “Australian values” it is certainly not discussed widely. And, the Obama refugee resettlement deal still haunts policymakers on both sides.

Iran. We don’t have public access to the workplan that was developed, but surely Iran was discussed at AUSMIN. Prior to the bilateral meetings, Secretary Pompeo delivered a speech titled “Supporting Iranian Voices” in Simi Valley, CA that drew mixed reviews from the diaspora. Australia has room to gain from exports to Iran in agriculture, mining and energy. While there was no joint statement on the recent days’ spats, it is likely that Canberra would stand ready to support the U.S. even if it took any military action.

climate change. What a sad reality. Resilience is the code word for climate change adaptation, but the very denial lessens credibility of both states among Pacific island countries. How can diplomats and commentators say with a straight face that either country is pursuing sustainable infrastructure development (combating China’s funding) without acknowledging the coastal erosion, rising sea levels, drought, increasing frequency and strength of typhoons, etc.? The Green Climate Fund, Global Environment Facility and World Bank and ADB funding mechanisms all understand the depth and complexity of “resilience.”

fisheries or marine protection. Understanding that the Our Oceans conferences were a President Obama/ Secretary Kerry legacy (which Minister Julie Bishop attended), there have been a lot of resources directed toward marine protected areas, fisheries management and ocean acidification. Across the Indo-Pacific there are precious ocean resources that require high-level policy to protect fish stocks and ecosystems. Again, this is an area that Pacific island countries highly value, so joint understanding and action would have given both some Pacific leadership points. In the case of the U.S., the Commerce Department is reviewing its relevant policies and may allow fishing within maritime monuments!

Agile policymaking, including keeping bilateral meetings to minimum staffing, is becoming the norm due to budgeting, past mission creep and corporate influence on government. Then, those of us who analyse foreign policy advocate for more attention and resources for their region or issue. But we should consider that bureaucracies are limited and cannot have an ever-expanding mandate.  

While I’ve highlighted issues that trouble the relationship and region, these are difficult for the U.S.-Australia alliance to work on because they are multi-faceted and have domestic political considerations. To supplement high-level diplomatic conversations, engagements can and do happen regularly at the public staff, civil society and private sector level. Just because they’re difficult, it doesn’t mean we can’t try. And to stay mates, we also don’t have to come to a consensus on every issue. Perhaps a public ‘to do’ list would be a start.

Plastic Battle in the Pacific: Is it too late to win the bin war?

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There’s no time like the present to reduce consumption of plastics, and at minimum reuse and recycle. In the Pacific, we are facing questions on what to do with our own rubbish and imports that continue to float onto our shores. Recent reporting about the well-known “Great Pacific Garbage Patch” estimates that there are more than 78,000 tonnes of plastic in an area of about 1.6 square kilometers. The rubbish patch has grown substantially, helped by extreme events like the 2011 tsunami in Japan.

This year, for better or for worse, certain trends are creating a momentum of impact on the plastic landscape. At the national level, some governments are refusing to take notice. Leaving recycling up to the market and local level to regulate has meant inconsistencies in costs and infrastructure across districts and states and impeded an effective national movement in many countries.

In addition to what is floating in the ocean, plastic and other recycling is piling up on land in Australia, the United Kingdom, Samoa, the European Union, and elsewhere as China’s restriction on imports of waste takes effect. According to the ABC, the ban will impact about 619,000 tonnes of materials worth $523 million in Australia alone.

But, when one recycling bin closes, sometimes, another one opens. This presents an opportunity to transform the industry and societal behaviours, take leadership, and call out harmful practices.

We’ve heard positive news from industry recently, who noticed rubbish piling up in the Pacific. Rather than leaving the Pacific islands with empty shipping containers after unloading exports, China Navigation wants to pick up rubbish and recyclable materials for free. It is still figuring out where and how to process the recyclables. Pacific Recycles in Samoa is the only major recycling operation in the Pacific islands, and is aiming to improve quality of materials so that New Zealand or other countries will accept the rubbish.

Unsurprisingly, Pacific island leaders are acting. Governments of Vanuatu, Palau, Marshall Islands, and American Samoa have signed on to banning single-use plastic bags. Some have also adopted levies on bags or bottles. In New Zealand, a petition to ban plastic bags was accepted at Parliament in February.

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In Australia, waste industry and environmental advocates are calling on the government to take action on regulations to encourage a circular economy or ensure purchasing of recycled products in government procurement. The federal government has signaled it is an issue for state and local governments; so for now at the lowest levels, local governments like the Hornsby Shire Council in the Sydney suburbs have it on their agenda to find new solutions for recycling and to consume less plastics.

While China has framed the ban on imports of recycling as a way to improve its environment, it could lead to an increase in new production of the same plastics. China’s demand for some plastics, particularly polyethylene, are forecast to rise to make up for the loss of recycled plastic.  Producers, then, should take more responsibility for managing the environmental impact of the full lifecycle of their products. Consumers can also refuse to create demand for certain plastics, recycle, and utilise the local resources available to understand lifestyle habits.

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Clean beaches don’t necessarily mean a clean ocean. Manly Beach, Australia.

It seems no beach or stream is free from pollution, but there are plenty of groups and individuals working to fix that. For example, the organisation Clean Up Australia has more than 7,000 registered clean up sites, empowering local communities with tools, networking, and knowledge. We know that commercial fishing gear make up a significant portion of ocean rubbish and have their own harmful impact on wildlife; recycling nets and other gear has turned into an effective business for more more than a few startups, converting them into carpets and other consumer products.  Bringing government, industry, and community groups together is essential to not only creating projects like those funded by the Australian Packaging Covenant but also to understanding global needs and expanding possibilities.

Blue Diplomacy: Interpreting the New Ross Sea Marine Protected Area

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Antarctica. Photo Credit: Genevieve Neilson

This week, U.S. Secretary of State John Kerry will visit Antarctica’s McMurdo Station, becoming the highest ranking U.S. official to visit the continent. His visit will bring international attention to the new Ross Sea Marine Protected Area (MPA) and showcase the Obama Administration’s commitment to conservation and acting on climate change. But, if Antarctica is already ‘protected’ by the Antarctic Treaty System and Madrid Protocol, why did 24 countries and the European Union need to sign onto the world’s largest new MPA? Taking a deeper dive into the issues surrounding MPAs, the Antarctic Treaty System and contemporary ocean policy leads us to understand that the Ross Sea MPA is a sign of a changing narrative in conservation where ocean health is linked to climate change.

In his book The Geopolitics of Deep Oceans, John Hannigan provides a timely interpretation of the changing discourse of oceans; from a place for ‘frontier’ activities to a place for ‘saving.’ In between, we’ve fought for sovereignty claims and worked on best ways to ‘Govern the Abyss.’ We can see several of these discourse changes in the management of Antarctica specifically.

At the height of the Cold War in 1959, the international community agreed to set aside an entire continent for scientific exploration, banning military activity including nuclear weapons. There are 53 parties to the Antarctic Treaty System, which also halted all new sovereignty claims on the frozen continent. This would prohibit any new bases by emerging countries and maintain existing power structures. In a sign of the discourse around oceans management and conservation, the original Antarctic Treaty System included land and ice shelves but not all of the surrounding waters.

In 1991, the Antarctic Treaty System was updated with the Madrid Protocol, which sought to limit adverse impacts on the Antarctic environment by designating it as a  “natural reserve, devoted to peace and science.” Importantly, it showcased that resource extraction was important issue at the time and prohibited mining; a later addition to the protocol prevented marine pollution and provided provisions for waste management.

Finalized in Australia in October 2016, the Ross Sea MPA has created the world’s largest marine reserve and will enter into force in 2017. The agreement designates 72 percent of the MPA to be ‘no-take’ and only some sections will allow harvesting of tooth-fish and krill for scientific research for the next 35 years. The Ross Sea is home to almost 40 percent of the world’s Adelie penguins, 30 percent of Antarctic petrels and a huge amount of krill which animals like seals and whales rely on for nutrients (and even humans). The agreement was first introduced by the United States and New Zealand in 2011, and they will also negotiate details of implementation including monitoring and assessment plans. Therefore it will be critical for a positive bilateral working relationship to continue.

The Ross Sea MPA is another example for the changing discourse in oceans management, from working on effectively governing territories to harnessing power from multiple groups (from government leaders to nonprofits to celebrities) in order to save and protect oceans no matter how distant from our everyday lives. According to John Kerry, 2016 has been a “landmark year for ocean stewardship” particularly when the Ross Sea MPA’s 1.57m square kilometers is combined with the nearly 4m square kilometers of newly protected ocean area announced at the Our Ocean Conference in September.

The Ross Sea MPA is not controversial and has several benefits for the U.S. First, for areas that are not threatened but are protected, MPAs brings significant scientific value to have a pristine ocean environment available. Second, it is a political opportunity to demonstrate a commitment to environmental principles and contribute to an administration’s legacy. When there are no threats to powerful political or commercial interests, MPAs are more likely to have bipartisan support. Third, it improves the soft power particularly of the U.S. where climate initiatives or environmental protections in the past have been weak.

The Ross Sea MPA is also important because it may set a precedent for high seas MPAs to be negotiated. According to Hannigan (2016), we are now in a discourse of “Saving the Ocean” whereby the primary actors oppose exploitation of ocean resources in favor of full protection; preferably protection is pursued through “zoning the oceans, specifically the establishment of marine reserves and other marine protected areas” (133). Nonprofit and industry groups, marine scientists and government leaders like Palau President Tommy Remengesau have called for 20 percent of the ocean to be protected.

While I agree with marine protected areas and have written about their importance, expanding upon the square kilometers of protected areas for their own sake or simply demonstrating international harmony is not sufficient for creating what is needed, a behavioral shift among consumers or international supply chains. The momentum must continue through bipartisan and multi-stakeholder efforts with work to educate the public about what they can do in their own communities.

I was fortunate to be able to visit Antarctica in 2005 as part of an educational trip with young students and researchers. Albatrosses and other sea birds soared past our ship as we cut through what seemed an endless bounty of icebergs and sea ice. I saw what most people only see on television – killer whales hunting a seal trying to escape capture on a lone ice flow. Once on land, I scooted among the penguins’ trails and visited Halley Research Station run by Great Britain in the Weddell Sea. A sign that not everyone can or should visit the pristine environment, our icebreaker ship rescued a large tourist cruise ship stuck in the ice. I experienced firsthand the serenity and silence of Antarctica and its inability to advocate for itself.  

Ocean conservation is now a welcome part of the discourse on global climate change, part of what I’d like to call Blue Diplomacy. In a 2014 letter to President Obama, the Marine Conservation Institute said “the unprotected ocean is like a debit account where everybody withdraws and nobody deposits. By contrast, marine reserves are like savings accounts that produce interest we can live off of.” (Hannigan 2016, 128) In the absence of the strongest binding commitments and complimentary to the Paris Climate Accord, the Ross Sea MPA provides a relatively easy ‘win’ for scientists and government leaders alike. It is a signal that despite escalating competition for Asia-Pacific territory resources harkening back frontier days, international actors are awakening to the climate-ocean nexus and the interconnectedness of healthy fish stocks and reefs with a healthy climate.  

Asia-Pacific Profile: Susi Pudjiastuti

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Susi Pudjiastuti, Minister of Marine Affairs and Fisheries, Indonesia at the Our Ocean Conference in Washington, DC. Photo Credit: Genevieve Neilson

Who is she?

Susi Pudjiastuti has been the Minister of Marine Affairs and Fisheries in Indonesia since 2014. She is known for her strong personality and tough stance on illegal fishing. Prior to being appointed as Minister, Ms. Susi had seafood export and charter airline (Susi Air) businesses where she gained notoriety and amassed a fortune, despite being a high school dropout.

Why is she in the news?

On September 19, the World Wildlife Foundation presented Minister Susi with their Leaders for a Living Planet Award, recognizing her as a “champion for the oceans.” Minister Susi was recently in Washington, DC to participate in the Our Ocean Conference hosted by the U.S. Department of State, September 15-16. She announced that Bali, Indonesia will host the conference in 2018.

Minister Susi has shepherded the Jokowi government’s policy of destroying foreign boats illegal fishing in Indonesian waters. According to Minister Susi, at any given time, Indonesia has 15-25,000 illegal fishing vessels in its waters. Since 2014, the government has destroyed more than 220 boats, with some incidents captured and presented online. At the Our Ocean Conference, she described the policy as stemming from Indonesia’s experiences curbing drug smuggling.But it is also a way to tackle corruption in politics and business.

How does her work impact Indonesia in the Asia-Pacific?

Stemming illegal, unreported and unregulated (IUU) fishing is a top priority for many governments and organizations, as demonstrated at the 2016 Our Ocean Conference. Additionally, actions are being taken to mitigate ocean acidification and create marine protected areas. Representatives announced commitments of at least 136 new initiatives on marine conservation and protection valued at more than $5.24 billion, and new commitments on the protection of almost four million square kilometers (over 1.5 million square miles) of the ocean.

Illegal fishing is estimated to cost Indonesia $3 billion per year. It is no surprise then that Indonesia supports the Safe Ocean Network and is party to the Port State Measures Agreement. As a global initiative seeking to “combating all aspects of the fight against illegal fishing, including detection, enforcement, and prosecution,” the Safe Ocean Network ‎includes 46 governments and organizations and more than 40 projects worth over $82 million over 5 years. The Safe Ocean Network aims to “strengthen monitoring, control and surveillance (MCS) efforts through the integration of existing and emerging technologies, expanded use of internet-based tools, enhanced coordination and information sharing, and capacity building.”

What is her impact on U.S.-Indonesia relations?

At the 2016 Our Ocean Conference and at other venues in September, the United States announced new measures to protect the ocean, stem pollution and support sustainable fisheries.To inform its policymaking, the U.S. government intelligence community produced its “first ever unclassified assessment on the drivers and global implications of IUU fishing.” The U.S. is influenced by its allies in the Asia-Pacific who face threats from IUU fishing which impact their economy, security and society.

In particular for Indonesia, among other commitments, the U.S. is providing Port State Measures Agreement implementation training for officials and managers and will aid with curriculum development and training for officials in the country’s major ports.

Why Marine Protected Areas Matter

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Redfish Rocks Marine Reserve, Oregon, U.S. source: Flikr

On August 26, 2016, the Obama Administration announced the expansion of Papahānaumokuākea Marine National Monument northwest of Hawaii from 360,000 to 1.5 million sq km. It is the largest no-take marine protected area (MPA) and the largest protected area in the world, land or sea. Coming at the end of the administration, the executive order demonstrates President Obama’s desire to have conservation as part of his legacy. More importantly, it is a reminder to the American public that its government must take measured steps to protect against the changing climate and support sustainable fisheries.

MPAs are not new, and are an important tool in government policy for conservation and fisheries management. In the U.S., they include a variety of environments, including open ocean, intertidal zones, estuaries, coastal areas and the Great Lakes. Many U.S. MPAs are mixed use, but some are no-take, which prohibit commercial and recreational extraction to enable ultimate protection for marine ecosystems. MPAs protect all types of habitats, plants and animals within U.S. waters, and even includes protection of shipwrecks or other cultural resources.

The purpose, management and legal authorities of MPAs also varies in the U.S. In 2000, President George Bush issued Executive Order 13158 which supported a comprehensive system of MPAs and established the MPA Center; yet it did not contain a mandate to override federal or state regulations or procedures. President Bush also originally designated the Papahānaumokuākea Marine National Monument in 2006, and as well as the Marianas Trench, Pacific Remote Islands, and Rose Atoll Marine National Monuments in January 2009. Overall, in the U.S., the National Oceanographic and Atmospheric Administration (NOAA) within the Department of Commerce oversees a majority (97%) of MPAs.

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The National Marine Protected Areas Center maintains a Classification System which functionally describes MPAs using five characteristics common to MPAs: conservation focus, level of protection, permanence of protection, constancy of protection and scale of protection. These areas of classification dictate the purpose of establishing an MPA, “what it is intended to protect, how it achieves that protection, and how it may affect local ecosystems and local human uses.”

According to NOAA, the U.S. has more than 1200 MPAs which cover 26% (3.2 million sq km) of U.S. waters. No-take MPAs cover about half of that area, or 13% (1.5 million sq km). In comparison, about 14% of land in the U.S. is protected, and U.S. waters are 1.4 times greater than the country’s land area (12 million sq km).

There are no federal mandates to set aside a specific percentage of the U.S. marine environment for protection, but some proponents of conservation believe there should be targets. In a recent statement, President Obama acknowledged that Pacific islands are at the forefront of the impacts of climate change with rising sea levels and rising temperatures. At the IUCN World Congress, Palau President Remengesau announced his desire for 30 percent of global waters to be protected (currently only 2 percent is protected). In Palau, 80 percent of its maritime territory has been designated a sanctuary to stem the effects of overfishing. With the State Department-led Our Ocean conference upcoming, this issue of global expansion of marine protection should stay on the agenda.

In part because they can be designated or classified in different ways (i.e. some areas can be more protected than others), MPAs are not controversial and receive bipartisan support. Importantly, they also require minimal effort from the American public; they do not require modification of the majority’s everyday lifestyles, but their complicity shows in a way that Americans care for the environment.

Marine protected areas will experience the same impacts from climate change as the wider ocean and coastal areas; but the intention is to create a pristine and protected laboratory to learn from these changes as well as to regenerate marine populations decimated by overfishing, IUU fishing, and bycatch. Protection from commercial and in some cases recreational fishing creates a space where coral and fish alike can take refuge. Ocean acidification continues to threaten species, especially coral reefs, and MPAs are intended to support ocean resilience. Scientists plan to monitor the fragile environment, and hope that by expanding the monument, it will also help nearby ecosystems to adapt.

Asia-Pacific Profile: Myint Swe

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Photo credit: Taro Taylor; Creative Commons

 

Who is Myint Swe?

Born June 24, 1961, Myint Swe is a retired general and one of two newly-inaugurated Vice Presidents of Myanmar. His resume includes posts as the head of the military security department in the previous government (intelligence body) and more recently the chief minister of the Yangon region. In 2012, he was nominated to replace a Vice President who was against reforms, but was never confirmed for reasons that are disputed .

Why is he a newsmaker?

On March 30, Myanmar’s new civilian president, Htin Kyaw was sworn in along with his two Vice Presidents and 18 Cabinet Ministers, including Aung San Suu Kyi. Myint is in the news particularly because he is also a close ally of former junta leader Than Shwe. He took part in the crackdown of student protests last year and Buddhist monks in 2007. After his nomination was announced this month, social media websites became sites of significant criticism, citing the military’s continued influence over the country.

Because he has a son-in-law with Australian citizenship, there were questions originally surrounding his eligibility for the role. The constitution, written by the military, bans top government officials who have foreign relatives.

How does Myint Swe’s position impact Myanmar’s new government?

The military is still heavily entrenched in Myanmar’s political and economic systems. While the Parliament is dominated by Aung Sang Suu Kyi’s National League for Democracy, the military has a right to nominate a Vice President. The military maintains sufficient veto power as it is also guaranteed three ministries (Border Affairs, Home and Defense) and control a quarter of parliamentary seats.

New President Htin Kyaw, hand-picked by Suu Kyi, will lead Myanmar’s first civilian government after 54 years of military rule. Suu Kyi will meanwhile take on important portfolios in the ministries of education, foreign affairs, electric power and energy and the president’s office. Land confiscation, national reconciliation and a transition to a more open economy are just a few issues that the new government aims to tackle. The public has welcomed new government with open arms, and has high hopes for its civilian leadership. Leaders affiliated with the previous regime will have to adapt if the country is to move forward economically and politically.

How does Myint Swe impact US policy toward Myanmar?

The U.S. Government has welcomed reforms to Myanmar’s political and economic systems. Yet as a feature of the old regime, Myint Swe remains on a U.S. Treasury Department blacklist that prevents U.S. companies from doing business with certain businessmen and senior military figures. The military’s grip on power also still enables its control over release of political prisoners, a critical issue for relations with the U.S. to improve. At this stage, the U.S. State Department has not appeared to indicate whether Myint Swe’s role in the government would affect diplomatic relations.