Federated States of MICRONESIA
stars in the night sky, the islands of the Federated
States of Micronesia (FSM) are dotted across a huge swathe of the
western Pacific Ocean. Formerly part of a US Trust Territory, they achieved
independence in 1979, uniting the four states of Chuuk, Kosrae,
Reducing the size of the public sector and boosting the private sector are central to the economic reforms. As FSM president Leo A. Falcam explains: We recently entered into a four-year sector development programme with assistance from the Asian Development Bank (ADB) that will address some of the institutional and legal constraints that in the past made it difficult for the private sector to grow.
much of the past 15 years, GDP growth has hovered around two per cent
annually. But the President says he is optimistic about the potential
for growth in tourism, small
has as yet been only partially developed, largely out of a concern to
protect the indigenous culture and the environment. As a small island
nation, our biggest concern is the preservation of our environment for
this and future generations of Micronesians to enjoy and prosper in,
the President says.
fishing enterprises are prime candidates for privatisation. We are
working closely with our partners in the four states to move this process
forward, Mr Falcam says. We are also looking closely at telecommunications
and public utilities.
Regarding foreign investment, Mr Falcam recognises that more needs to be done to provide a better legal environment and a range of incentives. The four-year development programme supported by the ADB addresses this and other critical issues that will encourage new investments, including joint ventures, not only from foreign sources but within and between our four states as well, he says.