HAGÅTÑA, Guam — Taking a proactive approach, leaders from the Federated States of Micronesia unveiled an action plan — that they hope will alleviate the effects of an expected US$50 million shortfall 10 years from now — to FSM citizens on Sunday night at the Astumbo gym.
FSM President Manny Mori along with Yap Governor. Sebastian Anefal, Pohnpei Governor. John Ehsa and Governor Lyndon Jackson of Kosrae attended the meeting along with the Secretariat of the 2023 Action Plan Committee, Evelyn Adolph.
The meeting was called by the FSM leaders to present the action plan to FSM citizens on Guam and allowed for FSM citizens to share their concerns.
The leaders proposed growing tourism and agriculture in the islands to help offset the $50 million they will no longer have access to in 2024. Authorities hope to capitalize on tourism, focus on branding the islands and marketing them to a different class of tourists.
As for agriculture, officials said one plan is to pay cash for produce grown by residents in the villages of the outer islands.
At Sunday’s meeting, authorities stressed that another good part of the plan is to develop the private sector because governments worldwide are known to be inefficient.
Mori said there are other plans in place and other plans that will be brought up, but this plan is an action plan that the governments intend to follow.
“As we approach 2023, going into 2024, we must have a plan to prevent the huge problems that we are anticipating in 2024,” Mori said. “2024 is the year after which all the assistance from the United State will be terminated. Let me make that very clear because there have been rumors that in 2023, the Compact of Free Association is going to terminate.”
Mori said it is not the agreement itself that will terminate, but instead, the financial aspect of the COFA will cease. The U.S. government will no longer supply the FSM with funding for much more than health care and education. The Secretariat of the 2023 Action Planning Committee said health care and education funding coming from the U.S. government will be cut in half after 2023.
In 2023, the FSM government anticipates US$83.4 million in federal grants to help the island governments. However, the next year they will only receive funding from the trust fund interest, which is considerably less. Between 2023 and 2024 funding from the U.S. government unrelated to health care or education will go from $83.4 million to $38.2 million, a decrease of about US$50 million.
“We have no choice but to grow our economy,” Adolph said, adding that the FSM economy has performed dismally over the last 10 years. “It’s going to be challenging.”
Mori said if the FSM does not start doing something now, there is a “very scary future” ahead.
Part of the plan includes the FSM Congress investing in the private sector, in the businesses of the island nations to grow the private sector, Mori said. He said Congress will be putting $15 million a year into the private sector until 2023. “If we concentrate on developing the private sector businesses, I think we have a good chance of surviving a disaster in 2024,” Mori said.