This document summarizes a study investigating how declining revenue from the Southern African Customs Union (SACU) is affecting health expenditures, particularly for HIV/AIDS, in Botswana, Lesotho, Namibia, and Swaziland (BLNS countries). It provides historical background on SACU, outlines declining revenues from the common revenue pool that the BLNS countries rely on, and examines the implications of this decline for fiscal expenditures and public health programs in the BLNS countries. The study analyzes revenue trends and examines the impact on government funding for HIV/AIDS programs.
The document provides an update on Alaska's tax credits and revenue projections from the Department of Revenue. It summarizes that the outlook is uncertain due to COVID-19 and volatility in oil prices and the economy. It also discusses the potential impacts of Ballot Measure 1, which would increase oil taxes but decrease producer profits and investments. The measure could more than double tax revenues from the North Slope at current oil prices according to estimates, but also increase uncertainty for producers. Contact information is provided for the Commissioner of Revenue and Chief Economist for any additional questions.
The National Finance Commission distributes tax revenue collected by the federal government among Pakistan's provinces every five years. The most recent NFC Award saw vertical revenue distribution of 80% to provinces and 20% to the federal government. Horizontally, Punjab received the largest share at 57.9% while Sindh, NWFP, and Balochistan received lower shares. Critics argue population alone should not determine distribution and other factors like infrastructure and poverty levels should also be considered to ensure a more equitable division of resources.
Presentation by Sarah Puro, Principal Analyst in CBO’s Budget Analysis Division, at the Annual Conference of the National Federation of Municipal Analysts.
The Fixing America’s Surface Transportation Act, which was signed into law on December 4, 2015, provided $281 billion in contract authority for surface transportation programs through 2020. But projected spending from the Highway Trust Fund exceeds its revenues. Under current law, CBO estimates that the Highway Account of the Highway Trust Fund will be able to meet obligations through 2021 and the Transit Account through 2020.
Some proposals involve establishing a new entity to finance infrastructure investments. However, even if such an entity is not officially a federal agency, its activity might be considered part of the federal budget.
Macro Pakistani | Paklaunch | Growth Basics and Economic Policy Making in Pak...Faiz Ahmed
Pakistan is classified as a lower middle income country with lower real growth than its peers. It follows 10 year consumption based growth cycles, with periods of low growth as the economy slows down. Investment and savings levels are not high enough, relying too much on foreign inflows. Productivity has remained largely unchanged across sectors, and most new jobs will be low-wage and low-skilled. To improve growth, policy focus should be on increasing investment, human development, and addressing constraints like limited access to financing for the private sector.
The NFC Award determines the annual distribution of financial resources from the federal government to Pakistan's provinces. Taxes are pooled and then redistributed according to the NFC formula, which is debated. The 1997 award specified a 63% federal/37% provincial split but included custom duties previously claimed entirely by the federal government. A new award has not been reached due to disagreement over whether to base distribution solely on population or consider other factors like revenue generation and poverty levels.
Federal Budget FY21: A Barrier Eclipsing ReliefSCPL Capital
FY21 : Key Budgetary Targets
GDP is expected to grow 2.2% vs. -0.4% in FY20e
Inflation to clock in at 6.5% as compared to 10.9% in FY20e
PSDP allocation of 1.3trn (up 13% YoY)
Tax revenue targeted at PKR4.7trn (up ~1trn YoY)
Fiscal Deficit to stand at 7% vs. 9.1% in FY21
I’m a young Pakistani Blogger, Academic Writer, Freelancer, Quaidian & MPhil Scholar, Quote Lover, Co-Founder at Essar Student Fund & Blueprism Academia, belonging from Mehdiabad, Skardu, Gilgit Baltistan, Pakistan.
I am an academic writer & freelancer! I can work on Research Paper, Thesis Writing, Academic Research, Research Project, Proposals, Assignments, Business Plans, and Case study research.
Expertise:
Management Sciences, Business Management, Marketing, HRM, Banking, Business Marketing, Corporate Finance, International Business Management
For Order Online:
Whatsapp: +923452502478
Portfolio Link: https://blueprismacademia.wordpress.com/
Email: arguni.hasnain@gmail.com
Follow Me:
Linkedin: arguni_hasnain
Instagram : arguni.hasnain
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This document summarizes a study investigating how declining revenue from the Southern African Customs Union (SACU) is affecting health expenditures, particularly for HIV/AIDS, in Botswana, Lesotho, Namibia, and Swaziland (BLNS countries). It provides historical background on SACU, outlines declining revenues from the common revenue pool that the BLNS countries rely on, and examines the implications of this decline for fiscal expenditures and public health programs in the BLNS countries. The study analyzes revenue trends and examines the impact on government funding for HIV/AIDS programs.
The document provides an update on Alaska's tax credits and revenue projections from the Department of Revenue. It summarizes that the outlook is uncertain due to COVID-19 and volatility in oil prices and the economy. It also discusses the potential impacts of Ballot Measure 1, which would increase oil taxes but decrease producer profits and investments. The measure could more than double tax revenues from the North Slope at current oil prices according to estimates, but also increase uncertainty for producers. Contact information is provided for the Commissioner of Revenue and Chief Economist for any additional questions.
The National Finance Commission distributes tax revenue collected by the federal government among Pakistan's provinces every five years. The most recent NFC Award saw vertical revenue distribution of 80% to provinces and 20% to the federal government. Horizontally, Punjab received the largest share at 57.9% while Sindh, NWFP, and Balochistan received lower shares. Critics argue population alone should not determine distribution and other factors like infrastructure and poverty levels should also be considered to ensure a more equitable division of resources.
Presentation by Sarah Puro, Principal Analyst in CBO’s Budget Analysis Division, at the Annual Conference of the National Federation of Municipal Analysts.
The Fixing America’s Surface Transportation Act, which was signed into law on December 4, 2015, provided $281 billion in contract authority for surface transportation programs through 2020. But projected spending from the Highway Trust Fund exceeds its revenues. Under current law, CBO estimates that the Highway Account of the Highway Trust Fund will be able to meet obligations through 2021 and the Transit Account through 2020.
Some proposals involve establishing a new entity to finance infrastructure investments. However, even if such an entity is not officially a federal agency, its activity might be considered part of the federal budget.
Macro Pakistani | Paklaunch | Growth Basics and Economic Policy Making in Pak...Faiz Ahmed
Pakistan is classified as a lower middle income country with lower real growth than its peers. It follows 10 year consumption based growth cycles, with periods of low growth as the economy slows down. Investment and savings levels are not high enough, relying too much on foreign inflows. Productivity has remained largely unchanged across sectors, and most new jobs will be low-wage and low-skilled. To improve growth, policy focus should be on increasing investment, human development, and addressing constraints like limited access to financing for the private sector.
The NFC Award determines the annual distribution of financial resources from the federal government to Pakistan's provinces. Taxes are pooled and then redistributed according to the NFC formula, which is debated. The 1997 award specified a 63% federal/37% provincial split but included custom duties previously claimed entirely by the federal government. A new award has not been reached due to disagreement over whether to base distribution solely on population or consider other factors like revenue generation and poverty levels.
Federal Budget FY21: A Barrier Eclipsing ReliefSCPL Capital
FY21 : Key Budgetary Targets
GDP is expected to grow 2.2% vs. -0.4% in FY20e
Inflation to clock in at 6.5% as compared to 10.9% in FY20e
PSDP allocation of 1.3trn (up 13% YoY)
Tax revenue targeted at PKR4.7trn (up ~1trn YoY)
Fiscal Deficit to stand at 7% vs. 9.1% in FY21
I’m a young Pakistani Blogger, Academic Writer, Freelancer, Quaidian & MPhil Scholar, Quote Lover, Co-Founder at Essar Student Fund & Blueprism Academia, belonging from Mehdiabad, Skardu, Gilgit Baltistan, Pakistan.
I am an academic writer & freelancer! I can work on Research Paper, Thesis Writing, Academic Research, Research Project, Proposals, Assignments, Business Plans, and Case study research.
Expertise:
Management Sciences, Business Management, Marketing, HRM, Banking, Business Marketing, Corporate Finance, International Business Management
For Order Online:
Whatsapp: +923452502478
Portfolio Link: https://blueprismacademia.wordpress.com/
Email: arguni.hasnain@gmail.com
Follow Me:
Linkedin: arguni_hasnain
Instagram : arguni.hasnain
Facebook: arguni.hasnain
The document discusses Pakistan's National Finance Commission (NFC), which constitutionally reviews the formula for distributing funds between the federal and provincial governments every five years. It outlines the NFC's composition and functions, describes some of the funding formulas and allocations from previous NFC awards in 1970, 1979, 1991, and 1997, and discusses factors considered in the 2009 NFC award such as population, development levels, and security issues. The 2009 award aimed to more equitably resolve disputes around fund distribution that had persisted since Pakistan's independence.
Representative Jim Himes has been accused of hypocrisy by his opponent regarding legislation and funding. Himes supported a bill that was largely written by Citigroup lobbyists despite receiving significant campaign donations from Citigroup. He also voted against a bill that would have required economic impact analyses of proposed legislation, which could have exposed flaws in bills he supported. Additionally, Himes talks about accountability and responsible government but voted in ways that benefited his largest donors over his constituents. His opponent argues these actions are examples of Himes acting irresponsibly and in a corrupt manner.
Puerto Rico: Is there a way out with growth and dignity?cealr
The document proposes an alternative fiscal plan for Puerto Rico that focuses on achieving sustainable economic growth through orderly fiscal adjustment and structural reforms. It summarizes the key weaknesses of Puerto Rico's current fiscal plan, including overly pessimistic growth assumptions and an uncertain implementation outlook. The alternative plan aims to achieve a central government surplus by 2018 through restructuring public enterprises, implementing public-private partnerships, and negotiating federal support for healthcare programs. A debt sustainability analysis projects that government debt would decline to 51% of GDP by 2025 under the alternative plan.
The document discusses Puerto Rico's fiscal and economic crisis. It notes that Puerto Rico has faced virtually continuous economic decline since 2006, with negative GNP growth in nearly every year since 2007. This economic decline has led to stagnating incomes, increased inflation, and significant outmigration from Puerto Rico to the mainland. The Commonwealth has implemented various austerity measures to strengthen its finances, including tax increases and spending cuts, but it still expects to have insufficient liquidity to make upcoming debt service payments without continuing extraordinary measures. The Working Group's Fiscal and Economic Growth Plan estimates financing gaps and shows that significant revenue increases, expense reductions, structural reforms, and debt restructuring will be needed to put Puerto Rico on a sustainable path.
The following item is a Letter of Intent of the government of Haiti, which describes the policies that Haiti intends to implement in the context of its request for financial support from the IMF. The document, which is the property of Haiti, is being made available on the IMF website by agreement with the member as a service to users of the IMF website.
The document summarizes a national conference on NFC reforms organized by PRIME Institute in collaboration with the National Endowment for Democracy. Over 150 participants from government, academia, civil society and media attended. Panelists discussed issues around fiscal federalism and the 7th NFC award. Key points of discussion included the central government's demand for a 7% share of the divisible pool being rejected by provinces, the need to increase tax revenues and cut wasteful spending, and mixed impacts of the 7th NFC award on social sectors and poverty reduction. Participants debated governance challenges, revenue collection efforts of provinces, creative accounting, and the need for independent fiscal oversight.
The SACU revenue that BLNS countries receive is declining substantially, putting pressure on government budgets and expenditures. By 2020, SACU revenues are projected to drop to 4.4% of GDP for Namibia and 2.8% for Botswana. Given the heavy reliance on SACU funds, particularly for health and HIV programs, this decline threatens to reduce funding for critical areas. In both the short and long run, policy options proposed include lobbying for increased donor aid, fiscal restraint, allowing higher deficits, restructuring budgets to rely less on volatile SACU revenues and improving domestic revenue collection.
To show how transportation funding is handled in CBO's cost estimates, this slide deck provides a guide to the agency's 2012 estimate of the Moving Ahead for Progress in the 21st Century Act.
Open Government Directive - Spending Transparency 04062010dslunceford
The document provides guidance on improving the transparency of federal spending data. It establishes an October 1, 2010 deadline for agencies to begin sub-award reporting and to improve the quality, completeness and accuracy of spending data on the USAspending.gov website. Agencies will be required to monitor and report on metrics to measure progress in improving data quality over time, with a goal of 100% complete, accurate and timely data by the end of FY2011. OMB will issue additional guidance to help agencies implement sub-award reporting and will work with them to enhance transparency of federal spending information.
The document discusses Pakistan's currency devaluation and relationship with the IMF. It summarizes that Pakistan frequently borrows from the IMF, which requires meeting economic targets. Recent IMF meetings expressed concerns that Pakistan's currency is overvalued, and debt from China's CPEC projects could strain Pakistan's ability to repay IMF loans. The IMF is calling for currency devaluation and economic reforms, though devaluation often increases inflation and debt in Pakistan without boosting exports.
This is a very risky preposition. The forecast should be revisited annually rather than assuming no economic downturn through 2019.
Fiscal Pressures. Given the relatively small budget shortfalls projected by IBO for 2017-2019 and the sizable reserves contained in the Mayor’s financial plan—including general reserves of $1 billion annually and $2.6 billion in the Retiree Health Benefits Trust—the city’s fiscal outlook remains solid. But this outlook presumes no economic downturn through 2019. If that forecast holds the city will have gone an unprecedented 10 years without a recession.
Reserve Bank of India (RBI) is the debt manager for 29 State Governments and the Union Territory of Puducherry as also the banker to the State Governments except Government of Sikkim.
This is in terms of their agreement with RBI under Section 21 A of the Reserve Bank of India Act 1934.
RBI makes advances to State Governments to tide over mismatches in the cash flows of their receipts and payments. Such advances are termed as Ways and Means Advances (WMA).
WMA : Repayable in each case not later than
three months from the date of the making of the advance.
Governed by Section 17 (5) of the RBI Act.
The Reserve Bank has been extending such advances to State Governments since 1937.
Under this provision, the maximum amount of WMA by the Reserve Bank and the interest charged thereon are regulated by agreements with the State Governments
Based on he recommendations of various committees Groups constituted.
RBI, a unique central bank, has agreements with the sub-national Governments to act as banker.
The revised WMA quantum works out to `32,225 crore for all the States.
Once WMA limits are prescribed, States have the full freedom to access it and it becomes an autonomous component of liquidity over which the central bank has least control.
This document summarizes key points from the Indian government's budget for fiscal year 2011-2012. It highlights that the fiscal deficit target was kept at 4.6% of GDP. Major allocations included Rs. 300 crore per agriculture scheme, Rs. 38,484 crore for education (a 24% increase), and Rs. 214,000 crore for infrastructure development. Tax proposals included increasing the income tax exemption limit and rates of corporate and dividend taxes. The budget aimed to boost sectors like agriculture, education, infrastructure and support common needs.
Use of analytics is accelerating, and that means more data-driven decision making and fewer hunches. Evidence-based management complements analytics by adding validated cause-and-effect relationships between policies and effects.
- Paul Gibbons
To sum up: it is wrong always, everywhere, and for anyone, to believe anything upon insufficient evidence.
- William Kingdon Clifford
Brunei is heavily reliant on oil and natural gas revenues, but these resources will be depleted within 30 years. To diversify its economy, Brunei is pursuing plans to become a financial hub and develop other industries. This includes attracting foreign direct investment, strengthening financial reserves and infrastructure, improving human capital, establishing an independent regulatory authority, and positioning itself as an Islamic finance hub for energy-related financial services.
This document summarizes the annual report of United Bank Limited for the year ending December 31, 2013. Key highlights include:
- Profit after tax increased 4% to Rs. 18.6 billion, with earnings per share of Rs. 15.21.
- Net interest income declined slightly to Rs. 37.9 billion despite asset growth of 13.4%, as interest rates declined sharply.
- Non-interest income grew to Rs. 18.1 billion, with strong growth in fees, commissions, capital gains and foreign exchange income.
- Loan loss provisions declined significantly to Rs. 1.4 billion, while non-performing loans fell 8%.
Running head EXERCISE 4-15 CAFR OKLAHOMA1EXERCISE 4-15 CAFR.docxcowinhelen
Running head: EXERCISE 4-15 CAFR OKLAHOMA 1
EXERCISE 4-15 CAFR 7
Exercise 4-15
Kerry Bolander
Dec. 9th, 2016
Oklahoma State
Governmental Activities
Governmental activities increased the state's net position by $1.3 billion. Tax revenues were down in four of the five major types. Total revenues for governmental activities were down by $449.5 million, or 2.3%, in 2015. The state showed a $147.9 million increase in individual income taxes, a $45.0 million decrease in sales taxes, a $51.0 million decrease in corporate income taxes, a $93.5 million decrease in Federal Grant revenue, and a $79.0 million decrease in gross production taxes during 2015 (Adams, Potter, Singh, & York, 2016).
These activities are normally recorded and reported in different column when it comes to the financial statements which may be in terms of General commitment bonds, directed by the state treasurer, are approved and issued principally to give assets to state-possessed capital upgrades, including office structures for state agencies. The state has promised 100% of cigarette expenses gathered under these bond issues. General commitment bonds are supported by the full confidence and credit of the state, including the state's energy to impose extra expenses to guarantee reimbursement of the bonds.
Asset and liability in the Oklahoma Department of Transportation (ODOT) has issued several arrangements of Grant Anticipation Notes with the end goal of financing certain qualified government help transportation extends in the state. The notes are secured by government income got from the Federal Highway Administration (FHWA) and have a last development in 2019. Add up to income got from the FHWA in monetary year 2015 was $622,566,000with a bit of that sum, $51,079,000, held as security for the notes. Current year note commitments for vital and intrigue totalled $18,605,000. ODOT likewise reported defeased notes payable, exceptional at June 30, 2015, totalling $114,387,000 for foremost, intrigue and trustee charges (Souder, 2016).
In information on government expenses can be in state of capital leases where the state has gone into understandings to rent hardware. Such understandings are, in substance, buys (capital rents) and are accounted for as capital rent commitments. Capital rent commitments are accounted for those leases where the equitable estimation of the rented resource at beginning of the rent is $25,000 or more.
General fund
When it comes to general fund a number of statements and schedules come up in different ways and means. The differences between the original budget and the final amended budget amounted to $102.0 million with $53.6 million (52.5%) coming from budget carryovers from fiscal year 2014, and the remaining $48.4 million (47.5%) was attributable to supplemental appropriations. The difference between the final budget and the actual collections amounted to $192.5 million less than the budget. Based on a review by the budget departme ...
The document is the FY2016 Executive Budget submitted by Governor Eddie Baza Calvo and Lieutenant Governor Ray Tenorio to the 33rd Guam Legislature. It provides an overview of the budget process, revenue sources and expenditures for the Government of Guam's General Fund and other funds for Fiscal Year 2016. It summarizes projected revenues from major sources like income taxes, business privilege taxes, and federal sources for the General Fund totaling $851.7 million. It also outlines expenditures from the General Fund and other special revenue funds, federal grants, and semi-autonomous/autonomous agency operating funds totaling $2.2 billion.
The document discusses Pakistan's National Finance Commission (NFC), which constitutionally reviews the formula for distributing funds between the federal and provincial governments every five years. It outlines the NFC's composition and functions, describes some of the funding formulas and allocations from previous NFC awards in 1970, 1979, 1991, and 1997, and discusses factors considered in the 2009 NFC award such as population, development levels, and security issues. The 2009 award aimed to more equitably resolve disputes around fund distribution that had persisted since Pakistan's independence.
Representative Jim Himes has been accused of hypocrisy by his opponent regarding legislation and funding. Himes supported a bill that was largely written by Citigroup lobbyists despite receiving significant campaign donations from Citigroup. He also voted against a bill that would have required economic impact analyses of proposed legislation, which could have exposed flaws in bills he supported. Additionally, Himes talks about accountability and responsible government but voted in ways that benefited his largest donors over his constituents. His opponent argues these actions are examples of Himes acting irresponsibly and in a corrupt manner.
Puerto Rico: Is there a way out with growth and dignity?cealr
The document proposes an alternative fiscal plan for Puerto Rico that focuses on achieving sustainable economic growth through orderly fiscal adjustment and structural reforms. It summarizes the key weaknesses of Puerto Rico's current fiscal plan, including overly pessimistic growth assumptions and an uncertain implementation outlook. The alternative plan aims to achieve a central government surplus by 2018 through restructuring public enterprises, implementing public-private partnerships, and negotiating federal support for healthcare programs. A debt sustainability analysis projects that government debt would decline to 51% of GDP by 2025 under the alternative plan.
The document discusses Puerto Rico's fiscal and economic crisis. It notes that Puerto Rico has faced virtually continuous economic decline since 2006, with negative GNP growth in nearly every year since 2007. This economic decline has led to stagnating incomes, increased inflation, and significant outmigration from Puerto Rico to the mainland. The Commonwealth has implemented various austerity measures to strengthen its finances, including tax increases and spending cuts, but it still expects to have insufficient liquidity to make upcoming debt service payments without continuing extraordinary measures. The Working Group's Fiscal and Economic Growth Plan estimates financing gaps and shows that significant revenue increases, expense reductions, structural reforms, and debt restructuring will be needed to put Puerto Rico on a sustainable path.
The following item is a Letter of Intent of the government of Haiti, which describes the policies that Haiti intends to implement in the context of its request for financial support from the IMF. The document, which is the property of Haiti, is being made available on the IMF website by agreement with the member as a service to users of the IMF website.
The document summarizes a national conference on NFC reforms organized by PRIME Institute in collaboration with the National Endowment for Democracy. Over 150 participants from government, academia, civil society and media attended. Panelists discussed issues around fiscal federalism and the 7th NFC award. Key points of discussion included the central government's demand for a 7% share of the divisible pool being rejected by provinces, the need to increase tax revenues and cut wasteful spending, and mixed impacts of the 7th NFC award on social sectors and poverty reduction. Participants debated governance challenges, revenue collection efforts of provinces, creative accounting, and the need for independent fiscal oversight.
The SACU revenue that BLNS countries receive is declining substantially, putting pressure on government budgets and expenditures. By 2020, SACU revenues are projected to drop to 4.4% of GDP for Namibia and 2.8% for Botswana. Given the heavy reliance on SACU funds, particularly for health and HIV programs, this decline threatens to reduce funding for critical areas. In both the short and long run, policy options proposed include lobbying for increased donor aid, fiscal restraint, allowing higher deficits, restructuring budgets to rely less on volatile SACU revenues and improving domestic revenue collection.
To show how transportation funding is handled in CBO's cost estimates, this slide deck provides a guide to the agency's 2012 estimate of the Moving Ahead for Progress in the 21st Century Act.
Open Government Directive - Spending Transparency 04062010dslunceford
The document provides guidance on improving the transparency of federal spending data. It establishes an October 1, 2010 deadline for agencies to begin sub-award reporting and to improve the quality, completeness and accuracy of spending data on the USAspending.gov website. Agencies will be required to monitor and report on metrics to measure progress in improving data quality over time, with a goal of 100% complete, accurate and timely data by the end of FY2011. OMB will issue additional guidance to help agencies implement sub-award reporting and will work with them to enhance transparency of federal spending information.
The document discusses Pakistan's currency devaluation and relationship with the IMF. It summarizes that Pakistan frequently borrows from the IMF, which requires meeting economic targets. Recent IMF meetings expressed concerns that Pakistan's currency is overvalued, and debt from China's CPEC projects could strain Pakistan's ability to repay IMF loans. The IMF is calling for currency devaluation and economic reforms, though devaluation often increases inflation and debt in Pakistan without boosting exports.
This is a very risky preposition. The forecast should be revisited annually rather than assuming no economic downturn through 2019.
Fiscal Pressures. Given the relatively small budget shortfalls projected by IBO for 2017-2019 and the sizable reserves contained in the Mayor’s financial plan—including general reserves of $1 billion annually and $2.6 billion in the Retiree Health Benefits Trust—the city’s fiscal outlook remains solid. But this outlook presumes no economic downturn through 2019. If that forecast holds the city will have gone an unprecedented 10 years without a recession.
Reserve Bank of India (RBI) is the debt manager for 29 State Governments and the Union Territory of Puducherry as also the banker to the State Governments except Government of Sikkim.
This is in terms of their agreement with RBI under Section 21 A of the Reserve Bank of India Act 1934.
RBI makes advances to State Governments to tide over mismatches in the cash flows of their receipts and payments. Such advances are termed as Ways and Means Advances (WMA).
WMA : Repayable in each case not later than
three months from the date of the making of the advance.
Governed by Section 17 (5) of the RBI Act.
The Reserve Bank has been extending such advances to State Governments since 1937.
Under this provision, the maximum amount of WMA by the Reserve Bank and the interest charged thereon are regulated by agreements with the State Governments
Based on he recommendations of various committees Groups constituted.
RBI, a unique central bank, has agreements with the sub-national Governments to act as banker.
The revised WMA quantum works out to `32,225 crore for all the States.
Once WMA limits are prescribed, States have the full freedom to access it and it becomes an autonomous component of liquidity over which the central bank has least control.
This document summarizes key points from the Indian government's budget for fiscal year 2011-2012. It highlights that the fiscal deficit target was kept at 4.6% of GDP. Major allocations included Rs. 300 crore per agriculture scheme, Rs. 38,484 crore for education (a 24% increase), and Rs. 214,000 crore for infrastructure development. Tax proposals included increasing the income tax exemption limit and rates of corporate and dividend taxes. The budget aimed to boost sectors like agriculture, education, infrastructure and support common needs.
Use of analytics is accelerating, and that means more data-driven decision making and fewer hunches. Evidence-based management complements analytics by adding validated cause-and-effect relationships between policies and effects.
- Paul Gibbons
To sum up: it is wrong always, everywhere, and for anyone, to believe anything upon insufficient evidence.
- William Kingdon Clifford
Brunei is heavily reliant on oil and natural gas revenues, but these resources will be depleted within 30 years. To diversify its economy, Brunei is pursuing plans to become a financial hub and develop other industries. This includes attracting foreign direct investment, strengthening financial reserves and infrastructure, improving human capital, establishing an independent regulatory authority, and positioning itself as an Islamic finance hub for energy-related financial services.
This document summarizes the annual report of United Bank Limited for the year ending December 31, 2013. Key highlights include:
- Profit after tax increased 4% to Rs. 18.6 billion, with earnings per share of Rs. 15.21.
- Net interest income declined slightly to Rs. 37.9 billion despite asset growth of 13.4%, as interest rates declined sharply.
- Non-interest income grew to Rs. 18.1 billion, with strong growth in fees, commissions, capital gains and foreign exchange income.
- Loan loss provisions declined significantly to Rs. 1.4 billion, while non-performing loans fell 8%.
Running head EXERCISE 4-15 CAFR OKLAHOMA1EXERCISE 4-15 CAFR.docxcowinhelen
Running head: EXERCISE 4-15 CAFR OKLAHOMA 1
EXERCISE 4-15 CAFR 7
Exercise 4-15
Kerry Bolander
Dec. 9th, 2016
Oklahoma State
Governmental Activities
Governmental activities increased the state's net position by $1.3 billion. Tax revenues were down in four of the five major types. Total revenues for governmental activities were down by $449.5 million, or 2.3%, in 2015. The state showed a $147.9 million increase in individual income taxes, a $45.0 million decrease in sales taxes, a $51.0 million decrease in corporate income taxes, a $93.5 million decrease in Federal Grant revenue, and a $79.0 million decrease in gross production taxes during 2015 (Adams, Potter, Singh, & York, 2016).
These activities are normally recorded and reported in different column when it comes to the financial statements which may be in terms of General commitment bonds, directed by the state treasurer, are approved and issued principally to give assets to state-possessed capital upgrades, including office structures for state agencies. The state has promised 100% of cigarette expenses gathered under these bond issues. General commitment bonds are supported by the full confidence and credit of the state, including the state's energy to impose extra expenses to guarantee reimbursement of the bonds.
Asset and liability in the Oklahoma Department of Transportation (ODOT) has issued several arrangements of Grant Anticipation Notes with the end goal of financing certain qualified government help transportation extends in the state. The notes are secured by government income got from the Federal Highway Administration (FHWA) and have a last development in 2019. Add up to income got from the FHWA in monetary year 2015 was $622,566,000with a bit of that sum, $51,079,000, held as security for the notes. Current year note commitments for vital and intrigue totalled $18,605,000. ODOT likewise reported defeased notes payable, exceptional at June 30, 2015, totalling $114,387,000 for foremost, intrigue and trustee charges (Souder, 2016).
In information on government expenses can be in state of capital leases where the state has gone into understandings to rent hardware. Such understandings are, in substance, buys (capital rents) and are accounted for as capital rent commitments. Capital rent commitments are accounted for those leases where the equitable estimation of the rented resource at beginning of the rent is $25,000 or more.
General fund
When it comes to general fund a number of statements and schedules come up in different ways and means. The differences between the original budget and the final amended budget amounted to $102.0 million with $53.6 million (52.5%) coming from budget carryovers from fiscal year 2014, and the remaining $48.4 million (47.5%) was attributable to supplemental appropriations. The difference between the final budget and the actual collections amounted to $192.5 million less than the budget. Based on a review by the budget departme ...
The document is the FY2016 Executive Budget submitted by Governor Eddie Baza Calvo and Lieutenant Governor Ray Tenorio to the 33rd Guam Legislature. It provides an overview of the budget process, revenue sources and expenditures for the Government of Guam's General Fund and other funds for Fiscal Year 2016. It summarizes projected revenues from major sources like income taxes, business privilege taxes, and federal sources for the General Fund totaling $851.7 million. It also outlines expenditures from the General Fund and other special revenue funds, federal grants, and semi-autonomous/autonomous agency operating funds totaling $2.2 billion.
The Council on Revenues lowered its forecast for growth in Hawaii's fiscal year 2014 State General Fund tax revenues from 0.0% to -0.4% due to cumulative collections through April being lower than expected, partly due to processing delays. While remaining optimistic about future years due to construction projects, the Council expressed uncertainty about the current economy, citing factors like declining visitor spending and federal fiscal austerity. The Council maintained its forecasts for 2015-2020 but issued a revised table showing lower expected growth of -0.4% for 2014 and ranges from 5.5-6.2% for later years.
Fed's 2020 Quantitative Easing Debunked along with the controversial US$ 2.2 trillion relief bill, viewed as pork-barrel funding
CARES Act allows the Fed to:
1. meet in secrets with Wall Street incumbents,
2. provide liquidity of $484b (slush fund) thru SPVs making loans & loans guarantees,
3. never be audited (zero oversight),
4. not compliant to US Code requirements, Section 552b of Title 5
Public finance involves the collection and spending of government funds through taxes, expenditures, budget preparation, and borrowing. Money is essential for governments to fund activities like education, defense, health, and economic development. The annual budget process involves preparation, legislative approval, and auditing of expenses. Budgets estimate annual income and expenses and aim to encourage wise use of funds. Government revenue comes from taxes on income, property, imports, licenses, fines, fees, foreign loans, and bonds. Strict rules limit taxation to public purposes and require uniform and fair taxes.
MINUSTAH A FINANCIAL OVERVIEW OF PEACEKEEPING IN HAITIStanleylucas
The United Nations (U.N.) has a regular budget and a peacekeeping budget whose expenditure is divided bet- ween member States. Like any peacekeeping operation (PKO), MINUSTAH has a specific budget that the U.N. General Assembly, based on the Secretary General’s and an Advisory Committee’s reports, approves and controls each year. The budgetary cycle of peacekeeping opera- tions goes from July 1st to June 30th (12 months). In this respect, the sum of 576 619 000 US$ has been approved for MINUSTAH operations for the 2013-2014 fiscal year. With this amount, MINUSTAH currently represents the fifth largest budget of 14 peacekeeping operations throug- hout the world. The total funding of worldwide peacekee- ping operations amounts to 7.5 billion US$ in 2013- 2014.1
Puerto Rico has been in a recession for nearly a decade due to the expiration of corporate tax breaks in 2006. This has left the economy weak and Puerto Rico on the brink of insolvency, with debt totaling $72.3 billion or 70% of GDP. Puerto Rico is likely to default on general obligation bonds within two years according to Moody's. The government has implemented some fiscal policies but coping with the long-standing fiscal crisis amid an underperforming economy will be extremely challenging.
Promote international monetary cooperation;
Facilitate the expansion and balanced growth of international trade;
Promote exchange stability;
Assist in the establishment of a multilateral system of payments; and
Make resources available (with adequate safeguards) to members experiencing balance of payments difficulties.
The IMF is accountable to the governments of its member countries. At the top of its organizational structure is the Board of Governors, which consists of one Governor and one Alternate Governor from each member country.
The Board of Governors meets once each year at the IMF-World Bank Annual Meetings.
Twenty-four of the Governors sit on the International Monetary and Financial Committee (IMFC) and normally meet twice each year.
The IMF's day-to-day work is overseen by its 24-member Executive Board, which represents the entire membership, this work is guided by the IMFC and supported by the IMF staff.
The Managing Director is the head of the IMF staff and Chairman of the Executive Board and is assisted by four Deputy Managing Directors.
The International Monetary Fund (IMF) is an international organization that provides financial assistance and advice to member countries. It aims to stabilize exchange rates and facilitate international trade. The IMF monitors global economic trends and works with member countries to promote macroeconomic stability and reduce poverty. It provides policy advice, financing, technical assistance, and training to member countries. Key functions of the IMF include promoting international monetary cooperation, exchange rate stability, and helping countries deal with balance of payments issues and economic crises. The IMF is governed by its 187 member countries and led by a Managing Director. It derives its resources mainly from member country capital subscriptions and quotas.
The document summarizes the roles and impacts of the International Monetary Fund (IMF) and World Bank in Pakistan and other developing countries. It outlines how Pakistan has frequently received loans from the IMF since 1958 to address balance of payments issues and economic crises. While IMF programs in Pakistan in the 1990s failed to achieve targets, programs in the 2000s and 2010s helped restore fiscal stability. The World Bank also introduced structural adjustment programs and shifted to providing advice, expertise, and project-linked financing for development. However, both institutions have faced criticism for negative social, environmental, and economic impacts of their policy conditions.
The General Fund deficit in Illinois is projected to almost double from FY2015 to FY2016, increasing from an estimated $6.8 billion to $12.7 billion. This is due to a combination of declining revenues and increasing costs. Revenues are expected to decline by $3.6 billion from FY2015 to FY2016 due to the phase down of temporary income tax increases and the loss of one-time borrowing. Meanwhile, "hard costs" like pensions, debt service, and statutory transfers are projected to rise by $1.9 billion. If spending on core services is held flat, over half of spending in FY2016 would need to be deficit spending.
The document discusses the Federal Highway Trust Fund (HTF), which provides funding for public roadwork projects. It notes that the HTF is projected to have a $168 billion cumulative deficit by 2025 if nothing is done. Congress has taken $62 billion from the general treasury fund to provide short-term financing, but a long-term solution is needed to fix the HTF. Potential solutions discussed include increasing the gas tax, implementing a vehicle miles traveled tax, and establishing more toll roads, but no agreement has been reached. The HTF faces insolvency by July 31, 2015, which could delay important highway and transit projects around the country if not addressed.
Puerto Rico's true deficit has been shrinking and the Krueger Report shows that Puerto Rico can generate growing fiscal surpluses starting in 2017 through fiscal and structural reforms. The report outlines revenue increases of $3-4 billion annually by 2020-2025, expense cuts of $2-2.5 billion annually in the same period, and structural economic reforms. Puerto Rico has room to increase revenues through improved tax collection rates and increasing taxes in line with U.S. states. It also has opportunities to lower expenses given spending growth outpacing population decline. Historical examples show countries can achieve strong economic growth while implementing fiscal adjustments of 2% of GDP.
Republic of South Africa issues two new bonds in the international capital ma...SABC News
The Republic of South Africa was able to successfully place US$5 billion in bonds maturing in 2029 (10-year) and 2049 (30-year) in the international capital markets on 23 September 2019, with US$2 billion and US$3 billion placed in the 2029 and 2049 tranches respectively.
The document contains information about a group project on conditioning on foreign debt. It lists the group members and provides an introduction to concepts like foreign debt, World Bank, IMF, objectives of IMF and IMF assistance to Pakistan. It discusses why Pakistan takes foreign loans, how loans are allocated, and economic impacts of IMF conditionalities like effect on health, education, privatization, inflation and fiscal deficit. It also outlines effects on sectors like utilities, poverty levels, education and privatization in Pakistan.
External debt played both positive and negative roles in Pakistan's economic growth from 2000-2007. Pakistan faced a debt crisis in the late 1990s as external debt increased from $19.2 billion in 1990 to $33.6 billion in 1999. Musharraf's government took steps to reduce this debt burden through policies like the "debt limitation law" and debt was successfully managed after 2001 when Pakistan supported the US war on terror. While debt was reduced, continued management will be needed to encourage sectors like industry and agriculture and meet fiscal gaps.
The document outlines the Guam government's proposed budget for fiscal year 2017. It discusses the budget process and provides an overview of revenues and expenditures. The total proposed budget is $2.2 billion, which comes from several sources: the general fund ($899 million), special funds ($198 million), federal grants ($354 million), and semi/autonomous agencies ($772 million). The largest sources of revenue for the general fund are income taxes, business privilege taxes, and federal sources. The budget must be approved by the Guam Legislature.
The economic crisis of Puerto Rico has drained the tax base and led the largest three pension funds to have a 99% funding gap. The government is now responsible for $49 billion in unfunded pension obligations. An aging population means that by 2050, 30% of Puerto Rico's population will be 65+, doubling the current funds needed for pensions. However, the oversight board appointed to restructure Puerto Rico's debt has taken drastic measures like layoffs, benefit cuts, and tax increases. Long term, Puerto Rico must find at least $6 billion to fund future pensions in a way that does not further deteriorate the economic crisis or lead to more migration from the working population.
Similar to Chuuk Secession Draft Economic Analysis (20)
Gov. Ige sent a letter to California Congresswoman Anna Eshoo in response to her August 2020 request for information about Hawaii's pandemic response.
https://www.civilbeat.org/2020/08/california-congresswoman-wants-answers-on-hawaiis-virus-response-effort/
Audit of the Department of the Honolulu Prosecuting Attorney’s Policies, Proc...Honolulu Civil Beat
This audit was conducted pursuant to Resolution 19-255,
requesting the city auditor to conduct a performance audit of the Honolulu Police Department and the Department of the Prosecuting Attorney’s policies and procedures related to employee misconduct.
Audit of the Honolulu Police Department’s Policies, Procedures, and ControlsHonolulu Civil Beat
The audit objectives were to:
1. Evaluate the effectiveness of HPD’s existing policies, procedures, and controls to identify and respond to complaints or incidents concerning misconduct, retaliation, favoritism, and abuses of power by its management and employees;
2. Evaluate the effectiveness of HPD's management control environment and practices to correct errors and prevent any misconduct, retaliation, favoritism, and abuses of power by its
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3. Make recommendations to improve HPD’s policies, procedures, and controls to minimize and avoid future managerial and operational breakdowns caused by similar misconduct.
The report summarizes use of force incidents by the Honolulu Police Department in 2019. There were 2,354 reported incidents, an increase from 2018. Physical confrontation techniques were used most often (53% of applications). The most common types of incidents requiring force were simple assault (13.4%), mental health cases (13.2%), and miscellaneous public cases (6.7%). Most incidents occurred on Mondays and Saturdays between midnight and 1:59am and involved males aged 34 on average, with the largest proportion being Native Hawaiian/Pacific Islanders (34.5%).
The Office of Health Equity aims to eliminate health disparities in Hawaii. Its vision is for policies and programs to improve the health of underserved groups. Its mission is to increase the capacity of Hawaii's health department and providers to eliminate disparities and improve quality of life. The office identifies disparities, recommends actions to the health director, and coordinates related activities and programs. It works to establish partnerships, identify health needs, develop culturally appropriate interventions, and promote national health objectives. The office's strategic goals are to increase awareness of disparities, strengthen leadership, improve outcomes through social determinants, improve cultural competency, and improve research coordination.
The document calls for unity and collaboration between Native Hawaiian and Pacific Islander communities in Hawaii to address COVID-19. It summarizes that government leaders have failed citizens by being slow to respond to the crisis, not working together effectively, and one in three COVID cases impacting Pacific Islanders. It calls on officials to take stronger, transparent leadership and get resources like contact tracers deployed quickly from Pacific Islander communities. Each day without action will lead to more cases, hospitalizations and deaths. It establishes a response team to improve COVID data and policies for Native Hawaiian and Pacific Islander communities.
This letter from the ACLU of Hawaii to the Honolulu Police Department raises concerns about racial disparities in HPD's enforcement of COVID-19 orders and use of force. It cites data showing Micronesians, Black people, Samoans and those experiencing homelessness were disproportionately arrested. It recommends HPD end aggressive enforcement of minor offenses, racial profiling, and using arrest statistics to measure performance. It also calls for implicit bias training, data collection and transparency regarding police stops, searches and arrests.
This letter from the ACLU of Hawaii to the Honolulu Police Department raises concerns about racial disparities in HPD's enforcement of COVID-19 orders and use of force. It cites data showing Micronesians, Black people, Samoans and those experiencing homelessness were disproportionately arrested. It recommends HPD end aggressive enforcement of minor offenses, racial profiling, and using arrest statistics to measure performance. It also calls for implicit bias training, data collection and transparency regarding police stops, searches and arrests.
This document is a complaint filed in circuit court by Jane Doe against The Rehabilitation Hospital of the Pacific and several individuals. Jane Doe alleges she has experienced discrimination and harassment at her job as a physical therapist at Rehab Hospital based on her sexual orientation. She lists several causes of action against the defendants and is seeking damages for the harm to her career and emotional distress caused by the defendants' actions.
This document provides guidance for large or extended families living together during the COVID-19 pandemic. It recommends designating one or two household members who are not at high risk to run necessary errands. When leaving the house, those individuals should avoid crowds, maintain social distancing, frequently wash hands, avoid touching surfaces, and wear cloth face coverings. The document also provides tips for protecting high-risk household members, children, caring for sick members, isolating the sick, and eating meals together while feeding a sick person.
The Office of Hawaiian Affairs (OHA) requests that the State of Hawaii prioritize collecting and reporting disaggregated data on Native Hawaiians relating to the COVID-19 pandemic. Specifically, OHA asks for disaggregated data from the Departments of Health, Labor and Industrial Relations, and Human Services on topics like COVID-19 cases, unemployment claims, and applications for assistance programs. Disaggregated data is critical to understand how the pandemic is impacting Native Hawaiians and to direct resources most effectively. OHA also requests information on how race data is currently collected by these agencies.
The CLA audit of OHA from 2012-2016 found significant issues in OHA's procurement processes and identified $7.8 million across 32 transactions as potentially fraudulent, wasteful, or abusive. The audit found 85% of transactions reviewed contained issues of noncompliance with policies and laws, while 17% (32 transactions) were flagged as "red flags". Common issues included missing procurement documents, lack of evidence that contractors delivered on obligations, and contracts incorrectly classified as exempt from competitive bidding. The audit provides a roadmap for OHA to investigate potential wrongdoing and implement reforms to address deficiencies.
This document provides a list of pro bono legal service providers for immigration courts in Honolulu, Hawaii, Guam, and the Northern Mariana Islands. However, as of the January 2018 revision date, there are no registered pro bono legal organizations for the immigration courts in Honolulu, Hawaii, Guam, or the Northern Mariana Islands. The document also notes that the Executive Office for Immigration Review maintains this list of qualified pro bono legal service providers as required by regulation, but that it does not endorse or participate in the work of the listed organizations.
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Mayor Kirk Caldwell issued a statement regarding the construction of a multi-purpose field at Waimānalo Bay Beach Park. City Council member Ikaika Anderson had requested halting all grubbing work until September 15 out of concern for the endangered Hawaiian hoary bat. However, the environmental assessment states grubbing of woody plants over 15 feet tall should not occur after June 1 to protect young bats. The city contractor will finish grubbing by the end of May as required. Canceling the contract would cost $300,000 in taxpayer money. Therefore, the city will proceed with completing Phase 1, including a multi-purpose field, play area, and parking lot, for $1.43 million, and will review additional
Here is Gabe Whitley's response to my defamation lawsuit for him calling me a rapist and perjurer in court documents.
You have to read it to believe it, but after you read it, you won't believe it. And I included eight examples of defamatory statements/
Youngest c m in India- Pema Khandu BiographyVoterMood
Pema Khandu, born on August 21, 1979, is an Indian politician and the Chief Minister of Arunachal Pradesh. He is the son of former Chief Minister of Arunachal Pradesh, Dorjee Khandu. Pema Khandu assumed office as the Chief Minister in July 2016, making him one of the youngest Chief Ministers in India at that time.
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1. Economic Growth and Sustainability
CHUUK ECONOMIC
STUDY 2018 PRELIMINARY
FINAL
JDS Consulting
2. JDS Consulting – 2018 2
Index
Executive Summary and Fiscal Outlook
State Government Revenues
1. Local Revenues Collections
2. COFA Grants
3. COFA Trust Fund
4. Income Taxes and Remittances
5. Foreign Assistance (Other International Partners)
National Revenue Sources
A) FSM Trust Fund
B) Fishing Fee Revenue
C) Domicile of Foreign Companies
National Government Expenditures
FY18 FSM National Budget Summary
National Government Service Delivery Responsibilities
Economic Analysis Summary
Chuuk’s Opportunities for Economic Development
Additional Sources of Foreign Revenues Needed
Infrastructure Development
Tourism
Markets – Tourist Origins
o China
o Others – Japan, Korea, Russia
Sea and Air Transportation Access from Target Markets
o Cruise Ships
o Airlines
Accommodations
Visitor Activities and Attractions
AquaCulture
Import Substitution
Healthcare Spending
Conclusions
References
3. JDS Consulting – 2018 3
Executive Summary
JDS Consulting was contracted to conduct an economic study for the Chuuk State Political
Status Commission.
The purpose of the study is to:
Research economic forecasts and possible revenue sources for an independent Chuuk.
Research anticipated revenues and entitlements to its share of the Amended Compact
of Free Association (COFA), and COFA and FSM Trust Fund investments.
Provide economic analysis based on the current economic situation and an assessment
of anticipated revenues from Chuuk ocean revenues, foreign investment, foreign
assistance, and other revenue sources that can make Chuuk become economically
sustainable.
Map out potential opportunities based on the economic analysis.
Chuuk’s Current Political Status and Economic Situation
Chuuk is the most populous state in the Federated States of Micronesia (FSM), a nation formed
from four states (Chuuk, Pohnpei, Yap and Kosrae) formerly of the US Trust Territory of the
Pacific Islands (TTPI). These island states, formerly under Japanese administration, were
assigned to the United States by the United Nations to administer following WWII. Three other
states of the TTPI became the US Commonwealth of Mariana Islands, the Republic of Palau
(Palau) and the Republic of the Marshall Islands (RMI), respectively. The FSM became an
independent nation in 1986 when it left US trusteeship and entered into a Compact of Free
Association (COFA) with the United States. This new status was formally recognized by the
United Nations in 1990 when it ended the FSM’s Trusteeship status.
Chuuk has approximately 46% of the total population of the FSM. However, the population is
highly decentralized, being spread among 40 municipalities, 16 municipalities on islands within
the vast Chuuk Lagoon and 24 in the Outer islands.
Under the COFA, FSM citizens can freely travel to, live, attend school and work in the US or join
the US military and remittances from COFA migrants is an secondary source of income for many
Chuuk residents. Importantly, the FSM and the four states currently receive significant
economic assistance in the form of annual grants from the United States under the amended
COFA plus contributions to the Compact Trust Fund (CFT). The CTF was established to
contribute to the FSM budgetary self-reliance with an ongoing source of revenue after Fiscal
Year 2023. Also, under the COFA, the US can operate armed forces in Compact areas, and
demand land for operating bases (subject to negotiation) to support FSM and US defense.
4. JDS Consulting – 2018 4
The Chuuk economy, with FY2016 GDP (Gross Domestic Product) of $93.1M, is dominated by a
large public sector. With a population of 46,688, Chuuk’s per capita GDP is 53% less than the
average GDP per capita in the other states.(1) Roughly 50% of those employed are in the public
sector (mostly in education and healthcare). There is a very small tourism sector primarily
centered on the niche of wreck diving (albeit the world’s best). Finally, under the COFA, Chuuk
citizens can reside and work in the United States and remittances from family members living in
the US provide an additional source income for many Chuuk residents. However, much of the
population continues to rely primarily on subsistence fishing and agriculture.
Beginning FY24, the FSM (and thus Chuuk State) will no longer receive COFA Grants and will
instead rely on annuities from the COFA Trust Fund and the FSM Trust Fund. The actual amount
will depend upon future fund investment returns and Trust Fund Agreement (TFA) drawdown
rules.
Based on projected balances and TFA drawdown rules, within a few years following FY23, there
is significant risk that CTF annual income will be completely subject to market volatility and
likely insufficient to sustain budgetary needs. This is known as “the Fiscal Cliff.” While changes
to the TFA drawdown rules are being suggested to make annuities more regular and
predictable, the immediate impact would be even lower TF revenues beginning immediately in
2024. Any rule changes would need to be part of a bilateral agreement between the US and
FSM.
Moreover, for an independent Chuuk Republic, there is uncertainty regarding the outcome of
Chuuk’s future attempts to claim and receive its (or any) share of the CTF—adding another level
of unpredictability to a Chuuk Republic’s future income from these sources.
While Fishing Fees are a substantial source of revenue for the FSM National government, any
sharing of those revenues with the States is currently at the discretion of the National
government. Thus, while the current national government leaders have pledged to use Fishing
Fees to meet future Compact Trust Fund short-falls for the states, there is nothing to compel
future National leaders to do so, and Chuuk’s future receipt of those fees is uncertain.
Similarly, under international law, an independent Chuuk Republic would have the rights to
Fishing Fees for its 200 mile Exclusive Economic Zone (EEZ), but the amount it would depend on
negotiation of borders, allocation of Fishing Days to Chuuk by the Parties to the Nauru
Agreement (assuming the Chuuk Republic becomes a member) and the then market rate for
Fishing Days.
The following table summarizes the Fiscal Outlook beginning FY2024:
5. JDS Consulting – 2018 5
Revenue Assumptions:
The basis for these projections rely on historical averages and existing revenue sources (both
State and National) in the FSM and do not take into account potential revenue from future
Economic Development activities.
Operating Revenue
The projected Operating Revenue for Chuuk State and for an independent Chuuk Republic are
composed of ‘Taxes and Fees’, ‘Other Revenue’ and ‘Foreign Assistance’. The Taxes and Fees
Current Fiscal Outlook Summary for Chuuk FY2024 and beyond
Est. Annual Chuuk Gov’t Revenues ($Millions) CHUUK State
CHUUK Republic
(Independent)
Operating Revenue Low High Low High
Taxes / Fees
Revenue Share( Inc Tax, GRT) $2M $3M $4M $11M
Sales / Service Tax $2M $4M $2M $7M
Usage Fees / Other $1M $1M $1M $1M
Sub-Total Local Taxes/Fees $5M $8M $7M $18M
Other Revenue
FSM Trust Fund $3M $- $- $-
Fishing Fees $- $- $10M $16M
Captive Insurance (Foreign Domicile) $- $- $- $5M
Sub-Total Other Revenue $3M $- $10M $21M
Foreign Assistance
US: Compact Trust Fund Drawdown $8M $24M $- $24M
Other: China, US, EU, Japan $- $- $- $2M
Sub-Total Foreign Assistance $8M $24M $M $26M
Total Operating Revenue $16M $32M $17M $65M
Less Sector Allocations ($24M) ($24M) ($24M) ($24M)
Less Other Gov’t Expenses ($8M) ($8M) ($15M) ($15M)
Surplus (Deficit) ($16M) $0M ($21M) $26M
Infrastructure - Lump Sum
FSM Infrastructure Grants
Foreign Aid: US Trust Fund $4M $9M $9M
WB, ADB Grants, EU $10M $10M
Global Climate Fund $70M $70M
6. JDS Consulting – 2018 6
portion of revenues generally are not restricted by statute, and are composed of Personal and
Corporate Income Tax, and Business Taxes also known as ‘Gross Receipts Tax’. For the States,
these taxes are shared with the National government; 50% goes to the State, a portion is
deposited to the FSM Trust Fund and the remaining tax revenue goes to the National
government. For an independent Chuuk, all of these tax revenues would be retained.
The Tax revenue amount will fluctuate depending on the level of funds received from other
sources, especially the COFA revenues.
The Other Revenue category consists of funds received from existing domestic activities in the
FSM such as the FSM Trust Fund investment income, ‘Fishing Fees’ and ‘Captive Insurance’. The
FSM Trust Fund is intended to support FSM States with operating revenue shortfalls, post FY23.
Currently, the National government receives significant Other Revenue from ‘Fishing Fees’ and
‘Captive Insurance’; these funds are shared with the States on an ad hoc basis. Given the
uncertainty over Chuuk’s potential allocation of Fishing Fees post FY23, an independent Chuuk
would have rights to the Fishing Fees. The $10 million estimate would be a conservative
assumption. The estimate of $16 million is based on 25% of the $63 million FSM is currently
receiving as a member the Parties to the Nauru Agreement (PNA).
Similar to the National government, we assumed an independent Chuuk could also enable
legislation to establish an overseas domicile for captive insurance of foreign corporations. In
FY16, the National government received about $6M in revenues for Captive Insurance,
however, in the past has received over $27M in one year, alone. We based our estimate of $5M
on these factors.
‘Foreign Assistance’ consists of financial assistance generally in the form of grants from foreign
sources. Post FY23, the US Compact Trust Fund drawdowns will replace current COFA Grants.
The COFA Grants currently support about 70% of the economic activity in Chuuk. Post FY23,
conservative estimates by the Graduate School USA recommend a $30M annual drawdown,
with about $12M for Chuuk. This would be a significant decrease in total operating revenues
resulting in a projected funding deficit.
However, based on the current Trust Fund rules, the drawdown target is the FY23 Grant
amount, ~$83M. For Chuuk, we estimate a high of about $33M ($24M for sectors; $9M for
Infrastructure) for the first few years after FY23, all of which is earmarked to support primarily
the Education and Health sectors, with 30% for Infrastructure. All of the Trust Fund projections
are subject to the negotiations with the FSM, and the COFA- Joint Trust Fund Committee.
Sector Allocations are the current spending levels of roughly $24 M, in Chuuk for sectors such
as Education and Healthcare that are currently supported by COFA grants.
7. JDS Consulting – 2018 7
Other Government Expenses are the costs of maintaining a Chuuk government beyond the
Sector Spending. This is estimated as $8 M for Chuuk as a state in the FSM and $15 M for Chuuk
to operate as a National Government.
Infrastructure Grants are separated from Operating revenues as they are generally for a
predefined time period and for a specific program or project. In FY18, Chuuk will receive the
benefit of about $12M for the Telecommunications cable infrastructure project funded by the
World Bank. Also, COFA Infrastructure Carryover grants will support critical Infrastructure
development. Post FY23, we estimated 30% of the Trust Fund allocations will continue to be
stipulated for Infrastructure.
Summary
For 2024 and beyond, as a state in the FSM, Chuuk likely faces deficits of as much as $16 M, but
the status quo state budget can be maintained if the FSM National Government commits to
making up Chuuk’s COFA shortfall with the Fishing Fee revenues the National Government
controls. The National Government has indicated it intends to do so, but there is no guarantee
they will, or that future FSM national governments will continue to do so, unless there is a
change in the FSM constitution.
Alternatively, as an Independent Republic, Chuuk will be entitled under international law to
Fishing Fees for its EEZ, though the amount it can receive is uncertain. However, Chuuk will
also have to argue for its share of the COFA and FSM Trust Funds and results of that are
uncertain. Thus an independent Chuuk faces deficits of $21 M or surpluses of $26 M relative to
the status quo depending on the ability of its leaders to negotiate for those revenue sources.
8. JDS Consulting – 2018 8
FSM COFA Grant Sector Allocations
The COFA grant allocations support multiple sectors of the FSM. For the period FY2006-2016,
about 85% of the Sector (non-Infrastructure) allocations went to Education (including the
College of Micronesia) and Health. The remaining allocations went to Public Sector Capacity
Building (PSCB), Private Sector Development (PSD), Environment and Enhanced Reporting and
Accountability ERA. See Exhibits 1-3(2)
The grant portion of the Compact ends in September of Fiscal Year 2023.
Exhibit 1 – FY2006-FY2016 Grant Allocations by Sector (Non-Infrastructure)
Sector FSM_All Natl COM-FSM Chuuk Kosrae Pohnpei Yap
% By State 100% 4.2% 4.6% 39.3% 10.9% 25.0% 15.9% % By Sector
Education $365M $14M $32M $135M $33M $96M $55M 53%
Health $223M $7M $94M $23M $63M $36M 32%
PSCB $49M $6M $23M $8M $6M $7M 7%
PSD $30M $2M $10M $8M $2M $8M 4%
Environment $18M $M $7M $2M $4M $4M 3%
ERA $6M $M $3M $1M $1M $1M 1%
Grand Total $690M $29M $32M $271M $75M $173M $109M 100%
Exhibit 2 – FY2006-FY2016 Grant Allocation (Non-Infrastructure) by National/College of Micronesia
(COM)/ State
Education,
53%
Health, 32%
PSCB, 7%
PSD, 4%
Environment, 2%
ERA, 1%
FSM Sector
Allocations
FY2006-FY2016
Education Health PSCB PSD Environment ERA
10. JDS Consulting – 2018 10
State Government Revenue Sources
1. Local Revenue Collections
For FY2016, total Chuuk State revenues were reported at $37.8M. The COFA grants accounted
for about 75% of total revenues. Non-COFA revenues include taxes, fees and other revenue of
approximately $8M.
The table below summarizes Chuuk State local revenue collections for FY2015 – FY2017
Local Tax and
Revenue
2015 2016 2017 Average
Revenue Share $2.7M $3.3M $3.5M $3.2M
Sales / Service $3.5M $4.M $4.3M $3.9M
Fees / Other $.9M $1.1M $1.1M $1.M
Total $7.1M $8.4M $8.9M $8.1M
2. CHUUK COFA Grants
a) Sector Allocations (Non Infrastructure) – FY2006 – FY2016
From FY2006-FY2016, approximately 85% of the COFA allocated grants (non-Infrastructure)
went to the priority Education and Health sectors in Chuuk (2). Approximately 8% of the
grant allocations went to Public Sector Capacity Building (PSCB), the remaining 7% of
allocations went to Private Sector Development (PSD), Environment, and Enhanced
Reporting and Accountability (ERA).
The average sector allocation for the period reviewed was ~$24M
11. JDS Consulting – 2018 11
Exhibit 4 – Chuuk FY2006-FY2016 COFA Grant Allocations by Sector (Non-Infrastructure) (2)
Chuuk Sectors FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 Total
Education $14M $14M $10M $15M $15M $14M $10M $10M $9M $13M $11M $135M
Health $6M $7M $7M $11M $9M $9M $9M $9M $9M $9M $10M $94M
PSCB $3M $3M $3M $1M $1M $4M $2M $2M $2M $2M $1M $23M
Environment $1M $1M $1M $M $1M $1M $1M $1M $1M $1M $1M $7M
PSD $1M $1M $1M $2M $1M $1M $1M $1M $1M $1M $.4M $10M
ERA $1M $1M $1M $1M $1M $3M
Grand Total $25M $25M $22M $28M $26M $29M $23M $22M $22M $25M $24M $271M
b) Infrastructure Grants
The COFA agreement stipulates 30% of grant funds to be used for Infrastructure
development. As of early 2017, $157M unallocated Amended Compact Infrastructure
grants remained available to the FSM and States. Infrastructure Grant allocations for
FY2006-2016 are shown below. Exhibit 5
FY Year Natl Chuuk Kosrae Pohnpei Yap FSM_All
FY2006 $58.7M $58.7M
FY2007 $5.2M $.9M $6.1M
FY2009 $.6M $35.M $.6M $4.3M $2.6M $43.M
FY2010 $9.3M $5.7M $14.9M
FY2011 $1.1M $14.5M $15.5M
FY2012 $.8M $1.M $1.7M $5.7M $9.2M
FY2013 $1.2M $.2M $1.3M
FY2014 $.3M $.3M
FY2015 $.5M $.1M $2.6M $3.2M
FY2016 $2.M $.M $2.M
Grand Total $77.1M $38.4M $1.6M $14.2M $23.M $154.3M
Exhibit 5 – FY2006 – 2016 – COFA Infrastructure Grant Allocations
Education, 50%
Enhanced Reporting
and Accountability,
1%
Environment, 2%
Health, 35%
Private Sector
Development, 4%
Public Sector
Capacity Building,
8%
12. JDS Consulting – 2018 12
Unspent infrastructure grants provide an opportunity to invigorate the economy.
Critical infrastructure development, including hospitals, schools, roadways, power,
water, wastewater and solid waste systems can support economic and business
development opportunities.
Non-US Foreign Aid Infrastructure development projects currently underway in Chuuk
include Telecommunications / Cable projects funded by the World Bank as well as
water purification systems with support from the Japan International Cooperation
Agency (JICA). Other priority infrastructure projects may also include ferries, docks and
airport terminal improvements.
c) Compact Grants FY2019 – FY2023
Under the existing amended COFA agreement, for the periods FY2019 – FY2023,
approximately $320.8M remain for allocation (unadjusted for inflation)
Historically, Chuuk received approximately 38% - 40% of sector grant allocations,
therefore it could be expected to receive that percentage of the remaining $320.8M.
3. Compact Trust Fund –
As of November 2017, the Compact Trust Fund (CTF) balance is about $574M, this
amount includes the FY18 U.S. contribution of about $31M. US contributions to the
fund will continue through FY2023. Exhibit 6 below shows the accumulated fund
balance and accumulated contributions for the period FY2005 – FY2017.
Exhibit 6 – Compact Trust Fund Balance by Year
$62M $79M $97M $116M $136M $158M $180M $204M $229M $255M $282M $310M $340M
$2M
$8M
$26M $4M
$2M
$19M
$18M
$53M
$94M
$126M
$115M
$157M
$203M
$M
$100M
$200M
$300M
$400M
$500M
$600M
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
FSM Compact Trust Fund FY05-FY17
Contributions Balance Accumulated Earnings
13. JDS Consulting – 2018 13
With an estimated annual growth rate between 5% and 6%, there is high probability the
fund balance beginning FY24 will be over $900M.
The structure of the CTF includes a main ‘A Account’, a ‘B Account’, and a ‘C Account’.
The ‘B Account’ will be created in FY2022, and used accumulate CTF investment income
for distribution to the FSM and States. The ‘C Account’ is an important buffer against
market volatility during the distribution period after FY23. (1)
As of FY16, the ‘C Account’ balance is $94M.
Based on the current TFA drawdown rules, CTF revenue in the first few years after FY23
could be sustained at FY23 Grant levels, as the ‘C Account’ can be used to cover
investment income shortfalls. However, in years where investment income and the ‘C
Account’ balances are insufficient, market volatility could potentially cause significant
issues for the FSM finances and economy and thus for Chuuk.
TFA Drawdown Rules Modeling
The sample exhibits below show different outcomes based on financial modeling of current
TFA drawdown rules, and alternative rules designed to reduce the impact of market
volatility. These exhibits are for demonstration purposes only.
The Fiscal Cliff - Exhibit 7 shows a sample scenario, based on the current TFA
drawdown rules. Starting FY24, the desired CTF revenue (drawdown) is ~$80M.
Annual CTF revenue will be based on the prior fiscal year Fund investment income plus
any ‘C Account’ buffer.
In this example scenario, CTF investment income averages 5% annually, however, in
2028, there is a negative market return, of -1%.
The desired $80M revenue is sustained for a few years, through FY2027. However, in
FY2028, the ‘C Account’ is depleted and revenue drops 45%, from $31M to $17M. Also,
the negative fund performance in FY2028, results in a zero drawdown the following
year, in FY2029.
Fiscal Year 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033
CTF Income % 5% 5% 5% 5% -1% 5% 5% 5% 5% 5%
Share% Estimated Annual CTF Revenue by National, State Government
National 9% $7M $7M $7M $7M $4M $0.00 $3M $3M $3M $3M
Chuuk 39% $31M $31M $31M $31M $17M $0.00 $15M $15M $15M $15M
Pohnpei 25% $20M $20M $20M $20M $11M $0.00 $10M $10M $10M $10M
Yap 16% $13M $13M $13M $13M $7M $0.00 $6M $6M $6M $6M
Kosrae 11% $9M $9M $9M $9M $5M $0.00 $4M $4M $4M $4M
Total 100% $80M $80M $80M $80M $43M $0.00 $39M $39M $39M $39M
Table 1 – Example market returns FY24 – FY33, based on current TFA drawdown rules. The
‘Share %’ is based on the average COFA Grant allocations from FY2006-FY2016. The
drawdown amount as well as the State’s share is subject to change.
14. JDS Consulting – 2018 14
Exhibit 7 – CTF Annuities based on current TFA Drawdown rules – EXAMPLE Only
Exhibit 8 shows the same example market returns, however, the proposed CTF
drawdown rule is based on a 3-year average fund balance multiplied by a pre-
determined percentage (e.g., 8%).
Exhibit 8 -Drawdowns based on 3 – year average fund balance
Exhibit 9 shows the same market returns, however, the proposed CTF drawdown rule is
based on a fixed $30M annual drawdown for all of the FSM governments. The Chuuk
State portion would be about 40% (or ~$12M). The $30M fixed annual drawdown, as
suggested by the Graduate School USA, would be a significant reduction to Operating
$31 $31 $31 $31
$17
$0
$15 $15 $15 $15
$0
$5
$10
$15
$20
$25
$30
$35
2024 2025 2026 2027 2028 2029 2030 2031 2032 2033
CTF Drawdown Scenario Average 5% YOY based on current
TFA Drawdown Rules
Natl_COM Chuuk Pohnpei Yap Kosrae
$25
$28
$29 $30 $29 $28
$26
$25
$23 $22
0
5
10
15
20
25
30
35
2024 2025 2026 2027 2028 2029 2030 2031 2032 2033
CTF Drawdown Scenario Average 5% YOY based on 3 Year
Average Fund Balance
Natl_COM Chuuk Pohnpei Yap Kosrae
15. JDS Consulting – 2018 15
Revenues and thus Sector funding. And, if not replaced, would likely create significant
deficits.
Exhibit 9– Drawdowns based on a fixed $30M annuity at the FSM Level
As of FY16, the percent of US contributions to the trust fund amount to 89.41%. The
FSM contributions to the Compact Trust fund amount to 10.59% (9)
Options: A renewed arrangement with the US to enhance the mutually beneficial relationship,
would require both US executive and congressional approval.
4. Revenue Sharing (Taxes, Foreign Assistance, Fishing Fees, Corporate Taxes)
Revenue Sharing with FSM State governments is as follows:
Revenue Source (10) Type State Share
Income Taxes Personal and Corporate 70% (20% deposited to FSM
Trust Fund as of 2015)
GRT (Gross receipts tax) 50%
Goods and Services Sales and Excise (rate 6%)
Services & License Fees
Airport Departure Fees
100%
Foreign Assistance COFA Grants
Project Grants
Small Project
Distribution depends on
purpose; default evenly among
states (and national?)
Fishing Revenues Parties to Narau (PNA) 0% + ad hoc sharing
Corporate Taxes Captive Insurance 0% + ad hoc sharing
$12 $12 $12 $12 $12 $12 $12 $12 $12 $12
$0
$2
$4
$6
$8
$10
$12
$14
2024 2025 2026 2027 2028 2029 2030 2031 2032 2033
CTF Drawdown Scenario Average 5% YOY based on an
annual $30M fixed FSM drawdown
Natl_COM Chuuk Pohnpei Yap Kosrae
16. JDS Consulting – 2018 16
5. Foreign Assistance
Per the FSM Constitution, Foreign financial assistance received by the national government
shall be deposited in a Foreign Assistance Fund. Except where a particular distribution is
required by the terms or special nature of the assistance, each state shall receive a share
equal to the share of the national government and to the share of every other state.
Information, Communication and Telecommunications (World Bank ICT) grants of
$47.5 million are available to support reform initiatives to lay fiber connection for
internet connectivity to Chuuk and Yap. (4) Per the FY18 National FSM budget (PL 20-42,
PL 20-54), $12M is allocated for the Chuuk/Yap Telecommunications cable project.
EU NIP (National Indicative Program) The EU agreement with the FSM provides aide in the
amount of EUR 14.2M or approximately US $17M (7). The components of the EU aide
agreement include Renewable Energy & Energy Efficiency (84%), Measures in favor of
civil society (7%), and Support measures (9%). Assumption: Total aid shared equally
among FSM Governments
Table 2: State Revenue Sources Summary by Period
Source Period FSM Amount Chuuk State Amount
/ Share
COFA Grants FY2019-FY2023 $320.8M
(unadjusted for inflation)
Est. $122M
(unadjusted for inflation)
COFA Grant
Infrastructure Carry
Over (CO)
FY2018-FY2023 ~$157M
Est. 40% of COFA
Carryover
COFA Trust Fund FY2024 -
Target: FY23 Grant
Amount (~$83M)
Est. 40% of CFT
drawdown
FSM Trust Fund Annual Est. $100M
To be Determined
(TBD)
Taxes Annual $8M Average
Remittances (a) Ongoing Varied Varied
Foreign Aid: JICA FY2017 - present $2M
World Bank ICT FY2017 - present
$47.5M (shared with
Yap)
EU NIP 2016-2020 $17M
$3.4M (1/5th of total
aid)
(a) Citizens of the FSM are admitted to the US as nonimmigrants under terms of the COFA
agreement and are eligible to live, attend school and work in the US indefinitely.
Children of COFA migrants born in the US are US citizens.
17. JDS Consulting – 2018 17
NATIONAL Government Revenue Sources
In addition to tax revenues, COFA Grants (primarily for the College of Micronesia), significant
National Government revenue sources include the FSM Trust Fund, Fishing Fees, and Corporate
Taxes.
A) FSM Trust Fund – The FSM Trust fund is a separate fund from the Compact Trust Fund. The
purpose of the FSM Trust Fund is to create a single investment fund in which all levels of
government may participate in order to contribute to the long-term financial viability of the
FSM by providing an additional source of revenue and to enhance the capacity of the
National Government
As of FY2016, the FSM Trust fund balance is $94.12M (6).
National Government distributions – Per the FSM Constitution, “at the end of each
financial year the Board shall determine the maximum amount of funds available for
distribution to the National Government in the following fiscal year.” (8)
B) Income Taxes are shared between the National Government and State Governments. The
National government share is 30%, the State Governments share is 70% with 20% deposited
to the FSM Trust Fund as of FY2015
C) Fishing Fee Revenue
The FSM receives fishing fee revenue as a member nation of the Parties to the Nauru
Agreement (PNA). In FY2016, PNA daily fishing rates average $10,000 per day. In FY16,
FSM received over $63M in fishing revenues (3). Projected fishing day allocations to the
FSM will be 9,000 Fishing Days for FY2018 and FY2019.
In 2017, a ten-year fishing agreement was reached between FSM and Japan. The
agreed annual financial package is approximately $22.9 million for 2018 and 2019,
respectively. (5) Revenues from this agreement is not considered grant aid and not
subject to revenue sharing with the states.
D) FSM Earnings from Captive Insurance
National government revenues from the FSM Domicile of foreign companies (captive
insurance) are estimated at $6M for FY2016.
An agreement with the FSM National Government to share revenues with State governments
to fund priority sectors may address potential revenue shortfalls anticipated when the COFA
Grants end in FY23.
18. JDS Consulting – 2018 18
NATIONAL Government Expenditures
FY18 FSM National Budget
Table 3 summarizes the FSM FY18 National Budget, including budget allocations to directly
benefit the States and the FSM Trust Fund.
In this budget, of the $17M directly allocated to the states, $12M is for the Chuuk/Yap
Telecommunications cable infrastructure project. Also, Congress allocated $5M to the FSM
Trust fund. Other Congressional acts include spending for priority infrastructure projects in the
Chuuk as well.
Division FY18
FSM
Nat’l
Budget
Personnel Travel Contractual OCE
(?)
Fixed Spending
in States
FSM
Trust
Fund
Executive Branch $19.5M $9.9M $1.9M $5.8M $1.5M $.3M
Legislative Branch $4.4M $1.4M $.9M $1.7M $.4M $.2M $.5M
Agencies of Nat’l
Government
$2.3M $1.1M $.4M $.37M $.4M $.04M
National Judicial $1.5M $.9M $.2M $.18M $.2M $.03M
Public Auditor $.8M $.5M $.1M $.09M $.1M $.01M
Special Programs $.4M $.2M $.M $.05M $.1M $.001M
Capital & Human
Resources Dev
$36.3M $16.M $5.M
Grants, Subsidies
and Contributions
$12.1M $.5M
Grand Total $77.2M $14.M $3.5M $8.1M $2.6M $.6M $17.M $5.M
Table 3 – FY18 FSM National Budget Summary (FSM Public Law (PL) 20-42, PL-20-54)
National Government - Service Delivery Responsibilities
The table below summarizes the Service Delivery Responsibilities between the NG and State
Government. An independent Chuuk would assume financial responsibility for expenditures
currently covered by the National Government.
National Government (10) State Government
FSM Police
FSM Customs and Immigration
FSM Finance
College of Micronesia
FSM Telecom
19. JDS Consulting – 2018 19
NORMA—fishery policing
Intra-state transportation
Other:
National Defense
Ratify Treaties
Impose taxes, duties, tariffs
Impose income taxes
Issue currency
Regulate banking, foreign and
interstate commerce, insurance
Regulate navigation, shipping
National postal system
Define national crimes and
penalties
Table 4 - Estimated expenditures for an Independent Chuuk Republic to cover NG service
delivery responsibilities (non-Infrastructure)
Department
Chuuk
Republic
Department of Justice $2.5M
Department of Foreign Affairs $2.M
Legislature $2.M
Department of Health and Social Affairs $1.5M
Office of the President $1.M
College of Chuuk $1.M
Office of Environment and Emergency Management $1.M
Department of Finance and Administration $1.M
Department of Resources and Development $1.M
National Oceanic Resource Management Authority (NORMA) $.5M
Department of Education $.5M
Other Grants, Subsidies and Contributions $.5M
Grand Total $14.5M
20. JDS Consulting – 2018 20
Economic Analysis Summary
COFA Grants, COFA and FSM Trust Funds, Tax revenue and Foreign Assistance are currently
available to support economic sustainability through initiatives such as Export development,
Private Sector Development (example: incentives for local entrepreneurs) and possibly foreign
investment opportunities.
Some revenue sources may be at risk depending on the timing for an independence movement,
and agreements reached with the FSM and the US.
As an independent nation, revenues from fishing rights, domiciling of captive insurance, selling
rights to sea bed mining, establishing a shipping registry, internet domains, residency or
citizenship in return for investment, are all possible.
As an independent island nation, foreign investment may be more available. Right now, the
foreign investment laws are at the national level.
Requirements: Effective communication, collaborative leadership, governance and
accountability, capacity building (education) for ongoing economic development
21. JDS Consulting – 2018 21
CHUUK’S OPPORTUNITIES FOR ECONOMIC DEVELOPMENT
Regardless of Chuuk’s future political status, strengthened collaboration with strategic
partners and stakeholders including the citizens of Chuuk is foundational to managing and
achieving the desired outcome of economic sustainability and growth. A public-private
collaboration with owners of large businesses on the islands to strongly support structural
changes (FDI laws, foreign ownership) could increase private sector development and economic
sustainability. This could facilitate foreign investment and assistance from foreign partners (US,
EU, Japan, China, Australia, Canada, World Bank, Korea) and private foundations and investors.
In order to attract greater foreign private investment and improve the business climate,
whether in the FSM or as a independent republic, Chuuk might reexamine the laws and
regulation surrounding Foreign Direct Investment.
For small and medium sized businesses, the foreign ownership is limited. Currently,
local ownership of (51%-60%) or a residency of more than 5 years is required. A
reduction of this limit could increase investment and development.
Develop criteria to award tax or licensing incentives to encourage local entrepreneurs
Ease restrictions on land and business ownership by outside investors to facilitate
business sector development proposals.
Offer citizenship to those willing to make a minimum investment.
Additional Sources of Foreign Revenues Needed
With the ending of the Compact Grants after 2023 and the anticipated reduced and
unpredictably variable payments from the Compact Trust Fund thereafter, additional sources of
income will be need to be developed to support Chuuk’s economy and its government finances.
This will be true regardless of Chuuk’s political status. Though the Compact Grants will end,
foreign aid and investment will continue to be a critical component of Chuuk’s fiscal and
economic picture, though the sources will become more diverse and less predictable.
Funds to counter the impacts of climate change should be pursued, whether from
governments, foundations or individuals. However, Chuuk will also need to pursue economic
development to provide the jobs, income and taxes both to fund the government and create
positive economic outcomes for its people. Fortunately, most of the following suggestions can
be pursued regardless of Chuuk’s political status. All the options are just suggestions, with
positives and negatives. Each will need to be considered for their cultural, environmental and
economic impacts and acceptability.
Like other Pacific Islands, Chuuk’s main opportunities are in tourism, fishing, aquaculture (fish
and shrimp farming, pearls, etc.), fish processing, and tropical agricultural products (coconut,
kava, breadfruit, noni) for export.
22. JDS Consulting – 2018 22
However, the greatest economic resource for the people of Chuuk has always been the sea—
the immense protected Chuuk lagoon and the vast open ocean surrounding it. As with other
Pacific islands, land in Chuuk is scarce and precious and throughout its history, Chuuk has relied
on the sea for fish and other marine resources and for transportation of goods and passengers.
For the last 70 years, Chuuk has been known primarily for wreck diving, albeit the best in the
world. Chuuk can expand on this base to include fishing and fish processing, sea floor mining,
fish farming, and tourism that takes advantage of Chuuk’s tremendous natural beauty above
and below the surface.
Infrastructure Development
Chuuk’s dispersed population, on multiple islands across a vast lagoon and beyond creates a
challenge for the traditional model of centralized infrastructure development—centered on
roads, central power plants and grids, phone lines, water treatment plants, sewage treatment
plants, landfills, large centralized schools and hospitals. In Chuuk, as in other archipelagos
around the world, this has tended to result in most development spending occurring on a main
island, usually the capitol. This can be effective if there is a good transportation system to bring
people to the main island for needed services, but more often the population simply moves to
the main island.
However, increasingly technology is favoring small scale dispersed infrastructure such as: solar
panels and micro-grids, wireless voice and data and distance learning, composting toilets and
other green technologies.
Similarly, Chuuk’s lagoon should not be seen as a barrier but a resource for transportation. For
thousands of years, the people of Chuuk lagoon and beyond were connected by sailing canoe.
Under the Japanese administration, in the decades before it became the center for the
Japanese navy, Chuuk was a center of commerce, with fish processing plants, copra farms and
sail boats filled the lagoon and the docks on every island.
Chuuk’s future infrastructure could focus on docks and a ferry system, connecting the islands,
moving goods and people in ways that roads and cars cannot. Another possibility is a more
organized and regulated water taxi service.
Much of Chuuk’s tourism potential derives from the variety of marine recreational activities
that can be offered, especially in the lagoon and encompassing reefs of the principal islands.
23. JDS Consulting – 2018 23
The Chuuk maritime sector can be developed to adequately serve international trade, the inter-
island movement of goods and people, the fishing industry, cruise ship arrivals and recreational
activities for both Chuuk residents and visiting tourists.
Recent FSM legislation made budget allocations to fund priority infrastructure projects in Chuuk
such as telecommunications, road improvement, and upgrades to equipment, municipal docks
and bridges.
Other critical infrastructure improvements to water, power, sewage, and medical facilities will
be key to economic development initiatives such as tourism.
TOURISM
As with most other islands around the world, the greatest potential for Chuuk’s economic
growth is through tourism. Currently, Chuuk is well-known for its wreck diving, arguably the
best in the world, but a small niche market. This ignores Chuuk’s tremendous natural beauty,
both above and below water.
An aggressive and phased approach to Tourism development will be a sustainable source of
revenues for the island and:
Is indigenous driven to preserve the culture, and protects and maintains the
environment and rich natural resources
Brands Chuuk as a preferred destination for travelers (safe, pristine, adventurous, etc.).
Develops infrastructure to support visitors (transportation, sewage, boat docks, access
roads)
Segments the tourist market, and attracts “value driven” visitors
Expands on niche areas such as diving, snorkeling, canoe sailing, traditional navigation,
surfing, sports fishing and other water activities
Addresses land and business ownership regulations and other issues
Provides tax and licensing incentives to encourage investment
24. JDS Consulting – 2018 24
MARKETS—TOURIST ORIGINS
China
The greatest opportunity for Chuuk to develop a large tourism industry (or as large as Chuuk
desires) is to focus on the growing and underserved Chinese market.
China is the largest source of tourists in the world and the numbers are growing quickly which
much room for further growth. According to the China Outbound Tourism Research Institute, in
2016 China was the source of 154 million international travelers. This is predicted to grow to
more than 200 million Chinese travelling overseas by 2022. China’s international travelers are
already the world’s biggest-spending tourists: in 2016, (the latest year with reliable numbers)
Chinese tourists spent US$261 billion on their vacations overseas, compared with US$124
billion by Americans. As incomes in China continues to increase, more Chinese will think about
international travel (currently less than 10 per cent of Chinese currently hold passports).
Chinese Tourism in the Region
Chinese tourists have shown an appetite for Pacific island travel, but geo-politics and other
concerns limit or threaten the ability to grow Chinese tourism in many of those locations. This
presents an excellent opportunity for Chuuk to become a preferred island destination for
tourists from China.
The following is a summary of the current state of Chinese tourism in the CNMI, Guam, Palau
and Yap.
Chinese Tourism in Saipan and the Commonwealth of Northern Mariana Islands (CNMI)
After a decade of economic decline following the end of its garment industry and declining
Japanese tourism, Saipan and the CNMI’s economy has been booming, growing an astounding
28.6% in 2016, as a result of Chinese investment and tourism.
Unlike the rest of the rest of the United States, where it is relatively difficult and expensive for
Chinese visitors to obtain a VISA, the CNMI has a VISA waiver program for China that allows
visitors from China to visit and stay for up to 45 days without a VISA. The Marianas Visitors
Authority (MVA) now estimating that the number of Chinese visitors has now surpassed the
Koreans—two of the CNMI’s basic markets as Japanese arrivals continued their long-term
decline. MVA’s FY’16 numbers showed that tourist arrivals on Saipan reached 501,489 for the
first time in 10 years. Of that total, 206,483 were from China.
The CNMI’s economy has benefited from substantial Chinese investments, with Hong Kong-
based Imperial Pacific International the biggest contributor to the Northern Mariana Islands’
economy with its multi-million dollar casino resort project. Car rentals, grocery stores,
25. JDS Consulting – 2018 25
restaurants, shops, tour agencies, real estate “sales” (leases up to 99-years, as only those of
“Northern Marianas decent” can own land) have all contributed to the growth.
MVA has also tapped Skywalker Communications Group, an advertising and marketing firm
based in Beijing, as its promotional arm as they continue to take advantage of the huge Chinese
market.
The entry of charter flights and other low cost carriers flying non-stop from major cities in China
to Saipan also helped in the growth of tourism. China Eastern, Dynamic, Sichuan Airlines, Hong
Kong Airlines and low cost carrier counterpart Hong Kong Express have daily non-stop flights
along with Korean airlines Asiana, Eastar, Jeju Air, T’way, Busan Airlines, Jin Air, Korean Airlines
and Philippine Airlines.
However, Chinese tourism to the CNMI is threatened on multiple fronts:
The US has not renewed the CNMI’s CW worker program, whereby businesses in the
CNMI could bring in foreign workers (mostly from the Philippines) for construction,
hotel, casino and other tourism related jobs. The need for workers who speak Mandarin
Chinese is especially acute. Many of the long-term CW workers in the CNMI will need to
leave this year (presenting job opportunities for Compact migrants from Chuuk to obtain
jobs and experience in the construction and tourism sectors). With no CW workers, the
completion of the casino, and further hotel development (including casino construction
on Tinian and Rota) will be a challenge.
The VISA waiver program for China is at risk of being eliminated if relationships between
the two countries deteriorate further over issues like trade, North Korea, China’s
expansion in the South China Sea or other geo-political issues. Alternatively, China
could restrict travel to the US if relations between the two counties sour further.
There may be crackdowns by China on the casino, as there were in Macao, over issues
of money-laundering and capital flight. Alternatively, the US could crack down over the
same issues as it did when it fined the Dynasty casino in Tinian $75 million, which along
with Typhoon Soudelor, resulted in its closing.
Thus, the CNMI’s ability to grow, or even maintain its growing Chinese tourism and resulting
booming economy is at risk. This presents an opportunity for Chuuk to attract Chinese tourism
and related investment as Chuuk will not present the same geopolitical risks to a Chinese
investor.
Chinese Tourism in Guam
In 2016, 26,000 Chinese tourists visited Guam (10% of the number of Chinese visiting the CNMI
and only 2% of Guam’s total of 1.23 million visitors). Because Guam is a Territory of the United
States, but was not granted a VISA waiver program, obtaining a VISA to travel to Guam from
China is difficult and expensive.
26. JDS Consulting – 2018 26
Given the ongoing military and political tensions between China and the United States and the
upcoming US military build-up on Guam, it is unlikely this situation will change any time soon.
Moreover, Guam has its own labor issues as it is also highly dependent on foreign workers
under the H2-B VISA program, especially for construction, and that program was completely
curtailed by the US, with a recent exception made for construction of US military projects. Thus,
Guam will have difficulty expanding its current tourism infrastructure over the coming years
and will likely continue to focus on its prime Japanese and Korean tourism markets.
Chinese Tourism in Palau
Visitors from China have played a major role in the growth of Palau’s tourism industry.
Currently, most of the tourists from China arrive as part of package tours via charter flights. The
result has been growth in lower grade hotel utilization and capacity. However, in recent years
Palau has made a conscious effort to limit the number of Chinese tourists in an effort to both
upgrade to “higher value” tourism and to maintain its pristine natural environment upon which
the nation takes great pride and is Palau’s principle “brand.” Thus, whereas Palau received
88,476 tourists from China in 2015, that number dropped to 57,866 tourists from China in 2017
due to a reduction by half of the number of charter flights from China allowed by Palau.
This presents an opportunity for Chuuk to target the Chinese package tour industry with charter
flights from China looking for an alternative to Palau.
Chinese Tourism in Yap
Yap and its atolls have a population of 7,000 people and currently receives about 5,000 visitors
a year, but Chinese investors have been planning major tourism developments, possibly in
response to the limitations being placed on Chinese tourism in Palau. The company
Entertainment & Travel Group (ETG) wants to build a mega resort of up to 1,500 rooms,
coupled with an offer to open a regular, direct airline service from China. This was scaled down
from the original version of the project which was originally designed as 10,000-hotel room
complex, on leased property.
This plan for large scale Chinese tourism development has been very controversial in Yap,
where cultural traditions remain very strong and visitors would outnumber the small
population. Land ownership issues, especially on Yap’s main island where the development is
planned, are if anything, even more problematic than in Chuuk. Thus, Chuuk appears better
positioned than Yap to eventually pursue the large and growing demand for tourism from China
to the region.
Opportunity for Chuuk: Working with the Chinese tour operators and developers, currently
focused on Palau, Yap and the CNMI to identify suitable locations to develop resorts in Chuuk
that would be served via charter flights from China.
27. JDS Consulting – 2018 27
Others – Japan, Korea, Russia
Chuuk’s reputation for the world’s best wreck diving already attracts diving enthusiasts from
around the world who are well served by the relatively small Blue Lagoon, Truk Stop, and two
live aboard vessels. However, by increasing its air and sea access, amenities and offerings, it can
broaden its appeal—first to include families of divers and then those looking for a tropical
island vacation. Inter-island cruises (discussed below) would allow Chuuk to tap into another
large source of international travelers and further develop its tourism offerings.
Chuuk has historic connections with Japan that might be reimagined and used to develop
increased investment and tourism. Japan’s growing population of retirees is a potential market.
Russians, especially those working in the Russian Far East, have 4-6 weeks of vacation, which
they typically take in the winter. Guam and Saipan have been popular, but extended stays with
family can be expensive and finding space in Saipan has been increasingly difficult.
Korea has passed Japan as the largest source of tourists to Guam and the second largest to the
CNMI. Factors include Korea’s strong and growing economy, cold winter weather, and most
importantly, the many Korean budget airlines flying to Guam and Saipan. Korean airlines flying
to Guam and/or Saipan now include Asiana, T’Way, Jin Air, Busan Air, Jeju Air, and Korean Air. If
any one of these carriers were to extend a flight from Guam to Chuuk and offer discount fares,
it would open up Chuuk to visitors from Korea, as well as Japan, China, Russia and Guam itself.
SEA and AIR TRANSPORTATION ACCESS FROM TARGET MARKETS
For Chuuk to increase its tourism industry and attract investment, it will need to be more easily
and cheaply accessed by visitors from its target tourist markets. However, scheduled airlines
will generally not increase service until the tourist amenities are in place. That is why Chuuk’s
most immediate opportunities are: 1) charter flights from China and 2) cruise ships from
Guam/Saipan, China and Australia.
Cruise Ships
For islands around the world—whether in the Caribbean, South Pacific, or the Mediterranean,
the tourism industry is often initiated through visits from cruise ships. This solves multiple
problems—especially lack of airline access, land, accommodations, and infrastructure. The
downside is that the economic benefits of cruise ships are more limited than other forms of
tourism development. However, regular visits by cruise ships allow the islands to develop their
tourism offerings: diving, day use beach resorts—featuring multiple water activities, tourist
markets—featuring indigenous arts and crafts and other souvenirs for purchase, restaurants,
historical and cultural tours, entertainment, deep sea fishing, etc.
28. JDS Consulting – 2018 28
Once the island is established as a desirable tourist destination, other forms of permanent
accommodations with increased air access naturally follow. There are several recent
developments that Chuuk may be able to capitalize on to establish itself as part of a regular
cruise itinerary.
Growth of the Chinese Cruise Market
According to a May 15, 2017 article in Bloomberg (“Cruises Boom as Millions of Chinese Take to
the Seas”): There were 2 million cruise passengers from China in 2016. Passengers from China
are set to double to 4.5 million by 2020. All the large international cruise companies are
pursuing this large and lucrative market.
Moreover, in 2017, China entered the cruise ship construction business and began building
cruise ships designed for the requirements of the Chinese market: Chinese kitchens, suites for
families traveling together, Chinese style entertainment and larger casinos.
Korea’s Jeju Island is a popular destination for cruises from Shanghai and North China, but this
faces political risk as when travel was curtailed by the Chinese government during the standoff
between the US and North Korea. Similarly, the relationship between China and Japan, the
Philippines, Vietnam and the US (Guam and Saipan) have at times been strained.
Micronesia, including Chuuk, appears to be a viable alternative itinerary. Vessels could depart
from China, Saipan, or even be home-ported in Chuuk.
Cruise Ships from Australia
Australia already has a developed cruise industry with ships traveling north to Pacific islands,
including to the Solomon Islands and islands of Papua New Guinea, just south of Chuuk. These
voyages might be extended to include Chuuk on the itinerary.
Cruise Ships from Guam and Saipan
In 2011, the Micronesian Cruise Association (MCA), a non-profit, non-stock membership
organization was established to develop sustainable emerging visitor market segment and
cultivate incremental economic activity servicing cruise ships throughout the Micronesian
region. Monte Mesa, general manager, Guam Premium Outlets, was appointed as the
Association’s interim president and director. There are currently 13-members of the MCA
including PATA Micronesia; Yap Visitors Bureau; Pacific Islands Small Business Development
Centre (SBDC); Micronesian Divers Association; Guam Publications Inc; Palau Visitors Bureau;
Marshall Islands Visitors Bureau; Advance Management Inc and the Guam Visitors Bureau.
On February 9, 2018, Guam’s Governor Calvo signed Public Law 34-75 which directs the Guam
Visitor’s Bureau to develop and publish, within 60 days, a request for information on
29. JDS Consulting – 2018 29
developing a cruise ship industry on Guam. The plan would be for cruise ships to be
homeported on Guam and traverse throughout Micronesia. A stop (or origination) in Saipan
would allow the cruises to take advantage of the CNMI’s Chinese VISA waiver and low cost
flights to tap into the Chinese market.
Opportunity for Chuuk: Work with 1) the MCA, 2) Chinese cruise companies and 3) the
companies cruising from Australia to establish a Micronesian cruise itinerary that includes
Chuuk while developing Chuuk as an attractive tourist destination.
Airlines
Attracting air connections to Chuuk from target markets will be critical to developing Chuuk’s
tourist economy.
Chuuk currently is served by United Airlines via the “Island Hopper”—One day from Guam to
Chuuk (and then onto Pohnpei, Kosrae, Kwajalein, Majuro and Honolulu) the next day the
opposite direction from Honolulu through the islands to Chuuk and then onto Guam.
Also, Air Niugini has a flight to Chuuk from Port Moresby, Papua New Guinea, where they
connect with Tokyo, Hong Kong, Brisbane and Sydney, among other locations.
As discussed earlier, Palau currently receives charter flights from China, but they are being
restricted by Palau’s government, making them the prime target for Chuuk to develop tourism
from China.
For scheduled flights, one of the many Asian budget airlines that fly to Guam and Saipan would
be a most welcome addition: Cebu Pacific (Philippines), HK (Hong Kong, China), Jin Air, Busan
Air, Jeju Air, or T’way ( all Korea) might fly direct to Chuuk from Asia or as a continuation on a
flight to Guam.
Opportunities for Chuuk: 1) Work with Chinese tour operators for charter flights from China to
Chuuk (once suitable locations for accommodations can be secured), 2) Work with the many
airlines flying to Guam from Asia to see if they can extend one of their flights to Chuuk.
ACCOMMODATIONS
Chuuk’s current visitor accommodations consists of the two small dive oriented resorts: Blue
Lagoon and Truk Stop, other small hotels and two live-aboards, the Truk Odyssey and SS
Thorfinn--these are well-suited for the more adventurous wreck diving crowd they serve.
Traditional large resort hotels are probably not well suited to the main populated islands due to
the need to acquire large amounts of land, land title issues, lack of infrastructure, lack of sandy
beaches, and issues around cultural acceptance and integration.
30. JDS Consulting – 2018 30
One solution, already discussed, is development of Chuuk as part of a regular cruise ship
itinerary. However, this is where Chuuk’s geography, with a dispersed population, but still
maintaining many uninhabited small islands, reefs and shoals, can be used to its advantage.
Tourist developments can be located on land (or sea) controlled by the government, away from
main population centers.
For example, in the Maldives, a majority Muslim nation in the Indian Ocean consisting of over
26 atolls with more than 1,100 islands, the local population lives on 185 islands while the other
islands are used for business purposes, mostly tourism developments. Boats from the docks at
the airport depart directly for the resort islands. Visitors from Europe can enjoy themselves at
the resorts according to European cultural norms and minimize potential conflict with local
norms. Similarly, other resorts in the Maldives cater to Chinese visitors and their tastes and
standards. Nearly 1.4 million tourists visited the Maldives in 2017 and the government for over
400,000 people is 90% funded by tourism proceeds.
Thus, Chuuk can follow many of the best practices of similarly situated islands around the world
for developing its tourism infrastructure: cruise ships, exclusive resort islands, over water
bungalows, floating resorts and even under-water resorts.
Over-Water Bungalows/Villas
First introduced in Bora Bora, French Polynesia 51 years ago in 1967, over-water bungalows are
very popular with tourists worldwide with demand outpacing supply (currently numbering
8,000 worldwide), and would appear to be well suited for Chuuk Lagoon or the outer atolls.
31. JDS Consulting – 2018 31
Moreover, over-water bungalows or villas solve several problems:
Land scarcity and land ownership issues (though in Chuuk, the shallow lagoon areas can
have similar ownership issues).
Shortage of sandy beaches for access to deeper water for swimming, snorkeling,
boating, etc.
They can be sited on more remote areas where issues of cultural acceptance are less of
an issue.
32. JDS Consulting – 2018 32
Over-water bungalows rent for $500 to as much as $1,750 per night. 100 bungalows charging
$1,000 a night with 80% occupancy would generate $2.9 million in hotel occupancy taxes alone.
Moreover, if shallow water locations are found that are not privately owned, the land/water
lease payments can be made directly to the government of Chuuk.
Opportunity for Chuuk: Work with developers to find suitable locations for developments of
overwater bungalow resorts.
Small Cruise Ships and Live-Aboard Vessels
Chuuk currently has two live-aboard vessels, the Truk Odyssey and the SS Thorfinn. Both cater
to wreck divers, traveling throughout the lagoon to different dive locations. As multiple islands
throughout Chuuk become seen as tourist destinations, more live-aboard vessels, or even small
cruise ships, might be home-ported in Chuuk. These ships would cater to a more traditional
cruise customer traveling through the islands.
33. JDS Consulting – 2018 33
Artificial Islands or Floating Resorts
In parts of the world, such as the Mediterranean and Persian Gulf, resorts have been built on
artificial islands or artificial extensions of naturally occurring small islands. Similarly, China has
been building artificial islands on reefs and shoals in the South China Sea (though for
military/strategic purposes, not vacation resorts). This might be an option in Chuuk, whereby
land ownership issues could be avoided and any lease payments would go directly to the
government.
Similarly, in some locations, floating resorts have been anchored in place in protected waters,
which also avoids land ownership issues and avoids the environmental concerns caused by
artificial island construction. For example, an entire resort might be built in China and then
towed and anchored in Chuuk Lagoon.
All these would avoid some of the issues around land ownership in Chuuk, have minimal
negative impact on existing infrastructure, would make annual payments directly to the Chuuk
government and could be very attractive to investors.
Underwater Resorts
In a few locations around the world, resorts have been built all or partially under water. A
resort of this type would be a natural for Chuuk lagoon and would put it on the map, attracting
international attention. Again, this would also be a way to avoid land ownership issues.
34. JDS Consulting – 2018 34
Eco-Tourism—Traditional Arts and Culture—Tourism Villages
Many of Chuuk’s islands, especially outside the lagoon, still retain a traditional way of life that
has disappeared elsewhere. Visiting these places has great appeal for many around the world.
Under this model, an outer island village would agree to host visitors who stay in traditional
housing. Traditional Micronesian shipbuilding, seafaring and navigation, art, music and dance
would be shared.
VISITOR ACTIVITIES AND ATTRACTIONS
To expand Chuuk’s appeal beyond wreck diving, Chuuk will need to offer more activities and
attractions. This will be critical for attracting cruise ships or larger resorts.
For scuba divers, Chuuk could also emphasize the natural beauty of the lagoon as well the
wrecks. In some places around the world, underwater art galleries attract divers. Such an
exhibit in Chuuk could be co-sponsored by the government of Japan as a peace memorial.
Beach clubs could offer: Snorkeling, Sailing—sailboat rental, Para-sailing, Surfing, Kite surfing,
Paddle boarding, Jet ski rentals/tours.
Other activities include: deep sea fishing, outrigger canoe sailing and navigation, hiking.
Tourist villages could offer arts and crafts, traditional cultural performances such as dance,
music and food.
35. JDS Consulting – 2018 35
However, one of the best additions would be Atlantis Submarine, a company that operates in
Hawaii, Guam and other islands. Their submarines could open up Chuuk’s famous wrecks and
beautiful lagoon to a much wider audience.
AQUACULTURE—FISH FARMS, SHRIMP FARMS, PEARL OYSTER FARMS, ETC.
WHY: To generate foreign income to replace lost grant funding
o Develop large scale fish farming for Export – CO-OP model
o Agriculture development: Breadfruit, coconut, kava, noni
IMPORT SUBSTITUTION as a means to develop internal market economy. Chuuk is an aid
dependent country, to spend less on imports will contribute to economic sustainability. To
produce more locally will reduce dependence of foreign aid. Opportunities include:
36. JDS Consulting – 2018 36
o Working with International Partners (EU, Global Climate Fund) replacing
petroleum products with solar / biofuels
o Improving healthcare outcomes. Aggressively address the threat of non-
communicable diseases, by implementing wellness education. Tax on imports of
processed foods and beverages, alcohol and tobacco products.
HEALTH CARE SPENDING – Identify drivers of high medical costs and mitigate risks to
reduce healthcare spending
o Working with the Health Sector to develop medical cost analytics to identify
drivers of high cost medical care. Perform analysis of medical cost categories
and utilization.
o Identifying and segmenting and risk groups and behaviors. Identify patients with
chronic disease and manage and implement disease management programs
o Engage citizens to take accountability for health by promotion of wellness
education programs and tools designed to provide engagement incentives to
modify unhealthy behaviors
CONCLUSIONS
Understanding the current FSM and Chuuk State economic drivers is key to
developing and achieving economic growth and sustainability.
Opportunity exists to maximize infrastructure development projects to support the
environment, business development and private investment.
Beginning in 2024, the fiscal health of Chuuk as a state in the FSM would largely
depend on the willingness of the FSM National Government to share revenues
(especially Fishing Fees) with the states. Alternatively, the fiscal health of Chuuk as
independent republic would largely depend on Chuuk’s ability to negotiate for a
share of the Compact Trust Fund, negotiate Fishing Fees, and obtain other
revenues.
Many of Chuuk’s long-term opportunities for economic development can be
pursued regardless of Chuuk’s political status.
38. JDS Consulting – 2018 38
References
Statistical data was reviewed and analyzed based on information available from the following
sources:
(1) Graduate School USA: FSM FY2016 Statistical Appendicies
(2) US: USCOMPACT.Org FSM Documents (JEMCO reports)
(3) (4) FSM: FY2016 Economic Brief
(5) FSM and Japan Sign New Ten Year Fishing Agreement Press Release -
(http://www.norma.fm)
(6) Trust Fund for the Federated States of Micronesia – Public Information Office Press
Release #1702-02
(7) The Federated State of Micronesia – EU National Indicative Programme for the period
2014 to 2020
(8) FSMC, TITLE 55. GOVERNMENT FINANCE & CONTRACTS - Chapter 12: FSM Trust Fund
(9) FSM: Fiscal Year 2016 Annual Report
(10) Federate States of Micronesia: Public Expenditure Analysis
Resources:
http://data.bls.gov/cgi-bin/surveymost
www.cbo.gov/publication/49892
http://www.bea.gov/national/index.htm#gdp
www.cbo.gov/publication/49892
http://www.worldbank.org/prospects/commodities