Government of the Federated States of Micronesia

President praises Chuuk Leadership for reform measures

WENO, Chuuk (FSM Information Service): June 28, 2002 - On June 24 2002, President Leo A. Falcam, met with the leadership of Chuuk State before embarking on his weeklong visit to State's Northwest region.

President Falcam congratulated the State's leaders for implementing in full the reform measures specified in a Memorandum of Understanding between the national and state governments. That MOU was signed June 10th during the President's last visit to the FSM's most populous state.

Based on the state's implementation of reform measures that had been recommended by a joint financial stabilization task force and following ratification by the Chuuk State Senate, the President confirmed that the MOU has been made fully effective. He indicated that the commitments of the national government to release additional Compact Capital Improvement Project (CIP) funds and to support the state's financial management efforts to ensure full and timely pay to all state employees is well underway.

Necessary administrative support and technical assistance to be provided by or through the national government is moving forward. The President expressed his gratitude that, due to the clear demonstration of commitment by the state's executive and legislative branches, Chuuk State is now clearly on the path to financial recovery.

President Falcam also encouraged the Governor of Chuuk, Dr. Ansito Walter, to alert the State's municipal leaders that an additional $5 million of CIP funds, of which nearly 80 percent is targeted for municipality-based economic development projects, is available by Presidential directive as of June 24, 2002.

The President also shared a copy of a bill he had transmitted on the same day to the Congress of the FSM for the appropriation of nearly $1 million to support repayment of Chuuk State obligations. This special appropriation bill was drafted pursuant to an undertaking of the national government in the June 10th MOU. The specific amount corresponds to the amount the state had earlier agreed to pay to the national government for overdue tax penalties and interest.

President Falcam also indicated that during his visit to the Northwest region he may need to describe to the leaders of that region's 14 municipalities some of the underlying reasons for the placing of the freeze on CIP project implementation; however, he also indicated that he would focus much more on the State leadership's collective demonstration of commitment to resolve the ongoing financial challenge.

The President noted that there is reason for optimism and there remain significant resources available to the municipalities of all five of the state's regions to accelerate economic development.

For further information on this release, please contact:

FSM Office of the President
Public Information: Press, Radio, Video
P.O Box 34
Palikir Station, Pohnpei, FM 96941
Tel.: (691) 320-2548/2092
Fax.: (691) 320-4356