Federated States of Micronesia Country Brief
Introduction
The Federated States of Micronesia (FSM) is an independent country in a Compact of Free Association with the United States, first signed in 1986. It consists of 607 volcanic islands spread over 3 million sq km of ocean, just north of the equator. The President of the Federated States of Micronesia, Emanuel Mori, is both Head of State and Head of Government. Alik Alik is Vice President.
Political Overview
Government
The FSM has an American-style constitution adopted in 1978 which provides for a government composed of an executive branch, a legislative branch and a judicial branch. Each of the four states of the Federation (Pohnpei, Chuuk, Kosrae and Yap) has its own constitution, an elected governor, a lieutenant governor and a unicameral legislature. The National Congress is also unicameral and consists of 14 members. Four senators - one from each state - serve four-year terms. The remaining ten members represent single member districts based on population and serve two year terms. Both the President and the Vice-President are elected by the Congress from among its four-year members and both serve a four-year term. An appointed cabinet supports the President and Vice President. There are no formal political parties.
President Mori from Chuuk was elected to the Presidency by Congress on 11 May 2007, in the first regular sitting of Congress following national elections on 6 March 2007. Senator Alik Alik, from Kosrae, was elected as Vice President.
Under the Compact of Free Association, the FSM controls all domestic and foreign policy with the exception of defence and security, for which the United States is responsible. The compact also provides direct financial assistance from the US for the development of the FSM. Whereas the original compact had provided US$1.3 billion from 1986-2001, the new compact provides less generous levels of funding, but still equivalent to US$1.8 billion over twenty years. That amount includes contributions to a trust fund which, from 2024, will replace direct financial assistance. FSM itself contributed US$30 million to the trust fund in 2004. From 2007, annual grants from the US to the FSM government will decrease each year, while contributions to the trust fund will increase accordingly. As well as financial assistance, the compact also grants FSM citizens access to US federal programs, and favourable provisions for travelling to and working in the United States.
Economic Overview
The economy of FSM is dominated by the government and largely reliant on external grants, with only a modest private sector. The fisheries sector is regarded as having the greatest development potential. With an EEZ of 2.5 million square kilometres, the FSM bestrides major equatorial tuna migratory paths and the fishing industry has been boosted by the construction of cold storage facilities and processing plants. In 2006, foreign commercial fishing fleets paid over US$13 million for the right to operate in FSM territorial waters. These licensing fees account for nearly ten per cent of domestic budgetary revenue. Additionally, exports of marine products, mainly re-exports of fish to Japan, account for nearly eighty-five per cent of export revenue.
The tourist industry is another area of potential for the FSM, particularly diving and eco-tourism. Some 15,000 tourists visit the islands each year. Tourism development is, however, constrained by limited airline links, limited availability of infrastructure, including roads, power and water, and by geographical isolation.
Bilateral Relationship
Australia established diplomatic relations with the FSM in July 1987 and the Australian Embassy in Pohnpei was opened in November 1989. We continue to enjoy a close and friendly relationship.
An Australian parliamentary delegation visited FSM in November 2005 and a reciprocal visit was made by a parliamentary delegation from FSM to Australia in August 2006.
Australia first provided small-scale development assistance to the FSM in 1979 following the establishment of constitutional self-government. The development assistance program has increased since then and in 2008-09 totalled approximately $1.52 million. Assistance focuses on governance, scholarships, technical assistance, small grants and building up the border-management system. In January 2009, Australia provided FSM with US$50,000 in immediate emergency assistance for damage caused by tidal surges and storms.
In recognition of the FSM's vast EEZ and the importance of the fisheries sector to its long-term economic viability, Australia has provided three Pacific Patrol Boats worth A$18 million to FSM and continues to support its maritime surveillance through assistance with a bilateral Defence Cooperation Program.
FSM has provided two police officers to work as a part of the Regional Assistance Mission to Solomon Islands Participating Police Force since March 2006.
Bilateral Economic and Trade Relationship
Australia is one of the FSM's main sources of imports after the US. Australian exports to the FSM in 2007-08 totalled $7 million (principally live animals and preserved meat). Australia's imports from the FSM in the same period totalled $1 million (principally clothing).
Foreign Relations
FSM is a member of the UN and the Pacific Islands Forum. The United States is responsible for FSM's defence under the compact.
Visitor Information
Australians travelling to FSM are advised to consult the Smartraveller travel advice.
Updated June 2009