MOU outlines the Chuuk financial reform plan
Palikir, POHNPEI(Office of the Chief of Staff): July 27, 2007 - FSM President Mori and top leaders of Chuuk State have recently executed a Memorandum of Understanding (MOU) that sets forth reform measures or ways of helping Chuuk State with its financial crisis.
The MOU was signed at the Cliff Rainbow Hotel at the end of two days of final negotiations and before the Chuuk State leaders were to return home after participating in the National Inauguration ceremonies in mid July, 2007.
Signing on behalf of Chuuk State were: Governor Wesly Simina, Chuuk House of Representatives Speaker, Singkoro Harper and Chuuk State Senate Floor Leader, Alanso Cholymay and accompanied by their staff: the Chuuk State Attorney General; the Director of Finance and Administration and the Legislative Counsel. Also signing as part of the Chuuk State leadership was Chairman of Chuuk Congressional Delegation, Mr Roosevelt Kansou.
The MOU acknowledges first of all that Chuuk State's overall debt portfolio is around 46 millions. Four millions ($4 millions) of the $46 millions are considered short term loans that need to be paid off within the next six months to one year period; $7 millions are considered medium term loans that need to be paid off within one year to three years. Among the reform measures agreed upon in the MOU were:
A. For Chuuk State to:
In addition, there were other measures that both Chuuk State and the FSM National Government committed themselves to doing jointly. They include joint pursuit of outside financial and technical assistance to help the state's problems, strengthening of tax administration to improve revenue collection, and the immediate allocation of Chuuk's 20% revenue sharing balance from fiscal years, 2002 and 2003.
In submitting an original set of the MOU to FSM Speaker Isac Figir, President Mori's cover letter stated:
"[...] I want to impress upon you and the Congress that in due time, I will be coming to the Congress for support as it is apparent that the gravity of Chuuk's problems do pose potentially disrupting effects both on the National Government's operational capability and on the Nation's long-term financial and economic wellbeing. As you go through the MOU and its supporting tables and matrix, you will find that a significant part of Chuuk State's debt portfolio is urgently due and owing to different agencies of the National Government, including the FSM Social Security Administration and the FSM Department of Finance and Administration Customs and Tax Administration. I am sorry to say that Chuuk's financial problem is indeed a FSM problem, requiring our joint effort and resolution [...]"
The Chuuk State leadership has reportedly begun implementation steps for some of their obligations under the MOU.
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 e-mail: email@example.com http://www.fsmpio.fm/