FSM Information Services
February 15, 2013
National Government Supports Scaled Back Chinese Investment In Yap
Early this month, after a series of consultative meetings with Yap state leaderships, traditional leaders, the private sector and NGO’s regarding the Chinese ETG investment proposal, President Manny Mori shared with Gov. Sebastian Anefal and the Yap State Legislature a document on what transpired at those meetings with recommendations.
ETG stands for Exhibit and Travel Group, a Chinese business with overseas investments and operations.
Mori indicated to both Anefal and the Yap lawmakers that moving forward with the scaled-back ETG investment would be in the best interest of Yap and the Federated States of Micronesia. However, he stressed that the decision to allow ETG to proceed rests with Yap.
Mori decided to take on the consultative meetings in mid-January in hope that conclusive leadership decisions can be achieved soon enough. He said in his meeting report, "because of the current impasse and the lack of a clear understanding of the role that the national government has in terms of foreign direct investments, I though it is incumbent on me, as president, to address the issues directly with the concerned parties and see how I can bring their divergent views together towards a more accommodating and acceptable alternative."
In the same report, Mori stated that the initial ETG investment interest in Yap was to include the construction of 10,000-room hotel facilities, golf courses, casinos, a convention center and other "entertainment support facilities."
"I must say that I also have concern about the initial scale of the project," Mori said, adding that the investment plan has been dramatically reduced so that no golf course and casino will be included and that only 1,500 hotel rooms will be constructed. He went on to say that further demands for scaling back and restrictions on the investment may not be financially viable for ETG, risking cancellation of interest altogether by the Chinese investors.
In terms of economic benefits, Mori envisioned increase in tax revenue from various ETG-related infrastructure constructions and creation of new services and jobs. It is anticipated that tax revenues to Yap resulting from the ETG investments will be even greater if the proposed Value Added Tax scheme is implemented.
Mori spoke of the lack of information and the unanswered worries by the general public as complicating situations. He encouraged the leadership and ETG to engage the people as far as providing details and transparent information to cast away misunderstanding and create openness. He also spoke against providing wrong information as doing so will only provoke ill feeling toward investment and development in general.
Other issues that were commented on by Mori in his meeting report touched upon some impacts and their possible remedies in areas having to do with land issues, environmental protection and cultural way of life.
"This ETG tourism investment proposal may be one of the answers to our desire to bring about meaningful development to our islands. We may not see another opportunity like this ETG proposal in our lifetime especially if there are no legitimate reasons to reject the investment proposal at the scaled-back level," Mori said.
Go back to Pacific Islands Report