Federated States of Micronesia and ADB
In the Spotlight
Growth in the North Pacific is expected to rise in the near term due to favorable external conditions, stimulus from infrastructure projects, and continued tourism growth in Palau, says a new report from ADB.
ADB-wide sovereign approvals in the Pacific has risen substantially since 2010, reaching almost $1.8 billion in 2013. ADB is assessing and updating the Pacific Approach, which will continue to guide its operations in the region.
The government and the people of the Federated States of Micronesia (FSM) have been working with ADB since 1990. The FSM has achieved important development gains since it become a full-fledged member of the United Nations in 1991. ADB has helped the government build the foundations of this reform.
Despite robust growth of the fishery sector, the economy of the Federated States of Micronesia (FSM) has stagnated for many years, with private sector activities unable to offset a decline in public investment, which has resulted from the reduction in grants from the Compact of Free Association with the United States (the Compact). Critical importance has been placed on developing the FSM’s private sector, and achieving medium-term fiscal sustainability, to ensure sufficient resources are available to prepare for the planned expiration of Compact grants in the financial year 2023.
The government formulated its ongoing development framework in 2012. It highlights the importance of having ownership of the development process at the national and state levels, accompanied by well-coordinated, sector-based support from development partners. ADB continues to support this initiative in close coordination with other partners.