Government of the Federated States of Micronesia

FSM Hosts 2012 Midyear JEMCO Meeting

Palikir, Pohnpei (FSM Information Services): April 9, 2012 - The Joint Economic and Management Committee (JEMCO) met on March 23, 2012 in Kolonia, Pohnpei for its 2012 Midyear Meeting. The outcome of the Midyear Meeting includes a series of seven resolutions, six of which were unanimously approved. Items discussed as part of the agenda ranged in scope from among the seven various Compact Sectors, including requirements for the independent verification of performance indicators and an update of the FSM's Infrastructure Development Plan. State-specific JEMCO directives consisted of the continuation of modified responsibilities for the Compact Fund Control Commission based in Chuuk, a plan for the implementation of the Kosrae Hospital Project and a new emergency stand-by generator for the Pohnpei State Hospital.

During his opening remarks, Vice Chairman Lorin S. Robert welcomed the US Delegation to Pohnpei and presented the opportunity to experience a first-hand account of not only the challenges that the FSM wrestles with everyday, but also the visible progress on the ground. Vice Chairman Robert made mention of the original purpose of the midyear meeting, to share views and to guide and assist ongoing Compact grant management. He also noted that many of the issues to be discussed require more collaboration between the FSM and US, indicating that the JEMCO process encourages this exchange, particularly at the technical level prior to the Annual Meeting in August.

The first item on the agenda, the Long Term Fiscal and Economic Framework, was a topic not unfamiliar to JEMCO. The LTFEF was first called for in a 2010 JEMCO resolution and prior to that, as a more specific request for a Decrement Management Plan in 2009, to address the annual decrease of $800,000 each year in Compact financial assistance. The US delegation to this year's Midyear JEMCO noted that "although the FSM developed and submitted a draft LTFEF in March 2011, the planning document did not address the FSM's ability to choose among competing priorities, nor did it address program effectiveness." Taking the issue a step further at this Midyear Meeting, the US introduced a resolution that would effectively and unilaterally adjust the FSM's allocation formula of Compact funds, which is currently set by internal statute. After much discussion, the issue was tabled and Chairman Nikolao Pula later issued a statement to rationalize the intent behind the US proposed resolution. He noted that the US preference is that "the Government of the FSM, through its Long Term Planning and Economic Framework, makes the fiscal and program adjustments that will make one-sided JEMCO action unnecessary."

Of the two issues that the FSM brought to the JEMCO table, one was outvoted and the other was tabled. As a directive from the State and National Leadership during its most recent meeting held in Palikir last February, the FSM JEMCO members were tasked with requesting JEMCO to delay the previously approved resolution that would cut a total of $2.8 million of Compact-funded assistance to the College of Micronesia. The second FSM proposed resolution was in regards to the $1 million cap on Compact-funded Scholarships. While the US JEMCO members generally acknowledged and commended the FSM's presentations on the two issues, the main concern cited was the discouraging data at the primary and secondary education levels and the indication that in light of the decrement, more funding should be applied where these direct services are being provided.

A recurring theme throughout the meeting was on the issue of timing. Staff from OIA and SBOC, as the collaborative JEMCO Secretariat, have already begun discussions on ways to improve, including necessary consultations on a timeline of key events and deadlines leading up to the next JEMCO Annual Meeting, slated for August 2012.

For a copy of the Midyear JEMCO Outcome document, please visit www.sboc.fm or for further information, please contact the Division of Compact Management at the Office of Statistics, Budget and Economic Management, Overseas Development Assistance & Compact Management (SBOC) at (691) 320-6260 or email slowe@sboc.fm.