Federated States of Micronesia

Key facts

Geography/Demographics

Official Name - Federated States of Micronesia

Land Area - 702 sq km, 607 islands

Population - 108,105 (2007 est)

Capital City - Palikir (Pohnpei Island)

Religion - Roman Catholic 50%, Protestant 47%, other and none 3%

Official Languages - English, Pohnpeian, Chuukese, Kosraean,Yapese, Kapingamarangi, and others.

Currency - US Dollar

EEZ - 2,978,000 sq km

Political

Political System - Constitutional government in free association with the US; Compact of Free Association entered into force 3 November 1986

National Government - The President and the Vice-President are chosen from among the four-year representatives. Cabinet is nominated by the President and members are subject to approval by Congress. President Joseph Urusemal was elected by Congress in May 2003 following the general election in March 2003.

National Legislature - The National Congress, a single chamber federal legislature, meets at Palikir, the FSM capital and administrative centre in Pohnpei. The National Congress has 14 members, including one representative from each of the four states elected for a period of four years. The remainder of the Congress are elected for two year terms from electoral districts based on population size. Each of the four states elects its own Governor and state legislature in separate elections.

Last Election - 2007
Next Election Due - 2011

Head of State - President Emanuel (Manny) Mori
Head of Government - President Emanuel (Manny) Mori

Main Political Parties - No formal parties

Economic

GDP - US$235.9 million (2007)

GDP per capita - US$1,840 (2007)US$235.9 million (2007)

Real GDP growth - -2.9% (2008)

Exports - US$12.98 million (2005)
Main Exports - Copra, bananas, black pepper, fish and garments

Imports - US$130million (2005)
Main Imports - Food, manufactured goods, machinery and equipment, beverages
Import Partners - US, Japan, Australia

Current Account - -US$38.4 million (2006)

Inflation - 3.5% (2007)

 

New Zealand Trade

NZ Exports (fob) - NZ$1.176 million (July 2009)

Main Exports - Wood, medicines, electric wire

NZ Imports (cif) - Zero (July 2009)

Main Imports - Nil

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Overview

The Federated States of Micronesia (FSM) is a group of 607 small islands (part of the Caroline Islands chain) totalling 702 square kilometres of land and stretching 2,900km. About 65 of the islands are inhabited. FSM consists of four states: Pohnpei, Chuuk (formerly Truk), Yap and Kosrae.

History

The Caroline Islands have been inhabited for over 4000 years. The first European explorers, Portuguese and then Spanish, reached what is now modern day FSM in the sixteenth Century. Spain claimed sovereignty over the islands until 1899 when Germany purchased the FSM islands after Spain lost its other Pacific possessions following the Spanish American War. At the beginning of World War I Japan occupied the FSM islands and began formal administration of the islands under the League of Nations mandate in 1920. In 1947 The United States entered into a trusteeship with the UN Security Council and became the administering authority of the current four states Pohnpei, Chuuk, Yap and Kosrae - as well as the Marshall Islands, Palau and the Northern Mariana Islands.

On 10 May 1979 Pohnpei, Chuuk, Yap and Kosrae ratified a new constitution to become the FSM. The neighbouring trust districts of Palau, Marshall Islands and Northern Mariana Islands chose not to participate.

FSM signed a Compact of Free Association with the United States in November 1986, marking the FSM as an independent nation. The United States retains responsibility for defence and security matters.

A renegotiated Compact signed in May 2003 provides for a further reduced funding of US$1.8 billion over the next 20 years, some of which will be used to build up a trust fund to replace direct financial assistance from 2024.

 

Political Situation

The National Congress, a single chamber federal legislature, meets at Palikir, the FSM capital and administrative centre in Pohnpei. The National Congress has 14 members, including one representative from each of the four states elected for a period of four years. The remainder of the Congress are elected for two-year terms from electoral districts based on population size. There are five representatives from Chuuk, three from Pohnpei and one each from Yap and Kosrae. The President and the Vice-President are chosen from among the four-year representatives. Cabinet is nominated by the President and members are subject to approval by Congress.

Each of the four states has its own constitution, elected legislature, and governor. The state governments maintain considerable power, particularly regarding the implementation of budgetary policies.

FSM has been independent in free association with the United States since 1986.

Economic Situation

Economic development in FSM is constrained by its remote and dispersed island geography and fragile environment. As a result, the FSM is heavily dependent on funding provided by the United States under the terms of the Compact, and other external aid. The financial component of the Compact, worth US$1.8 billion over 20 years, is distributed at US$76.2 million annually. This will be reduced annually by US$0.8 million until 2023. Compact funds are distributed via grants to the six sectors of education, health, infrastructure, public sector capacity building, private sector development and the environment. Under the Compact a Trust Fund has been established, which is intended to provide a source of revenue once compact funding expires.

FSM has rich fisheries resources, particularly skipjack, yellow fin and big eye tuna. Fish exports, mainly to Japan make up 80% of FSM's total exports. FSM earns an estimated US$20 million annually from the licensing of foreign vessels fishing in its Exclusive Economic Zone, and has fishing agreements with the United States, Japan, Taiwan and Korea. Japan has also made substantial investments in the development of port infrastructure in FSM. Development of the domestic fishing industry is part of FSM's long term strategy.

The national and state level governments employ over 50% of the work force, accounting for 40% of GDP. The FSM is undergoing a programme of economic reform agreed with the Asian Development Bank (ADB), to tackle problems arising from a sizeable trade deficit and growing public sector debt. This includes a 20% reduction in the public sector.

There is potential for the development of the tourism industry. FSM attracts approximately 15,000 visitors per year, mainly from Japan and Taiwan, by virtue of some of the best World War II wreck diving in the world, and the 1,000 year old stone city of Nan Madol in Pohnpei. However, growth is hindered by infrequent direct air services and hotel accommodation.

 

Foreign Relations

Under the Compact of Free Association, the FSM Government conducts its own foreign relations. Its principle bilateral relationship is with the United States. It has diplomatic missions in Washington, Honolulu, Guam, Tokyo and Suva, a permanent mission to the UN, and has established diplomatic relations with over 40 countries. There are four resident diplomatic missions in FSM - Australia, the United States, the Peoples Republic of China and Japan.

FSM became a member of the Pacific Islands Forum in 1987 after holding observer status since 1980. It hosted the Forum in 1998. Pohnpei is the Headquarters for the newly instigated Western and Central Pacific Fisheries Commission.

FSM became a member of the UN in September 1991 and has been active in regional affairs, with a focus on environmental issues, fisheries and transportation issues. FSM is a member of the Pacific Islands Forum (playing host in 1998) and a number of other regional institutions including the South Pacific Community (SPC), Pacific Islands Development Program, Forum Fisheries Agency, South Pacific Regional Environment Program, and the Council of Micronesian Chief Executives. FSM is a member of the Asian Development Bank (ADB), the World Health Organisation, the International Civil Aviation Organisation, the Economic and Social Commission for Asia and the Pacific (ESCAP, the UN Development Program, the Food and Agriculture Organisation and the Asia Pacific Parliamentary Union.

Defence

The US is responsible for all defence and security issues under the terms of the Compact of Free Association.

Bilateral Relationship

New Zealand's links with FSM centre on shared membership of regional organisations including the Pacific Islands Forum, and common interests in issues affecting the region such as climate change, development coordination, sustainable fisheries management and regional security.

New Zealand Official Development Assistance (NZAid)

New Zealand Official Development Assistance to FSM is covered under NZAID's regional thematic programmes in the areas of education, health, environment, good governance and emergency preparedness and disaster management.

Representation

New Zealand High Commissioner in Kiribati is accredited to Federated States of Micronesia as Ambassador.

 

Travel Advice

The Safetravel website provides a travel advisory for travellers to Federated States of Micronesia [external link].

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