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Pacific Islands Development Program, East-West Center

With Support From Center for Pacific Islands Studies, University of Hawai‘i


News Release

Pacific Islands Forum Secretariat
Suva, Fiji

Tuesday, December 04, 2012

Forum Review Team Recognizes Unique Challenges In FSM

The Federated States of Micronesia (FSM) Forum Compact Peer Review Team acknowledges the unique challenges facing FSM compared to other countries in the region and this will be taken into consideration in its recommendations to the government and development partners.

The peer review conducted under the Cairns Compact on Strengthening Development Coordination (Forum Compact) was in the FSM from 16 – 28 November. The team met with the leadership of both the national and state governments and also representatives of national and state agencies, non-government organizations, the private sector and development partners.

The FSM Peer Review Team consisted of Mr. Catalino Kijiner from the Government of the Republic of the Marshall Islands, Ms. Noumea Simi representing the Government of Samoa, Mr. Johnson Naviti of the Vanuatu Government and Mr. Asif Chida from the UNDP Pacific Centre in Fiji.

The FSM peer review continued the series of peer reviews across the Pacific as part of the Cairns Compact on Strengthening Development Coordination (Forum Compact) to review FIC’s national development planning, budgeting, public financial and aid management processes and systems. FSM was the 9th Forum Island Country to undertake this process.

FSM also specifically requested that in recognition of the pressing challenges facing the country, the Peer Review Team were to also consider the suitability of the existing policy environment for promoting private sector development.

"We have found a lot of challenges in FSM given its context but we were warmed by the fact that the people we met were receptive, as reflected in the numbers that attended the consultations. There was willingness by the people we met to consider other options that could be made available to them," said Ms. Noumea Simi, who had previously been involved in the peer review of two other countries.

Ms. Simi added: "Definitely for FSM the peer review process has been a necessity. I think in the context of FSM the peer review process has been timely and I am certain that lots of lessons have been learnt that will enable them to move forward with the recommendations that our team will propose to the government."

Mr. Catalino Kijina, from the Republic of the Marshall Islands, who was part of the peer review process for the first time, described it as a learning experience for him.

"The whole process has been a learning experience for me as much I’d like to think that I have contributed something to the process in the FSM. We have the same challenges in RMI as they have in FSM as both countries have the Compact of Free Association with the United States," said Mr. Kijiner.

But he pointed out that "the budget process in FSM is very complex in the sense there are five governments involved in the whole process. But I think it can be improved and streamlined so that decision makers are provided enough information and time, and flexibility to really review the budget for effectiveness and efficiency."

Another first timer to the peer review process, Mr. Asif Chida, a private sector specialist with the UNDP Pacific Centre in Suva, Fiji, described the process as interesting and valuable as it gave the members of the team the opportunity to learn and share experiences.

With his experience in dealing with the private sector in the Pacific region, Mr. Chida said, "FSM has this unique opportunity being in a geographical location where it has access to Asian and American markets. However, FSM also has unique challenges of high cost of doing business particularly with transportation and communication. FSM is cognizant of these challenges and needs to address them at the earliest in order to capitalize on the potential opportunities."

"We found significant gaps exist in the flow of information between state governments and the national governments on investment opportunities in the country. In other Pacific countries this is addressed through the establishment of an investment promotion agency (IPA). FSM may need a dedicated IPA or investment promotion desk which can be at the national and state government level. FSM also has a significant opportunity in branding itself as a niche product destination including the development of organic farming for markets in Japan, Korea and even the United States," said Mr. Chida.

He also proposes that a private sector specialist or a representative of a private sector organization like Chamber of Commerce be included as a member of the peer review as most if not all of the countries in the region have economic growth among their priorities and the private sector is the engine of growth.

The representative of the Vanuatu Government on the FSM Forum Compact Peer Review Team, Johnson Naviti, who was participating in his third peer review, said his participation in the peer review process is a manifestation of his Government’s commitment to regionalism and the Cairns Compact on Strengthening Development Coordination.

"We were very fortunate in Vanuatu as we had the reform program in 1997. The Forum Compact peer review which was held in Vanuatu last year enabled us to take stock of what we have done since that time. From the peer review we were able to know what we have achieved and areas that needed improvement. The fact that we have in place a development plan enables us to get development partners to compliment the government’s efforts in achieving its programs and priorities. We are in a position to tell the development partners our priorities and these are the areas we need their help."

Mr. Naviti said "if there’s any lessons for FSM, its more having a strong strategic plan and having a single budget for the recurrent and development budgets to determine the government’s priorities before going to the development partners for their assistance."

The FSM Forum Compact Peer Review team is expected to present a draft report and recommendations to the FSM Government three weeks after the conclusion of the consultations. The draft report and recommendations will be discussed with the government and will be released after it has been endorsed by the government of FSM.


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