Micronesia, Federated States Of

Micronesia, Federated States of

Introduction Micronesia, Federated States of
Background: In 1979 the Federated States of Micronesia, a UN Trust Territory under US administration, adopted a constitution. In 1986 independence was attained under a Compact of Free Association with the US. Present concerns include large-scale unemployment, overfishing, and overdependence on US aid. Geography Micronesia, Federated States of -
Location: Oceania, island group in the North Pacific Ocean, about three-quarters of the way from Hawaii to Indonesia
Geographic coordinates: 6 55 N, 158 15 E
Map references: Oceania
Area: total: 702 sq km note: includes Pohnpei (Ponape), Truk (Chuuk) Islands, Yap Islands, and Kosrae water: 0 sq km land: 702 sq km
Area - comparative: four times the size of Washington, DC
Land boundaries: 0 km
Coastline: 6,112 km
Maritime claims: exclusive economic zone: 200 NM territorial sea: 12 NM
Climate: tropical; heavy year-round rainfall, especially in the eastern islands; located on southern edge of the typhoon belt with occasionally severe damage
Terrain: islands vary geologically from high mountainous islands to low, coral atolls; volcanic outcroppings on Pohnpei, Kosrae, and Truk
Elevation extremes: lowest point: Pacific Ocean 0 m highest point: Dolohmwar (Totolom) 791 m
Natural resources: forests, marine products, deep- seabed minerals
Land use: arable land: 5.71% permanent crops: 45.71% other: 48.57% (1998 est.)
Irrigated land: NA sq km
Natural hazards: typhoons (June to December) Environment - current issues: overfishing, climate change, pollution Environment - international party to: Biodiversity, Climate
agreements: Change, Climate Change-Kyoto Protocol, Desertification, Hazardous Wastes, Law of the Sea, Ozone Layer Protection signed, but not ratified: none of the selected agreements
Geography - note: four major island groups totaling 607 islands People Micronesia, Federated States of
Population: 135,869 (July 2002 est.)
Age structure: 0-14 years: NA% 15-64 years: NA% 65 years and over: NA%
Population growth rate: NA% (2002 est.)
Birth rate: NA births/1,000 population
Death rate: NA deaths/1,000 population
Sex ratio: NA
Infant mortality rate: NA deaths/1,000 live births Life expectancy at birth: total population: NA years male: NA years female: NA years
Total fertility rate: NA children born/woman HIV/AIDS - adult prevalence rate: NA% HIV/AIDS - people living with HIV/ NA
AIDS:
HIV/AIDS - deaths: NA
Nationality: noun: Micronesian(s) adjective: Micronesian; Chuukese, Kosrae(s), Pohnpeian(s), Trukese, Yapese
Ethnic groups: nine ethnic Micronesian and Polynesian groups
Religions: Roman Catholic 50%, Protestant 47%
Languages: English (official and common language), Trukese, Pohnpeian, Yapese, Kosrean, Ulithian, Woleaian, Nukuoro, Kapingamarangi
Literacy: definition: age 15 and over can read and write total population: 89% male: 91% female: 88% (1980 est.) Government Micronesia, Federated States of
Country name: conventional long form: Federated States of Micronesia conventional short form: none abbreviation: FSM former: Ponape, Truk, and Yap Districts (Trust Territory of the Pacific Islands)
Government type: constitutional government in free association with the US; the Compact of Free Association entered into force 3 November 1986 and is due for renegotiation
Capital: Palikir Administrative divisions: 4 states; Chuuk (Truk), Kosrae, Pohnpei, Yap
Independence: 3 November 1986 (from the US- administered UN Trusteeship)
National holiday: Constitution Day, 10 May (1979)
Constitution: 10 May 1979
Legal system: based on adapted Trust Territory laws, acts of the legislature, municipal, common, and customary laws
Suffrage: 18 years of age; universal
Executive branch: chief of state: President Leo A. FALCAM (since 21 July 1999); Vice President Redley KILLION (since 21 July 1999); note - the president is both the chief of state and head of government head of government: President Leo A. FALCAM (since 21 July 1999); Vice President Redley KILLION (since 21 July 1999); note - the president is both the chief of state and head of government cabinet: Cabinet elections: president and vice president elected by Congress from among the four senators-at-large for four-year terms; election last held NA May 1999 (next to be held NA May 2003); note - a proposed constitutional amendment would establish popular elections for president and vice president election results: Leo A. FALCAM elected president; percent of Congress vote - NA%; Redley KILLION elected vice president; percent of Congress vote - NA%
Legislative branch: unicameral Congress (14 seats; members elected by popular vote; four - one elected from each state - to serve four-year terms and 10 - elected from single-member districts delineated by population - to serve two-year terms) elections: elections for four-year term seats last held 2 March 1999 (next to be held NA March 2003); elections for two-year term seats last held 6 March 2001 (next to be held NA March 2003) election results: percent of vote - NA%; seats - independents 14
Judicial branch: Supreme Court Political parties and leaders: no formal parties International organization ACP, AsDB, ESCAP, G-77, IBRD, ICAO,
participation: IDA, IFC, IFRCS (associate), IMF, IOC, ITU, OPCW, Sparteca, SPC, SPF, UN, UNCTAD, UNESCO, WHO, WMO Diplomatic representation in the US: chief of mission: Ambassador Jesse Bibiano MAREHALAU telephone: [1] [phone] consulate(s) general: Honolulu and Tamuning (Guam) FAX: [1] [phone] chancery: 1725 N Street NW, Washington, DC 20036 Diplomatic representation from the chief of mission: Ambassador Larry
US: DINGER embassy: address NA, Kolonia mailing address: P. O. Box 1286, Kolonia, Pohnpei, Federated States of Micronesia 96941 telephone: [691] 320-2187 FAX: [691] 320-2186
Flag description: light blue with four white five- pointed stars centered; the stars are arranged in a diamond pattern Economy Micronesia, Federated States of -
Economy - overview: Economic activity consists primarily of subsistence farming and fishing. The islands have few mineral deposits worth exploiting, except for high-grade phosphate. The potential for a tourist industry exists, but the remote location and a lack of adequate facilities hinder development. In 1996, the country experienced a 20% reduction in revenues from the Compact of Free Association - the agreement with the US in which Micronesia received $1.3 billion in financial and technical assistance over a 15-year period until 2001. Since these revenues accounted for 57% of consolidated government revenues, reduced Compact funding resulted in a severe depression. Economic activity recovered in 1999-2001. The country's medium-term economic outlook appears fragile due to likely further reductions in external grants made under the US Compact funding. Geographical isolation and a poorly developed infrastructure remain major impediments to long-term growth.
GDP: purchasing power parity - $269 million (2001 est.) note: GDP is supplemented by grant aid, averaging perhaps $100 million annually
GDP - real growth rate: 2% (2001 est.)
GDP - per capita: purchasing power parity - $2,000 (2001 est.) GDP - composition by sector: agriculture: 50% industry: 4% services: 46% (2000 est.) Population below poverty line: NA% Household income or consumption by lowest 10%: NA%
percentage share: highest 10%: NA% Inflation rate (consumer prices): 2.5% (2001 est.)
Labor force: NA Labor force - by occupation: two-thirds are government employees
Unemployment rate: 16% (1999 est.)
Budget: revenues: $161 million ($69 million less grants) expenditures: $160 million, including capital expenditures of $NA (1998 est.)
Industries: tourism, construction, fish processing, craft items from shell, wood, and pearls Industrial production growth rate: NA% Electricity - production: NA kWh Electricity - production by source: fossil fuel: NA% nuclear: NA% other: NA% hydro: NA% Electricity - consumption: NA kWh
Agriculture - products: black pepper, tropical fruits and vegetables, coconuts, cassava (tapioca), sweet potatoes; pigs, chickens
Exports: $22 million (f.o.b., FY99/00 est.)
Exports - commodities: fish, garments, bananas, black pepper
Exports - partners: Japan, US, Guam
Imports: $149 million (f.o.b., FY99/00 est.)
Imports - commodities: food, manufactured goods, machinery and equipment, beverages
Imports - partners: US, Australia, Japan
Debt - external: $66.5 million (FY99/00 est.) Economic aid - recipient: under terms of the Compact of Free Association, the US pledged $1.3 billion in grant aid during the period 1986-2001
Currency: US dollar (USD)
Currency code: USD
Exchange rates: the US dollar is used
Fiscal year: 1 October - 30 September Communications Micronesia, Federated States of Telephones - main lines in use: 11,000 (2001) Telephones - mobile cellular: NA
Telephone system: general assessment: adequate system domestic: islands interconnected by shortwave radiotelephone (used mostly for government purposes) international: satellite earth stations - 5 Intelsat (Pacific Ocean) (2002) Radio broadcast stations: AM 5, FM 1, shortwave 0 (1998)
Radios: 9,400 (1996) Television broadcast stations: 2 (1997)
Televisions: 2,800 (1999)
Internet country code: .fm Internet Service Providers (ISPs): 1 (2000)
Internet users: 2,000 (2000) Transportation Micronesia, Federated States of
Highways: total: 240 km paved: 42 km unpaved: 198 km (1996)
Waterways: none
Ports and harbors: Colonia (Yap), Kolonia (Pohnpei), Lele, Moen
Merchant marine: none note: includes a foreign-owned ship registered here as a flag of convenience: United States 1 (2002 est.)
Airports: 7 (2001) Airports - with paved runways: total: 6 1,524 to 2,437 m: 4 914 to 1,523 m: 2 (2001) Airports - with unpaved runways: total: 1 914 to 1,523 m: 1 (2001) Military Micronesia, Federated States of
Military - note: Federated States of Micronesia (FSM) is a sovereign, self-governing state in free association with the US; FSM is totally dependent on the US for its defense Transnational Issues Micronesia, Federated States of Disputes - international: none

* * *

Republic, western Pacific Ocean.

It comprises the four island states of Yap, Chuuk (Truk), Pohnpei (Ponape), and Kosrae, all in the Caroline Islands. Area: 271 sq mi (701 sq km). Population (2002 est.): 109,000. Capital: Palikir, on the island of Pohnpei, the largest island. The people of the Federated States are Micronesian. Languages: Malayo-Polynesian languages, English. Religions: Christianity (predominant). Currency: U.S. dollar. The islands and atolls extend about 1,750 mi (2,800 km) east-west and about 600 mi (965 km) north-south. U.S. government grants constitute the main source of revenue; subsistence farming and fishing are the principal economic activities. The republic is in free association with the U.S., and it has one legislative house; its head of state and government is the president. The islands were probably settled by people from eastern Melanesia some 3,500 years ago. They were colonized by Spain in the 17th century and came under Japanese rule after World War I. They were captured by U.S. forces during World War II, and in 1947 they became part of the UN Trust Territory of the Pacific Islands, administered by the U.S. The islands became an internally self-governing federation in 1979. In 1982 the Federated States signed a compact of free association with the U.S., which is responsible for Micronesia's defense.

* * *

▪ 2009

Area:

701 sq km (271 sq mi)

Population

(2008 est.): 110,000

Capital:

Palikir, on Pohnpei

Head of state and government:

President Emanuel Mori

      The economy of the Federated States of Micronesia (FSM) continued to deteriorate in 2008 as the economy contracted by an estimated 3.5%. Meanwhile, external debt represented 25.1% of GDP, debt servicing consumed the equivalent of 6% of goods and services, GDP per capita declined (despite net emigration rates of about 2%), and budget deficits held at about 2.5% of GDP. (The fiscal situation was believed to be worse in Kosrae and Chuuk than in the other states.) The FSM remained highly dependent on U.S. government transfers, provided under the amended Compact of Free Association, which represented 65% of the FSM's revenue.

      While these U.S. transfers were declining, they were being offset by payments by the U.S. to the FSM Trust Fund, which would eventually replace compact income, and by bilateral payments from China and Japan. The relative certainty of this other income freed the FSM government from pressure to initiate structural reforms, such as increased private-sector investment and greater fiscal discipline, which might produce higher economic growth rates. As a consequence, government expenditure accounted for some 40% of GDP, and the government provided 51% of the country's employment.

Cluny Macpherson

▪ 2008

Area:

701 sq km (271 sq mi)

Population

(2007 est.): 111,000

Capital:

Palikir, on Pohnpei

Head of state and government:

Presidents Joseph J. Urusemal and, from May 11, Emanuel Mori

      In May 2007 the newly elected congress of the Federated States of Micronesia (FSM) voted for Emanuel (Manny) Mori of Chuuk state as president. Within weeks Mori appointed a new cabinet and introduced a bill to reorganize the executive branch.

      Some of the weaknesses of the FSM's loose federal structure became apparent in 2007. Some $100 million in funds from the U.S. Compact of Free Association, along with an additional $36 million in grants, flowed annually through the FSM government to the governments of the four semiautonomous states, which were responsible for the funds' administration. In 2007 two states, Chuuk and Kosrae, found themselves in serious budgetary difficulties, and Mori, a former president of the FSM Development Bank, attempted to resolve those problems. These economic issues would have been even more serious were it not for the fact that the FSM had a decline in population growth as a result of a high emigration rate (about 21 persons per 1,000 population). The commitment of U.S. support at existing levels until the compact expired in 2023 also effectively reduced some of the pressure on the government to improve economic performance.

Cluny Macpherson

▪ 2007

Area:

701 sq km (271 sq mi)

Population

(2006 est.): 108,000

Capital:

Palikir, on Pohnpei

Head of state and government:

President Joseph J. Urusemal

      In 2006 the Federated States of Micronesia (FSM) continued to receive the bulk of its income from the U.S. under the amended Compact of Free Association. The U.S. provided an annual sector grant of $76 million (which was scheduled to decline by $800,000 each year) and an annual trust-fund contribution of $16 million (due to increase by $800,000 yearly) that would produce funds to replace the sector grant income when the compact expired in 2023. Foreign commercial fishing fleets paid more than $14 million annually for the right to operate in FSM territorial waters, and license fees accounted for 28% of the government's revenues. Marine products accounted for nearly 85% of export revenues.

      In a move to expand trade opportunities, the FSM became the 11th signatory to the Pacific Island Countries Trade Agreement at the inaugural China–Pacific Island Countries Economic Development and Cooperation Forum in April. During the forum Chinese Premier Wen Jiabao announced development grants to the FSM of $2.5 million and the inclusion of the FSM as an Approved Destination Status country, which could significantly improve the country's prospects for tourism.

      FSM spending focused on environmental protection, education, health care, infrastructure, public-sector capacity building, and private-sector development. Government expenditures were intended to increase human capital and private investment and to raise the country's stubbornly low growth rates.

Cluny Macpherson

▪ 2006

Area:

701 sq km (271 sq mi)

Population

(2005 est.): 113,000

Capital:

Palikir, on Pohnpei

Head of state and government:

President Joseph J. Urusemal

      In the March 2005 elections for state representatives to the Federated States of Micronesia (FSM) Congress, 9 of 10 incumbents were returned. Results for one district were withheld and investigated because the number of votes cast substantially exceeded the number of registered voters.

      Under the Compact of Free Association signed in 2004, the U.S. had agreed to provide annual funding of $76 million for 20 years and contributions to trust funds intended for longer-term income. In July 2005 the U.S. Government Accountability Office expressed concern over the rate of return being achieved by the trust funds, the lack of strategic planning, and the quality of reporting. The U.S. also noted that some financial assistance was not being spent in the intended areas.

      The Asian Development Bank reported that although the FSM had received some $2.4 billion in development assistance between 1987 and 2003 (and currently received aid per capita at three to four times the regional average), there had been negative growth (a shrinkage of GDP) over the period. Despite the investment of some $300 million in public-sector enterprises, no successes had been reported.

      In January the nuclear-powered submarine USS San Francisco struck an uncharted undersea mountain in the FSM exclusive economic zone with the loss of one life. The government sought assurances that there was no nuclear leakage or other hazard to the area.

Barrie Macdonald

▪ 2005

Area:

701 sq km (271 sq mi)

Population

(2004 est.): 114,000

Capital:

Palikir, on Pohnpei

Head of state and government:

President Joseph J. Urusemal

      The Federated States of Micronesia (FSM) ratified its renegotiated Compact of Free Association with the U.S. in May 2004. The Compact provided for an investment fund to be built with U.S. contributions of $800,000 a year until the fund reached an estimated $16 million by 2023, at which time income from the fund was expected to replace grants from the U.S. The Asian Development Bank had agreed to provide $800,000 in technical assistance for the management of the fund. Under a new licensing arrangement with the European Union, up to 18 EU vessels would be given approval to fish in the FSM exclusive economic zone from 2005.

      Tensions between the FSM Congress and Pres. Joseph Urusemal heightened in October when the president vetoed legislation that would have given Congress additional staff to provide independent economic and financial advice. The governors of several states indicated that they would block legislation intended to provide an amnesty for criminal offenses by members of Congress and senior government officials. In late 2003, 14 FSM congressional leaders and senior officials had been indicted in a $1.2 million purchasing scam. In August 2004 former speaker of Congress Jack Fritz was found guilty of unrelated fraud and theft charges.

Barrie Macdonald

▪ 2004

Area:

701 sq km (271 sq mi)

Population

(2003 est.): 112,000

Capital:

Palikir, on Pohnpei

Head of state and government:

Presidents Leo A. Falcam and, from May 11, Joseph J. Urusemal

      After four years of negotiations, the Federated States of Micronesia (FSM) signed a renewed Compact of Free Association with the United States in May 2003. The previous compact had expired in 2001. The new compact would run for 20 years, with financial assistance set at $1.8 billion over the period—$92 million a year to support the FSM economy and to establish an investment fund, the returns on which were expected to provide for long-term economic sustainability. The FSM would retain its economic privileges, and its citizens would continue to enjoy visa-free entry to the U.S. The U.S. would retain protection of its strategic and military interests.

      In congressional elections in March, Pres. Leo A. Falcam lost his constituency in Pohnpei state to rival Resio Moses; in Kosrae state former president Jacob Nena was heavily defeated. The new president, elected in May, was Joseph J. Urusemal from Yap state. The new vice president, Redley Killion, was from Chuuk state, where leaders of the Faichuk district, in an attempt to address issues of economic underdevelopment and significant out-migration, continued to seek separation from the FSM and republican status in close association with the U.S.

Barrie Macdonald

▪ 2003

Area:

701 sq km (271 sq mi)

Population

(2002 est.): 109,000

Capital:

Palikir, on Pohnpei

Head of state and government:

President Leo A. Falcam

      Negotiations over the renewal of the Federated States of Micronesia's (FSM's) Compact of Free Association with the U.S. continued in 2002. The FSM was seeking an extension of the present levels of funding, with inflation adjustments. In August the electorate voted on 14 proposed constitutional amendments, which included the establishment of national educational standards with appropriate funding for implementation, the direct election of the president and vice president, and the allowance of dual citizenship. None of the proposals secured the required 75% of the vote needed for approval. Fewer than a quarter of the FSM's 67,000 eligible voters went to the polls.

      In October a national symposium undertook an overview of the economic prospects and development plans for the FSM. The symposium supported the development of proposals for tax reform and the establishment of an independent tax and customs authority. It also addressed concerns over the relationship between national and state governments. The FSM joined the countries entitled to assistance from the European Union (EU) under the Cotonou Agreement, through which the EU assisted less-developed countries. Projects in renewable energy and private-sector development were anticipated. In early July Tropical Storm Chata'an caused 47 deaths and widespread damage in Chuuk state. (See Disasters.)

Barrie Macdonald

▪ 2002

Area:

701 sq km (271 sq mi)

Population

(2001 est.): 118,000

Capital:

Palikir, on Pohnpei

Head of state and government:

President Leo A. Falcam

      Negotiations for the renewal of the Federated States of Micronesia's (FSM) Compact of Free Association with the U.S. continued in 2001. The governments agreed that the FSM's defense and security relationship with the U.S. should remain, private enterprise should be strengthened, and greater financial accountability should be achieved. FSM negotiators sought an annual grant and an annual payment to the FSM Trust Fund, both inflation protected; the U.S. agreed to the payments in principle, but at a lower level and without inflation adjustment. Negotiations were ongoing. A special session of Congress was called in March to consider business pending from the previous session, including the establishment of a retirement plan and housing allocations.

      Voters in the district of Faichuuk overwhelmingly passed a referendum to declare the district a separate state within the FSM. A proposal envisaged a transition phase of three years, although the FSM legislature had yet to decide on the matter. In March Pres. Leo A. Falcam made a state visit to Japan. In October he offered the U.S. use of FSM facilities for staging points in the U.S.-led war on “terrorism” following the September 11attacks.

Barrie Macdonald

▪ 2001

Area:

701 sq km (271 sq mi)

Population

(2000 est.): 118,000

Capital:

Palikir, on Pohnpei

Head of state and government:

President Leo A. Falcam

      A cholera outbreak in Pohnpei caused 19 deaths and affected more than 3,000 people before subsiding in September 2000. The Federated States of Micronesia (FSM) government placed restrictions on movement and on the transport of goods and began vaccinating all members of the population over two years of age.

      With assistance from the International Monetary Fund and the Asian Development Bank, the government remained focused on a reform agenda for the public sector and public service and also on implementing the strategy developed at a 1999 economic summit. Gross domestic product increased by 2% in 1999, and GDP growth of 3% was anticipated for 2000. Under a bilateral arrangement with Japan, funds would be provided for the development of the Tebetik fishing port in Pohnpei.

      In U.S. congressional hearings into the FSM's 1986 Compact of Free Association with the U.S., the General Accounting Office's testimony suggested FSM irresponsibility and the lack of accountability in its expenditure of $1,080,000,000 in Compact funds. In its renewal negotiations, the FSM sought $84 million annually and an additional $20 million annually to be paid to a trust fund until local revenue and trust income could cover the country's expenditures.

      Pres. Leo A. Falcam led delegations to Israel, with which the FSM had developed a close working relationship at the UN, and to China, where he reaffirmed the FSM's commitment to a single-China policy.

Barrie Macdonald

▪ 2000

Area:

701 sq km (271 sq mi)

Population

(1999 est.): 109,000

Capital:

Palikir, on Pohnpei

Head of state and government:

Presidents Jacob Nena and, from May 11, Leo A. Falcam

      In Micronesia's May 1999 elections, Leo A. Falcam of Pohnpei was elected president and Redley Killion of Chuuk vice president. Both were inaugurated in July at the opening of Congress. Falcam identified the protection of cultural values, the buildup of the economy, and the establishment of effective international relations as the priorities for his government. Relations with the United States remained a critical issue, with the Compact of Free Association, which would expire in 2001, scheduled for renegotiation. Under the initial 15-year agreement, the Federated States of Micronesia (FSM) was to have received more than $1 billion; the U.S. had already signaled that accountability for this expenditure would be integral to the renewal. In October the FSM Congress passed controversial legislation providing $6,750,000 for infrastructural projects, making allocations by electoral district and giving elected representatives considerable influence in disbursement. President Falcam opposed the legislation, preferring a mechanism that would give priority to projects of national importance.

      The FSM reached agreement with Palau and Marshall Islands over the common management of commercial fish stocks in their respective exclusive economic zones. Former president Bailey Olter died in February; a businessman from Pohnpei, Olter served two terms as president, 1991–97.

Barrie Macdonald

▪ 1999

      Area: 701 sq km (271 sq mi)

      Population (1998 est.): 108,000

      Capital: Palikir, on Pohnpei

      Head of state and government: President Jacob Nena

      The government of the Federated States of Micronesia continued with its restructuring program in 1998, though an audit during the year was critical of its planning, implementation, and financial controls. The program aimed to reduce the size of the public sector in anticipation of the expiration of the current Compact of Free Association with the United States and indications that the new agreement would not match the $1,355,000,000 that the U.S. granted under the current (1986-2001) compact.

      Throughout the year Micronesia was affected by the drought associated with the El Niño weather phenomenon. In November 1997 legislation to cover water-conservation-and-distribution projects had been introduced, and in February a state of emergency was declared. Many atolls ran out of freshwater, crops were damaged, and public health suffered; there was a noticeable increase in the incidence of hepatitis, gastrointestinal diseases, and cholera. In April U.S. Pres. Bill Clinton approved $6.5 million in disaster relief for water-treatment plants and the distribution of water by barge.

BARRIE MACDONALD

▪ 1998

      Area: 701 sq km (271 sq mi)

      Population (1997 est.): 107,000

      Capital: Palikir, on Pohnpei

      Head of state and government: President Jacob Nena

      In elections that took place during March 1997, the 10 incumbent senators were all returned to office without opposition. In November 1996 Pres. Bailey Olter, who had suffered a stroke in July, was replaced by Vice Pres. Jacob Nena, who became acting president. In May 1997 Nena was sworn in as president.

      Economic difficulties continued as the government tried to plan for the ending in 2001 of the Compact of Free Association with the United States. Over the 15-year life of the current agreement, Micronesia was to receive approximately $1,355,000,000. No indication was given as to future levels of funding. In response to the possible reduction in support, the government in March offered an early-retirement package that sought to reduce the public service employment by 20%. In April the Asian Development Bank announced a loan of $18 million for public-service reform and development of the private sector.

      At the end of December 1996, Typhoon Fern caused damage to private houses, public utilities, and crops. In March U.S. Pres. Bill Clinton declared Yap a disaster area, which thus allowed the U.S. to provide assistance to the hard-hit areas.

BARRIE MACDONALD

      This article updates Micronesia.

▪ 1997

      A republic in the western Pacific Ocean, the Federated States of Micronesia comprises more than 600 islands and islets in the Caroline Islands archipelago. Area: 701 sq km (271 sq mi). Pop. (1996 est.): 106,000. Cap.: Palikir, on Pohnpei. Monetary unit: U.S. dollar, with (Oct. 11, 1996) a free rate of U.S. $1.58 to £1 sterling. President in 1996, Bailey Olter.

      At an economic summit attended by 500 delegates in December 1995, the Federated States of Micronesia started planning for the transition from its economic relationship with the United States. The summit proposed that the Federated States undertake fiscal reform and promote private-sector development. New expenditures were to be devoted to improved health and education services and to development initiatives that would be both environmentally sustainable and culturally sensitive. The nation was also seeking to diversify its sources of aid. To instill more fiscal discipline, the national government would commit funds to regional projects only on a dollar-for-dollar basis with state governments.

      (BARRIE MACDONALD)

      This article updates Micronesia.

▪ 1996

      A republic in the western Pacific Ocean, the Federated States of Micronesia comprises more than 600 islands and islets in the Caroline Islands archipelago. Area: 701 sq km (271 sq mi). Pop. (1995 est.): 105,000. Cap.: Palikir, on Pohnpei. Monetary unit: U.S. dollar, with (Oct. 6, 1995) a free rate of U.S. $1.59 to £1 sterling. President in 1995, Bailey Olter.

      At national elections in March, there were 28 candidates for 14 seats in Congress. Pres. Bailey Olter and Vice Pres. Jacob Nena were both returned in their constituencies. Despite some pressure to introduce the principle of the rotation of high office among representatives from the various regions, Olter and Nena were reelected to office unanimously by Congress. The speaker, Jack Fritz, was also reelected.

      An Asian Development Bank report published in June drew attention to deficiencies in government management that were explained by the rapid expansion of government and the economy in recent years and a consequential shortage of qualified staff. The $87 million received from the U.S. under the Compact of Free Association with the United States was the major component in the government's budget. The next largest source of income was the sale of international fishing licenses, which had contributed an annual average of $14 million in recent years.

      In April the government expressed concern to Japan over planned plutonium shipments through the region.

      (BARRIE MACDONALD)

      This updates the article Micronesia.

▪ 1995

      A republic in the western Pacific Ocean, the Federated States of Micronesia comprises more than 600 islands and islets in the Caroline Islands archipelago. Area: 701 sq km (271 sq mi). Pop. (1994 est.): 104,000. Cap.: Palikir, on Pohnpei. Monetary unit: U.S. dollar, with (Oct. 7, 1994) a free rate of U.S. $1.59 to £1 sterling. President in 1994, Bailey Olter.

      With the summoning of a state and national leadership conference in February 1994, Pres. Bailey Olter initiated a major reexamination of the economic situation and long-term future of the Federated States of Micronesia (FSM). The critical issues facing the country were identified as the lack of infrastructure and the need for joint-venture arrangements for large-scale fishing projects, interisland communication, freight and transport services, and manpower training and development. The nation faced particular difficulty because of its considerable dependence on U.S. aid under the Compact of Free Association and the scaling down and possible cessation of that aid. Under the compact, aid to the FSM was $60 million a year from 1987 to 1991, $50 million a year from 1992 to 1996, and $40 million a year from 1997 to 2001. While additional aid was expected beyond that date, it could not be guaranteed.

      Compared with other components of the former Trust Territory of the Pacific Islands, the FSM lacked the U.S. military facilities in the Marshall Islands and the strategic importance of Palau, both of which were expected to earn long-term rental income from the U.S.

      U.S. aid accounted for more than two-thirds of gross domestic product, and employment was heavily concentrated in the public sector. Agriculture and fisheries were in decline; there was little tourism; and the FSM had not yet developed a significant industrial capacity.

      (BARRIE MACDONALD)

      This updates the article Micronesia.

▪ 1994

      A republic in the western Pacific Ocean, the Federated States of Micronesia comprises more than 600 islands and islets in the Caroline Islands archipelago. Area: 701 sq km (271 sq mi). Pop. (1993 est.): 103,000. Cap.: Palikir, on Pohnpei. Monetary unit: U.S. dollar, with (Oct. 4, 1993) a free rate of U.S. $1.52 to £1 sterling. President in 1993, Bailey Olter.

      In 1993, during its third year of independence, the Federated States of Micronesia continued to build international links. In July Micronesia became a member of the International Monetary Fund and its agencies and paid $1.2 million for a membership levy and subscription. Late in 1992 Pres. Bailey Olter visited China; he reaffirmed Micronesia's commitment to a single-China policy and signed a cooperation agreement. Olter also received the new Spanish ambassador, thus renewing historical and cultural links with a former colonial power in the region.

      Continuing drought in the district of Chuuk (formerly Truk) in the latter part of 1992 brought relief assistance from the U.S. and necessitated water shipments from Guam. Thirty-four islanders from the district of Kosrae (formerly Kusaie) pressed for compensation from the U.S. for health problems, which they charged stemmed from exposure to nuclear radiation. The men claimed that they were hired by the U.S. to clean up at Bikini after the conclusion of nuclear testing in the 1950s. The U.S. government stated that it had no medical or work records for the claimants. Under the Compact of Free Association, non-Marshallese could not claim compensation from the $270 million fund set aside for the Marshall Islands, but they could submit a direct claim to the U.S. (BARRIE MACDONALD)

      This updates the article Micronesia.

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