WENO, Chuuk—On January 25th, 2022, the 2nd day of the 2nd Resources & Development Conference was held in the Chuuk State Government Complex. The day’s sessions covered the Pacific Regional Oceanscape Program and the Economic Recovery & Resilience Project, the Green Climate Fund grant on Climate Resilient Food Security for Farming Households Across the FSM, and the Honorable Eugene Amor, Secretary of the Department of Finance & Administration, meeting with the Chuuk State private sector on the Tourism Sector Mitigation Fund and related Social Protection programming during the course of the COVID-19 Pandemic. This release—which is only slightly shorter than À la recherche du temps perdu—will cover these sessions, and will intermingle full titles and initialisms when appropriate for easier readability.
Structured for inclusivity and transparency, the Conference engages attendees through breakout sessions with emphases on dialectic, interaction, and truth-telling.
The first session of the day was with regards to the Pacific Regional Oceanscape Program (PROP). Funded by the International Development Association (IDA) grants under the World Bank, Phase One of PROP was in effect from 2015 to 2021.
PROP’s objective was to strengthen the management of selected Pacific Island oceanic and coastal fisheries, and the critical habitats upon which they depend, with the intent that this would provide the basis for sustainable and increased economic benefits from the resource. The components funded by the IDA grants were for the sustainable management of oceanic fisheries, the sustainable management of coastal fisheries, the conservation of critical fishery habitats, and coordination, monitoring, and evaluation. In a layperson’s terms: we wanted to know what we were fishing, how much we were fishing, and how we were doing the fishing—all so that we could collectively make more money from the fishing, while also ensuring that the number of fish in the water tomorrow is the same or more than the number of fish today.
For the sustainable management of oceanic fisheries, the inputs consisted of the implementation of Fisheries Information Systems (databases etc.), increased monitoring on fishing vessels via observers, increased surveillance patrols, institutional strengthening and training, and the development of a Competent Authority. The results were greater compliance with the Vessel Day Scheme (VDS), greater VDS monitoring and transparency, expanded VDS coverage, increased VDS flexibility, and an introduction-compatible system to long-line fisheries.
Citizens who read the above and ask themselves “What is a Vessel Day Scheme?” will appreciate the following explanation. After 1992, through the Parties to the Nauru Agreement (PNA), the FSM, Solomon Islands, the Republic of Kiribati, the Republic of the Marshall Islands, Papua New Guinea, the Republic of Nauru, and the Republic of Palau, have worked to collaboratively manage tuna stocks within their waters. By cooperating with our neighbors and embracing the Pacific Way, through the use of the VDS, PNA members set the total number of days that can be fished in our combined waters, and the apportionment of the total number of days between each country. These allocations of fishing days are set for 12-month periods and can be set up to 3-years in advance. The practical effect is dramatically increased fishing revenues as well as assistance towards ensuring fishing stocks remain healthy, of which the Pacific can continue to boast one of the most well-managed tuna fisheries globally.
If the FSM’s oceanic fishery is approximately healthy, the same is not true, unfortunately, for the FSM’s coastal fishery. The key observations from the PROP Coastal Fisheries Resource Assessment include that overfishing is occurring throughout the FSM, in all four of its states, and is most acute near population centers. There is significant reduction in catches that threaten food security, health and nutrition, income, and employment in coastal communities—which for the FSM’s context is virtually all of them. Management of coastal fishery resources is weak or non-existent in most areas, and Marine Protected Areas (MPAs) are described as “generally not working.” Action, it was reported, needs to be taken sooner, rather than later.
The key problems cited to support the aforementioned observations are that FSM fishers engage in destructive fishing techniques, such as night-time spearfishing, fishing of spawning aggregations, and small mesh gill nets. Data to monitor the stocks is insufficient and out of date. Enforcement of fisheries regulations is weak, and awareness of the threats of overfishing, environmental degradation, and pollution, is low. The Government notes that—as these observations and problems were being discussed—several questions posed by the audience were not in response to the threats facing the Nation’s coastal fisheries, but rather in regard to how individual state governments and persons can benefit more from revenues generated by oceanic fisheries, which are otherwise largely allocated towards supporting the FSM Trust Fund and public projects across the Nation.
It was described that eleven (11) thematic areas and forty-four (44) specific actions were identified to ensure sustainable development of inshore fisheries. Chief among these include a proposal to develop Inshore Fisheries Legislation & Policy at the National and State level, so as to reflect modern sustainable practices and expectations, and to provide a legal basis for the sustainable management and subsequent development of the coastal fisheries resources of the Nation.
Citizens, perhaps particularly those newly aware of the threats facing the FSM’s coastal fisheries, and the already developed proposals towards solving these problems, are encouraged to review the PROP presentation here: https://gov.fm/files/FSM_PROP1_OUTCOMES_RD_Conf.pdf
The second session of the day focused on the Pacific Regional Oceanscape Program—economic Recovery/Resilience (PROPER) which, as its name suggests, is the successor program to PROP. While PROP was in effect from 2015 to 2021, PROPER was approved by the FSM in May 2021, and is inclusive of $10,000,000 of funding from the National IDA, and an additional $20,000,000 requested from the regional IDA. PROPER intends to be a 4-5 years-long project, again focusing on oceanic and coastal fisheries.
For coastal fisheries, PROPER intends to improve management by developing appropriate policies, engaging in additional monitoring, conducting studies that enhance the evidence base for sound decision-making, and scaling up community-based fishing. PROPER would also intend to diversify the coastal fisheries sector to reduce excess fishing, such as by developing central markets or marinas, creating fishing co-ops or associations with proper financing, developing aquaculture opportunities, shifting to nearshore pelagic fishing, and emphasizing biosecurity and safety at sea (e.g. by painting your boat orange so it can be seen by the U.S. Coast Guard, wearing a life jacket while in a boat, and carrying a personal locator beacon in the event you and your boat become lost).
For oceanic fisheries, PROPER intends to secure public revenue and expand economic benefits, such as through the FSM Fisheries Investment Policy, and developing the Nation’s Blue Economy (i.e. combining Climate Change adaptation and mitigation efforts, environmental protection, and tackling marine pollution together).
Citizens are encouraged to review the PROPER presentation here: https://gov.fm/files/PROP_2_Concept.pdf
The next session of the day was on the Climate Resilient Food Security for Farming Households Across the FSM project, generously funded by the Green Climate Fund (GCF). The $9,600,000 program, approved by the GCF’s Board in March of 2021, has a 5-year duration, and is the first comprehensive national effort to focus on increasing the resilience of the FSM’s most vulnerable communities to food insecurity in the face of Climate Change.
Targeting all households in the FSM’s high islands that undertake in agricultural activities, the project seeks to ensure a minimum of 68,250 direct beneficiaries by establishing an enabling environment for adaptive action and investment, enhancing food security of vulnerable households by introducing Climate Sustainable Agricultural Practices, and strengthening climate-resilient value chains and market linkages across the agriculture sector.
On the premise that the above language is arguably rather technical and exact, a question was posed: “How does my father-in-law, a farmer whose only source of income is the sakau and betelnut he grows, and whose food, aside from imported rice, is the taro, papaya, and breadfruit he grows, and who lives up in the mountains of Pohnpei State, benefit from this program?” The answer given was that the father-in-law might be able to, for example, benefit from training on how to increase his agricultural yields; how to diversify the types of food he grows; and tools and information on how to use the raw materials (e.g. lemons) and make a product from them (e.g. lemonade).
While the GCF project is financed by the GCF, and uses Micronesia Conservation Trust to manage funds and ensure project management milestones are completed, two other projects were also discussed in the session under separate donor partners: the Micronesia COVID-19 Response program (i.e. “MICCO19”), in partnership with the Pacific Community (SPC), and the Asian Development Bank (ADB)-funded FSM Social Protection programming, of which the latter’s most well-known is the Low Income Household Assistance Program but also includes funding for a food security program.
MICCO19 addresses food and nutrition security impacts caused by COVID-19 through strengthened sustainable and resilient food systems and good governance. Activities in the project include strengthening biosecurity services capacity, upgrading sustainable production, integrating a people-centered approach across project work to improve food security, and supporting local-level governance on people-centered food security and COVID-19 response. Unlike the GCF-funded food security program and the ADB-funded food security program, MICCO19 is also implemented in the Republic of Palau and the Republic of the Marshall Islands.
For the FSM’s purpose, it was advised there was $500,000 each for the States of Yap, Chuuk, Pohnpei, and Kosrae. It was described that the project is flexible on the premise that it allows individual states to choose the projects they want, and by extension to have the freedom to determine what success looks like and navigate the means for how to make that success occur.
Regarding the ADB-funded food security program, which was part of the $14,000,000 FSM Social Protection programming developed by President Panuelo, there was significant discussion on whether or not the program was still viable, with funding available for disbursement.
When originally discussed in a release dated December 15th, 2020, the food security program was described to be for community groups and low-income households, with the intent to provide subsistence livelihood training, and an equitable distribution of seeds, planting, and fishing materials, to vulnerable citizens at no cost. Approximately $2,000,000 was originally scheduled for this purpose, though due to the enormous popularity of the other Social Protection programming, such as the Low-Income Household Assistance program—described further below in this (lengthy) release—funding was shifted from the food security program, and so what had been a $2,000,000 program became a $1,000,000 program. Staff from the Office of the President confirmed that this was a decision made by the Office of the President, as opposed to the Secretary of the Department of Resources & Development, her staff, or any other party.
Understandably, much of the discussion revolved around what public servants at the state level can do to both increase the funding of the program to its original level and, perhaps more importantly, how the funding can be expended for the program’s applicants, who have applied for assistance, and are keen for assistance, but have not yet received any, leaving state officials concerned that they are unequipped to provide satisfactory answers to citizens in their communities.
It was described that approximately 38 applications for the program were submitted from Chuuk, with 42 applications from Kosrae, 52 applications from Pohnpei, and 11 applications from Yap. All of these applications from citizens were advised to be approved by the appropriate State Governments, and presently sitting with the National Government for both reviews by an appropriate committee and the Department of Finance & Administration. It was clarified that whatever funding assistance is granted would be used in the form of payments to vendors for seeds, planting, and fishing materials (as opposed to direct payments to citizens ala the Low-Income Household Assistance program).
The final session of the day was a meeting between the Secretary of Finance & Administration and Chuuk State’s private sector to discuss the FSM-funded Tourism Sector Mitigation Fund (commonly referred to as the FSM Economic Stimulus Package), the FSM-funded Stranded Citizens Assistance Program, the U.S. Department of Labor-funded Pandemic Unemployment Assistance program (PUA) and Federal Pandemic Unemployment Compensation program (FPUC), and the ADBfunded FSM Social Protection programming (and, of these, specifically the Low-Income Household Assistance Program).
The meeting began with the striking observation that real GDP growth for the FSM was down nearly 6% in Fiscal Year 2020 as a result of the COVID-19 Pandemic, and down nearly 2% for Fiscal Year 2021. This can be most visibly seen, perhaps, in how tourism sector revenue was impacted, which brought in $27,300,000 in Fiscal Year 2019, for example, but only $15,500,000 in Fiscal Year 2021.
Public Law 21-211, which established the Tourism Sector Mitigation Fund, ensured that the FSM National Government would pay 100% of all salaries and wages, 100% of all Gross Revenue Taxes, 100% of all utility costs, and 100% of all interest payments on existing loans with FSM-based banking institutions for eligible tourism sector businesses. Eligible businesses must be taxpaying businesses that incur a loss of 10% or more in revenue, and beyond the most immediately obvious categories of businesses in this sector (e.g. hotels, restaurants, diving operators), also included are exporters, apartments/rentals, taxi companies, LP gas distributors, cinemas, bars, beauty salons, water bottling companies, and laundromats.
Citizens who review the aforementioned list and find themselves wondering “Why are laundromats considered a tourism sector business in the FSM?” will appreciate the following explanation. While a majority of hotels in the FSM may include an attached restaurant, few carry laundry services within their own premises; the bulk of hotels in the FSM either have or had, established contracts with laundromats that were the precise revenue source that made these laundromats financially viable. Fewer tourists in the FSM, by extension, necessarily means that there are fewer persons to ask their hotel to wash their clothes while they take a taxi down to the beauty salon to get a massage, and to the bar for a beverage, after a long day of exploring this Paradise in Our Backyards.
As of January 2022, forty (40) businesses in Yap State have benefitted from the Tourism Sector Mitigation Fund, for a total of $1,182,363 in direct stimulus and $266,259 in interest paid, for a combined total of $1,448,662.
Forty-three (43) businesses in Chuuk State have benefitted from the Tourism Sector Mitigation Fund, for a total of $1,984,312 in direct stimulus and $357,590 in interest paid, for a combined total of $2,341,902.
One hundred and twenty (120) businesses in Pohnpei State have benefitted from the Tourism Sector Mitigation Fund, for a total of $3,134,892 in direct stimulus and $440,883 in interest paid, for a combined total of $3,575,775.
Sixty-four (64) businesses in Kosrae State have benefitted from the Tourism Sector Mitigation Fund, for a total of $601,987 in direct stimulus and $41,767 in interest paid, for a combined total of $643,754.
Taken together, 267 businesses in the FSM have benefitted from the Tourism Sector Mitigation Fund, with $6,903,554 in direct stimulus payments, $1,106,499 in interest payments, and a combined total of $8,010,053.
It was reported that the FSM Development Bank has provided a total of $2,500,000 in loans to three hundred (300) small and micro enterprises, from a pool of 1,054 applications.
Regarding the Pandemic Unemployment Assistance (PUA) Program and Federal Pandemic Unemployment Compensation (FPUC) Program, both of which have concluded, it was described that the FSM had a total of 1,538 eligible persons receive assistance from these programs, of which $7,549,258 was via PUA and $13,424,700 was via FPUC, for a combined total of $20,973,958.
In terms of state breakdowns, for the State of Yap, there were 263 persons who received PUA and/or FPUC assistance, of which $1,215,545 was sourced from PUA and $2,232,300 was sourced from FPUC, for a combined total of $3,447,845.
For the State of Chuuk, there were 406 persons who received PUA and/or FPUC assistance, of which $2,093,701 was sourced from PUA and $3,896,100 was sourced from FPUC, for a combined total of $5,989,801.
For the State of Pohnpei, there were 722 persons who received PUA and/or FPUC assistance, of which $3,367,798 was sourced from PUA, and $5,859,600 was sourced from FPUC, for a combined total of $9,227,398.
For the State of Kosrae, there were 147 persons who received PUA and/or FPUC assistance, of which $872,214 was sourced from PUA, and $1,436,700 was sourced from FPUC, for a combined total of $2,308,914.
U.S. law understandably only provided the PUA and FPUC programming to serve citizens of the FSM, and citizens of the United States who reside in the FSM. The FSM National Government, however, having taken the view that citizens of the Republic of the Philippines, the Republic of Fiji, Japan, Solomon Islands, the People’s Republic of China, and so forth, who choose to reside in this Paradise in Our Backyards, are nonetheless as deserving as any other person to financial assistance in challenging times, purposefully built its own FSM-funded program for assisting unemployed non-citizens. Otherwise operating under the same rules as the PUA and FPUC programming, but relying on FSM-generated revenues, as of January 2022 there has been $152,379 of assistance delivered to unemployed non-citizens residing in the FSM.
Over the nearly two years that the Declaration of Public Health Emergency has been in effect, many FSM citizens have been stranded abroad and unable to return home. For the purpose of the Stranded Citizens Assistance Program—which was announced in May 2020, with an original allocation of $300,000 and with the purpose of providing stranded individuals $1,000 and stranded families $1,500—the practical effect of hundreds of citizens unable to see their loved ones is that the program expanded its mission as well as its funding.
As of January 2022, $1,174,000 has been delivered to stranded citizens—of which, notably, $619,500 has been directed to residents of Chuuk State. (This is partly on the premise that Chuuk State is the most populous in the FSM, partly on the premise that Chuuk State was the last to begin repatriation flights, and partly on the premise that residents of Chuuk State migrate out of the FSM at a higher rate per capita than other states).
The final program discussed in the session was the ADB-funded Low-Income Household Assistance Program. Originally setup with $6,000,000 of assistance, the program was strengthened both by pulling funding from the food security program under the FSM Social Protection programming, as well as augmented by an additional $2,500,000 from the 22nd FSM Congress. The program is intended to provide temporary cash relief for households outside of the formal labor sector, such as subsistence farmers and fishers, and specifically such laborers who otherwise were unqualified for the aforementioned PUA and FPUC programming.
As of January 2022, the FSM has received a total of 17,142 applications from eligible households and paid out $7,896,000 to 7,896 of them.
From the perspective of the individual states, for the State of Yap, the Government has received a total of 2,174 applications from eligible households, and paid out $747,000 to 747 of them.
For the State of Chuuk, the Government has received a total of 7,200 applications from eligible households and paid out $4,358,000 to 4,358 of them.
For the State of Pohnpei, the Government has received 6,686 applications from eligible households, and paid out $2,483,000 to 2,483 of them.
For the State of Kosrae, the Government has received 1,082 applications from eligible households, and paid out $308,000 to 308 of them.
After the discussion on the various programs, representatives of the private sector described their concerns on how the COVID-19 Pandemic has affected their families and businesses. It was described that businesses with expensive equipment (e.g. diving equipment, which need to be tested and maintained, and is difficult to do without appropriate parts or personnel) would greatly appreciate and benefit from additional support, as—for example—failing to properly test or maintain or upgrade diving equipment, which can require specialized personnel, becomes both a financial sink as well as a safety hazard. It was further described that businesses would find it productive for the Government to consider how it can extend no-interest loan periods presently set
at six months to one full year.
The 2nd Resources & Development Conference will continue until the end of January 28th, 2022. It is the intention of the FSM National Government to continue daily releases on the Conference until its conclusion. Stakeholders interested in the most-detailed reporting after the Conference will wish to be aware that the Department will develop such a report in early February, releasable as a public document.
