Government of the Federated States of Micronesia

EPIC resolutions preface amended Compact's implementation

Palikir, POHNPEI (FSM Information Services): June 4, 2004 - The 10th meeting of the Federated States of Micronesia Economic Policy Implementation Council (EPIC) concluded on May 26 2004, with nine resolutions.

Resolution 1, addressed the Trust Fund requirements. The amended Compact called for the FSM, through its agreed $30 million contribution, to establish a Trust Fund by September 30 2004, in order to begin the 20-year term contribution by the United States.

The EPIC authorized the preparation of a Memorandum of Understanding to be signed by all five governments setting forth in detail the understanding of the requirements. The Council also set a deadline of August 31 for the state's pledged amounts to be deposited into the Fund.

Resolution 2, referenced the Supplemental Education Grant which has substituted the Federal Programs in the amended Compact. The EPIC requests the National Government to prepare the plan for the use of supplemental education grants for fiscal year 2005.

The Council further directs the state apportionment of the SEG to remain the same except for Kosrae and Pohnpei, which should reflect and adjustment for the Head Start program. With further request to revisit issue of apportionment -

In Resolution 3, addressed the venue of the 2005 FSM games. In accordance with the game's scheduled rotation, the 2005 games would be hosted by the State of Chuuk. The EPIC requested the State to report its ability and readiness to host the games by September 30 in order to solidify the game venue. Should the State report otherwise, an alternative venue would then be considered.

Resolution 4, expressed the EPIC's support of the compliance terms set by the Asian Development Bank's for its loan project extended to the FSM for the development of the private sector. The Private Sector Development (PSD) loan project consists of several funding tranches. These tranches are availed upon the states meeting certain prerequisites.

The EPIC encourages the Governments of Pohnpei, Chuuk and Yap to submit to the National Government their plans regarding the use of the proceeds of the first tranche of the loan. The Government of Kosrae already submitted its plans. In addition, the EPIC encouraged the five governments to identify public entities in each ones jurisdiction for privatization and proceed with necessary steps.

Resolution 5, encouraged the approval of the Omnibus Infrastructure Development (OID) loan project offered to the states by the Asian Development Bank. All the states' have agreed to ADB's loan terms with the exception of Chuuk.

The EPIC encouraged the other states to concurrently move ahead with the ADB appraisal in their states while the ADB and Chuuk resolve their differences. In addition, the Council requested Congressional approval of the loan with the hope that eventually, all four states would participate in the project.

Resolution 6, expressed EPIC's support for a proposal by the College of Micronesia - FSM to encourage the states' provisions of financial assistance to the College. The National Government previously had sole responsibility of FSM's support to the College, but with the National Government's share reduced under the amended Compact, the responsibility is meted out among the governments.

Resolution 7, requested further negotiation of the FSM's fuel supply contract with Mobil. The EPIC directed the formation of a high-level negotiation team to facilitate the negotiations.

In Resolution 8, the EPIC called for a comprehensive investigation of nuclear testing damages or fall-outs effects to FSM citizens from the Nuclear Testing program conducted in the Marshall Islands by the United States during the mid 1940s' through the late 1950s'.

The Council further requested report of the findings to be disseminated to the Leadership of the FSM.

Finally, through Resolution 9, the EPIC called for the establishment of a permanent and fully operational weather station on Kosrae.

The Council was created in June 2000, to forward FSM's economic reform agenda by focusing on key economic policies that will affect the immediate and future economic growth prospects of the nation.

The EPIC membership is comprised of the Leadership of the five Governments. The FSM Department of Economic Affairs serves as the Secretariat for the Council.

For further information on this release, please contact:

FSM Office of the President
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P.O Box 34
Palikir Station, Pohnpei, FM 96941
Tel.: (691) 320-2548/2092
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