November 14, 2012

By Bill Jaynes
The Kaselehlie Press

November 8, 2012 Palikir, Pohnpei-With the financial support of Australian AID, the FSM convened a Development Partners Forum in Palikir on November 7 and 8. The intent of the forum was to discuss ongoing initiatives, challenges, opportunities, and priority areas for FSM economic development under the theme "Looking to the Future".

President Manny Mori led the FSM Delegation to the Forum which included State and National leaders from the Executive and Legislative branches of the five governments. On the other side of the table was a host of international development partners: the Asian Development Bank, the Commonwealth of Australia, the Peoples' Republic of China, the European Union, the Food Agricultural Organization, the Forum Fisheries Agency, Israel, the International Monetary Fund, Japan, the Pacific Islands Forum Secretariat, the Pacific Development Bank, the Secretariat of the Pacific Community, Singapore, the United Nations Joint Presence, the United States of America, the World Bank, and the World Health Organization.

On a third side of the table were representatives of the FSM Private Sector and Civil Society Organizations. Ihson Nahnken, Ihlen K. Joseph of Pohnpei, and former FSM Vice President Redley Killion were the co-chairs of the meeting. In his keynote address, President Mori defined the three main obstacles facing the nation that serve to hinder the nation's development.

He listed the Compact Trust Fund as the first of three. The Compact Trust Fund is intended to replace the financial contributions of the United States to the FSM under the Compact of Free Association after those contributions "phase out" as scheduled in 2023. The performance of the trust fund has not been good since it was established, and the global financial crisis has not helped matters. President Mori said the Trust Fund needs an immediate injection of funds in order to meet its intended purposes by 2023.

As a second principal obstacle, President Mori listed the lack of sustainable economic growth driven by a strong private sector, in particular in the areas of agriculture, fisheries, tourism, and renewable energy. He listed the impacts of climate change, sea level rise, and the adverse effects on environment and food security as the third, amongst the obstacles to the FSM's development.

The FSM gave an overview of FSM's economic development since its inception and identified priority areas to spur the local economy including: enhancement of agricultural production, and increasing the production of value added agriculture products; maximizing the benefits of FSM's fisheries resources, and further developing aquaculture; enhancing tourism products, and improving the quality of services; and enhancing the development, and expansion of clean, renewable energy sources with a view to lessening FSM's dependency on imported fossil fuels. The FSM also acknowledged that further improving the 'business enabling environment' would be critical to attract sound investment.

The FSM Health Department briefed the forum on FSM health priorities. The presentation said that the FSM needs a reorientation toward community health through the upgrading of current health infrastructure and human resources; preventing and controlling Non-Communicable Diseases (NCD's); controlling and eliminating tuberculosis and leprosy; improving prevention of communicable diseases, community health mapping and distribution of skills; establishing a national diagnostic and treatment facility; enhancement of traditional medicine; and the support of COM-FSM nursing and public health programs.

The FSM Education Department provided a presentation on education services in the nation. Among many other things, it said that although substantial Compact grants are dedicated to education, challenges remain. The presentation said that the FSM had identified a number of priorities, including the improvement of quality learning and teaching, and the introduction of short and long term Degree Programs in new fields such as telecommunication.

The FSM told the Development Partners that the key priorities for the nation, in order to enhance environmental management and adaptation to climate change include: solid waste management, inshore marine ecosystems and coastal fisheries, environmental planning and impact assessment, improving environmental governance, mainstreaming climate change issues into sectoral planning processes, and financing for adaptation projects.

In another presentation the FSM told the Development Partners that the nation was in the process of developing its Overseas Development Assistance (ODA) Policy. The plan will establish the "underlying architecture" for how it will manage ODA. The policy will prioritize 'aid effectiveness over volume'. It will align support with the FSM's priorities. It will prioritize 'outcomes rather than inputs', transparency in the decision-making process, enhanced coordination among Development Partners, as well as between national and state governments. It will also engender community ownership, including the involvement of non-state actors such as the 'civil society'.

According to the Forum's draft communiqué, development partners said that based on the experience of other countries, "the magnitude of the fiscal adjustment being faced by FSM is enormous, and that the right balance needs to be struck between the mix of expenditure and revenue measures."

The partners noted that policy initiatives are being undertaken by National and State governments "to maintain macroeconomic stability with a view to achieving economic growth objectives, including the adoption of the 'Long Term Fiscal Framework', and the tax reform package.

"Development Partners recalled past and ongoing assistance programs to the FSM and shared the following observations:

o Human resources development is 'key' for nation and economic building, and FSM could learn from other countries' experiences;

o Improving Development Partners' coordination is crucial, including enhancing alignment between national and regional priorities, as well as improving coordination among FSM stakeholders;

o Security and safety for volunteers and staff providing technical assistance and capacity building to the FSM is crucial for the sustainability of the programs;

o The need for a 'right balance' between expenditure reductions and government revenue;

o The need to identify, capitalize on, and replicate successes; and

o The need for FSM to take ownership of development programs and support."

The Development partners also stressed the need for transparency and accountability in managing and implementing ODA resources.

"The Forum recognized the importance of developing an action plan, to ensure the implementation of the priorities identified in the Development Framework," the draft communiqué on the meetings concluded.