“The purpose of this review,” explained Nimea, “is to assess what has and has not worked, and what is needed now, and in 15 years to come, to meet the overarching goals of the amended Compact. It is to identify what mid-course adjustments can be made that will bring us onto the best path towards those goals.”
The Compact review focuses on four status indicators: FSM’s general social, political and economic conditions; the use and effectiveness of U.S. financial, program and technical assistance in FSM; FSM’s economic policy reforms; and FSM’s efforts to increase investments in the country, be it private investment or Compact and non-Compact Trust Funds investment.
To date, the Compact Review Committee has produced a first draft of the FSM Compact Review Report and traveled to Washington, D.C. recently to discuss Compact matters with Anthony Babauta, assistant secretary of the U.S. Department of the Interior, Nikolao Pula, director of the U.S. Office of Insular Affairs, and other key officials of the U.S. government.
The U.S. Compact Review team is led by Tom Bussanich, director of OIA’s Division of Budget and Grant Management, and assisted by Wali Osman, OIA economist, and other staff from the OIA Honolulu field office.
The U.S. Review Report, as mandated by U.S. P.L. 108-188 Section 104 (h), is to be submitted to the U.S. Congress no later than the end of the calendar year following the first five years of the amended Compact.
That report must include the FSM government’s comments.
Nimea said based on the CRC’s findings, to promote FSM’s efforts for economic advancement and budgetary self-reliance, the country needs to focus on the following: the development in the areas of human resource, economic infrastructure and private sector; the institution of internal policy reforms to impose a new direction for the economy; improve funding of the Compact Trust Fund and fully adjust inflation to increase the purchasing power of each dollar of Compact grant funds received.
Regarding the overall FSM economy and private sector development, Samuel Brazys, a senior economist with the statistics office, noted that the FSM GDP has been more or less stagnant for the past 15 years.
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