Government of the Federated States of Micronesia

President Mori's State of the Nation Address

Palikir, May 14, 2009


Ach tirow me fairo mi fiti ennetin soufon me mennin ngeni Samach Kot mi napanap non neng. Puan ai kapong en puwapwa ngeni kemi ekei mi nonom non ei Congress Chamber me atongech chon FSM meinsin fitikich ne rorongorong ngeni ach ei program won asepwan.

Please allow me to pay my personal respects and courtesies to our traditional leaders throughout the Federation, especially to the Mwoalen Wahu en Pohnpei, the host state of our nation's capitol.

Ran anaim ngeni kemi chon ach ei Nation akaewin ngeni kemi atongach chon Chuuk meinisin.

Speaker Figir and Honorable Members of the 16th Congress of the FSM
Vice President Alik
Chief Justice Amaraich and Associate Justices of the FSM Supreme Court
Dean and Members of the Diplomatic Corps
Governors, Speakers and Justices of the States
National and State Officials
Members of the Clergy, Private Sector, and Civil Society
Families and friends, and my fellow citizens


Good Morning Ladies and Gentlemen. On the occasion of my Second State of the Nation Address, I would ask you to join me in recognizing the 30th anniversary of our National Constitution. With the completion of this Constitution, on May 10, 1979, our forefathers, our people and our States realized a vision of a common commitment -- And after centuries of dependence and separation, we chose to move forward, towards a brighter independent future.

Today, as I stand before you, with a sense of humility and gratitude, I also feel proud and elated at the same time. It is fitting therefore that I congratulate all of you; the people of our four states and past and current leaders for staying the course. While our voyage is still in its early phases, the course of our journey has already been set. And while our journey may face strong winds and dangerous seas, we can and we will survive together.

I would therefore ask that we rededicate ourselves to realizing our original dreams and expectations. This will not be an easy task and will require our greatest collective efforts.

There are many external development partners, some who are here with us today, that I would like to recognize. First, I must thank the United States, a country that has stood with us for over half a century in our quest for a better life for our people.

We are likewise grateful to our other major development partners -- Japan, the People's Republic of China, the European Union and Australia -- for their valuable contributions to our sustainable development.

Similarly, we extend our gratitude to the many international and regional organizations, including a multitude of NGO's, that are working with us on our difficult job of nation-building.

We are also very fortunate to have close island neighbors and friends -- Guam, the CNMI, Palau and the Marshall Islands -- with whom we continue to maintain close relations. We thank you for all your partnership in our common approach to sustainable development in our region.

With so many of our young people serving in the United States armed forces around the world, most particularly in Iraq and Afghanistan, we must all offer a debt of gratitude for their sacrifices for our country and world peace. My own daughter and Vice-President Alik's son are currently serving in the United States armed forces. Let's remember them all in our prayers.

My dear Citizens, before I present this year's State of the Nation Address, I must commend the members of our Congress and the leaders of our state governments, present and past, for their dedication and hard work towards the original goals of our Federation. I would also like to offer my personal thanks to the Congress and the state leadership for supporting this administration in moving forward with its sustainable development agenda. Any accomplishment of this Administration is a shared accomplishment with the Congress and the State leaders.

State of the Nation

Ladies and Gentlemen, a review of the State of our Nation must first take into account the global economic crisis that has reached our shore. Like our major international and regional partners, we too are experiencing the adverse impacts of this economic turmoil. This international financial melt-down, in conjunction with an earlier fuel crisis and a continuing food crisis, has placed our Federation in a state of economic crisis. In addition, climate change has continued to threaten food security and our very existence.

This global recession is intensified by our own national recession, which has been on-going since 2005. The average income of our people has steadily declined during this period, from $1,934 per person in 2005 to $1,832, in 2007. This figure is an indication of not only lower wages, but also of lost jobs. While figures are not yet final, it is projected that this economic crisis will continue this year and into the near future.

These recessions have left our country with unprecedented financial challenges. For example, the FSM Compact Trust Fund has lost a staggering $22.8 million in 2008. Partially as a result of the financial turmoil, the Social Security System's underfunded liability has increased dramatically.

Likewise, our Mi-Care Health Care Plan has continued to operate in deficit. Both of these mandated National Government responsibilities will require immediate attention and significant capital infusion to survive in the coming years. I respectfully ask Congress to approve our request for funding of these two very important programs in the Fiscal Year 2010 budget.

In addition, the banking sector has shown an overall slowdown in commercial lending and a reduction in consumer spending. In 2008, consumer loans decreased by $1.3 million and development bank loans decreased by $1.5 million. These trends are likely to continue.

Sadly, no citizen has been left untouched by this current global crisis. And there are no quick and easy fixes to the recession plaguing our economy. Indeed, it is likely to get worse before it gets better.

My fellow citizens, we now face a financial storm of unparalled magnitude. It is therefore imperative that we examine and improve upon all existing opportunities, both internal and external, as envisioned under our strategic development plan, to enable us to respond to this crisis today and in the future.

Responses to Crisis

From day one, in partnership with the FSM Congress and the State Governments, this Administration has been working to respond to this growing crisis and to build a bridge to a better economy. I will cite some of these action-oriented responses in this Address. Our strategy is, and shall continue to be, broad-based and focused on measures that have an immediate impact on our economy and that lay a strong foundation for long-term sustainable economic growth and development.

Infrastructure Development

During this past year we have made great strides in freeing up available funding to implement infrastructure projects in our states that have sat idle since 2004. All told, this represents more than $144 million worth of infrastructure project, including $7 million dollars worth of completed projects, $37 million more projects currently under construction, $46 million worth of projects in the design phase and $54 million in projects pending task orders for design work.

In United States Federal Aviation Administration funded projects under the FSM-Airport Improvement Projects are already underway in all the four states. With the generous assistance of approximately $30 million from Japan, we are also lengthening the Pohnpei International Airport runway to allow wide-bodied aircraft to land, thereby providing increased opportunities for tourism, fisheries and agricultural expansion.

Furthermore, matching funds for each state's Omnibus Infrastructure Development Projects loan have been secured from Compact Infrastructure Sector Grants. This will result in more than $8 million dollars worth of additional infrastructure projects in our four states.

These projects represent the largest outlay of money in the history of our nation. In fact, it is projected that these construction projects will result in the creation of at least 1,000 jobs and new income of approximately $65 million. (Applause pause) Due to the great significance of these projects to the welfare of our people, they will require the continued personal attention of this Administration.

Continuing to Reform the National Government

Beginning in 2007, this administration has worked with our Congress to reorganize the Executive Branch in order to streamline functions and to bring about efficiency. At this juncture, allow me to thank my Cabinet and staff for the sacrifices they have made during these many years of reform. I commend all of you for your diligence, dedication, and efficient performance of your duties. Most of all I thank you for your hard work.

We are committed to continuing this effort to make further improvements to our governmental structures over the next two years. Down-sizing the government is very difficult indeed, yet it must be undertaken in order to gain efficiency, reduce costs and channel funding resources to priority programs that our citizens desperately need. We must strive to live within our means while we also develop the private sector and create jobs.

In the context of this government reform, the Administration has worked, and will continue to work, to revamp policies to redesign public sector investment, especially in Education, where we spend more than 30% of our total state and national revenues. To date, we surely have not made the required advances in education to ensure jobs for our youth in the future. In fact, in some areas, we have backtracked. To progress, we must immediately work to establish the groundwork for future improvement. And let us do so in full recognition that education is a joint responsibility between the state and national governments -- let us all do our part.

This administration will continue to take the necessary steps within our areas of responsibility: setting standards, teacher certification, providing classrooms, and working with the states across our nation. And we urge the State Governments to undertake their respective responsibilities in providing good quality education to our children.

In line with this commitment, we have embarked on a "Bridging Gaps School Partnership Project" initiative to shape a new educational future. We are also well on the way to developing a comprehensive strategic plan to work with each state and the United States Government to streamline primary and secondary education programs, defer low-priority projects, institute better cost recovery and improve evaluation capacity and performance. We have partnered with other educational institutions to extend college degrees from two to four years.

To help fund this effort, I am seeking approval of Congress for an additional $350,000 scholarship fund in the 2010 budget. In this context, we will continue to work to convert COM into a four-year institution.

I must also congratulate the Congress for passing a law to amend the Constitution to extend the terms of Two-Year Congressmen to four years. This will allow our leaders to focus on longer term issues of nation building and will allow us to cut election costs. I would ask that the people support this proposed constitutional amendment through their votes in the coming 2011 election.

State Government Reform

I am pleased to note that Kosrae State has balanced its budget in 2009. In Chuuk, reform has resulted in a budget surplus in 2009 and we expect another budget surplus again in 2010 and a continued reduction in its overall debt. We urge both Chuuk and Kosrae to stay the course and complete these necessary budgetary reforms within the next twelve months. We will continue to remind Chuuk of their commitment to reduce their legislature into a single house as part of the needed structural reform.

We must give credit where credit is due and congratulate Yap and Pohnpei States for their on-going efforts to maintain their economic stability. We urge them to remain on this commendable and sustainable course.

In this connection, with the help of the National Government, I am happy to mention that a new Uniform Financial Management Information System is now working well in all four states. This should serve to improve the strategic planning, reporting and financial management at all levels of government.

Energy Reform

In 2008, before the international financial crisis, our primary financial concern was the increase in energy costs. As you will recall, FSM residents in state capitals were paying over $6.00 per gallon at the pump, while in the outer islands they were paying more than $7.00 per gallon. Although fuel prices have recently lowered, we can assume they will once again increase as international markets recover. We must therefore continue to take the needed steps to ensure an affordable and renewable energy future.

To respond to this reality, we initiated a clean energy package to provide affordable renewable energy sources and also to ensure a cleaner environmental future in the FSM and throughout the world. Our National and State Governments also created the FSM Petroleum Corporation to work together to enable us to buy cheaper fuel. In addition, the Chief Executive Committee mandated the Department of Resources and Development to develop an energy policy that will pave the way to an environmentally friendly and sustainable approach to meeting our energy needs. The policy should be adopted and implemented shortly.


In March of 2010, we can look forward to a very significant national milestone, the global connection of Pohnpei State to a submarine fiber optic cable. Upon assuming this Office, I have made the completion of this project one of my highest priorities. As we look forward to this connection, and the economic door of opportunities that it will open, we are conscious of the need to connect all four FSM States to the cable and allow the benefits to flow to all four States.

2010 Budget

The FY 2010 proposed budget that I just submitted to Congress is one of restraint and is in line with our initiatives to transition from past years of budgetary growth towards a precautionary approach during this period of recession. Given these uncertainties, the Administration has wrestled with the challenge of addressing increasing needs with rapidly dwindling resources.

This budget lays out our plan to meet this challenge -- fulfilling our obligation to maintain a balanced budget while striving to protect the most important functions of government and minimizing harmful impacts on our citizens.

Our ultimate objective is to stabilize the economy and continue to develop our economic base to ensure sustainability and greater self-reliance over the long-haul. We will continue to reform the current budget format to ensure that all proposed expenditures are relevant to priority development areas as identified in the FSM Strategic Development Plan. One of our priorities has been to build a strategic map for our government to meeting the aspirations of our citizens.

I seek the cooperation of Congress on these principles of allocation of financial resources set out in my 2010 budget request to ensure that we stay the course of our sustainable development agenda. I also call on the Executive and Legislative Branches of our state governments to take a similar judicious approach to budget allocation and prioritization.

Moving Forward

My friends and fellow citizens, in moving forward, let us be reminded that we have rough seas ahead of us. With that in mind, we must carefully consider the best approach towards a successful reform. For the Executive Branch, we believe that success must begin with 'good governance', a government system that is fair, accountable, efficient, transparent and well planned. To achieve this goal, we must establish appropriate criteria and measurements of our overall performance. While achieving good governance will be difficult, we believe that it is our country's only course for success.

Tax Reform

For our broad reforms to bear long-term impacts we must finalize our proposed tax reform and improve collections and distribution at both the state and national levels. This reform should equalize our tax burdens. This should result in tilting revenue streams in favor of the states and result in long-term beneficial impacts for our people.

I am committing this Administration to work closely with state and Congressional leaders to have the necessary enabling legislation passed by the end of the year, at the latest. It is high time that we have this new tax system in place so that our people and businesses can enjoy the resulting benefits.

Strengthen Business Environment

My friends, it is also time to tackle the difficult problem of business development through a comprehensive approach. As a nation, and as individual states, we must create domestic opportunities for our people to stem the current brain-drain and shore up the necessary human capital for nation-building. To accomplish this, I will continue to work toward expanding vocational education in the FSM and the ultimate transformation of the College of Micronesia-FSM into a four-year institution.

In addition, we must, as a nation, and as individual states, recognize the need for the injection of foreign investment dollars. For this to happen, we must all improve our foreign investment laws and regulations. The framework that we develop can both protect our local businesses and allow for their growth with new partners from abroad. This will only occur if all of our states join together with the national government to create an environment that is conducive for investment.

Reduction in the Government Workforce

With a strengthened business environment, the nation will be able to move forward with the very real need to reduce its government workforce. Expanding business capacity and reducing the government workforce must go hand-in-hand. The current recession requires that we continue to work towards right-sizing our governments at both the national and state levels. We must not forget, however, that this effort must be accompanied by government sponsored initiatives that focus on employee retraining and private sector opportunities.

Education and Health

While modest improvements have been made in the areas of health and education, we have not achieved a record of steady and sustainable progress. In both sectors, many of our challenges can be met through the support of improved facilities, better and increased numbers of licensed, trained staff and further collaboration with the state governments who are at the forefront of these responsibilities.

In the area of health, it is crucial that we advance our experience-sharing and partnership with other hospitals in our region to respond to expanding health threats. And in education, I encourage parents to be more personally involved in the education of their children. Our young people are a primary resource of our nation and have a critical role to play in our island communities. This involvement does not stop at the family level, but must include a more proactive and focused approach from all stakeholders - government, traditional and community leaders, civil societies, churches and, of course, the youth themselves.

Food Prices

On the domestic front, we must also recognize that food prices are no longer affordable to a large segment of our population. I realize that these higher food prices are hitting us where it hurts. We must therefore take whatever actions necessary to reduce these costs, both in the short and long-term. We must respond to this reality through the stimulation of competition in the market place and in the development of healthy and affordable domestic food products. Let us focus on increasing the use of local foods as a step in the right direction to food security. It is a healthy step.

Agriculture and Aquaculture Opportunities

We must also do a much better job in taking advantage of the market opportunities for our own domestic agriculture and aquaculture products in the Micronesian region, especially taking into account the expansion of the economy in Guam due to the coming United States military buildup. To assist our people in this area, I will continue to work diligently to remove trade barriers in the region, and eliminate unnecessary import and export requirements on agriculture and aquaculture products.


Turning to an important area, I would like to underscore the importance of integrating environment in our social and economic development planning, as it is one of the critical pillars of sustainable development. Environment must underpin all our planning and implementation strategies. In this way, we will be promoting a holistic and coherent approach to sustainable development efforts across our islands.

In this connection I am pleased to note the proactive participation of our government in the ongoing international negotiations on replacement for expiring provisions of the Kyoto Protocol that address climate change. There is no doubt that climate change is the single most serious threat to our islands and our very existence.

I therefore call on all governments and civil society to redouble their effort in climate change adaptation.

I also urge Congress and state governments to unite with the Administration in implementing the Micronesia Challenge, a sub-regional initiative to conserve and protect our valuable natural heritage -- our environment. The potential of this initiative to leverage external assistance is enormous.

On this note, I must commend the people from the Office of Environment and Emergency Management and, most notably, the FSM Permanent Mission to the UN, on their work that earned the FSM a 2009 Climate Protection Award from the United States Environmental Protection Agency for outstanding contribution to climate protection under the Montreal Protocol ozone treaty. This is a major accomplishment in the International community, and we should be proud that the FSM is setting a good example for the rest of the world.


As part of our sustainable development strategy, we must recognize the importance of the cultural identity of our people. Within this context, we must recognize the need to develop cultural industries and initiatives that present significant economic opportunities for national development. These industries have the potential to expand and diversify our economy and develop resilience against external economic shocks. To help move us in this direction, I therefore seek Congressional support in funding the architectural design of the multi-purpose building that will house our National Museum.

Five Year Compact Review

In regard to our on-going relations with the United States, about a year ago, this administration initiated our government's preparations to be able to have meaningful inputs into the Five-Year Review of the Amended Compact by the United States Executive Branch, as required under the Amended Compact Act. This is an opportunity made possible through the wisdom of the United States Congress to examine, every five years, how the amended Compact may be improved to help the FSM achieve the overall objective of self-reliance.

We look forward to a productive working relationship with the United States Executive Branch in this regard, and ultimately with the United States Congress, to consider positive adjustments to the agreement that defines our important relationship. This review could not have been timelier, when the FSM faces so many challenges to its sustainability brought about by the global financial crisis and climate change, among others.

International Initiatives

It is imperative that we continue to strengthen our international relations and outreach, especially on issues that have unique and significant impacts on our nation and our people.

It is also critical that we move quickly forward with the comprehensive reform of our passport system to best serve our citizens traveling and living abroad and to insure the receipt of secure documents in a timely manner. This reform must be completed this year.

In the interest of time, allow me to highlight just a few of our international opportunities. In response to the growing needs of our citizens residing in the United States and its territories, our missions and offices in the United States have been actively engaged and successful in our Citizens Outreach Advocacy Program in Guam and Hawaii. This program will be expanded to other locations in the United States mainland with large populations of our citizens. It is our hope that this program will not only ease and lessen the burden of culture shock to our citizens, but also further strengthen the relationship that our two peoples have come to enjoy.

Another aspect of our efforts for constructive engagement in the international community is the establishment of the Joint United Nations Presence in Pohnpei. Led by The United Nations Population Fund on behalf of the UNDP and UNICEF, the joint presence is a welcome undertaking by the United Nations in strengthening its activities in the FSM and bringing the UN and its agencies closer to our people.

Last week, our UN mission submitted to the UN Headquarters our national claim for an extended continental shelf. If successful, this claim will allow us to expand our territorial boundaries and thereby increase our natural resources, including our fishing grounds.

Regional Initiatives

In order to respond to the many needs of our country, we must also work with our closer neighbors to identify sub-regional initiatives that will increase capacity, cut costs and widen our responses to island issues.

I therefore intend to become even more active in the Western Micronesian Chief Executives' Summit and the Micronesian Presidents' Summit to strengthen our capacity to be proactive to environmental issues, particularly through the Micronesia Challenge and other initiatives in the areas of energy, tourism, invasive species, telecommunications and solid waste management.

I will also work towards the establishment of the Micronesian Center for a Sustainable Future, a proposed sub-regional institution that will strengthen our island capacities, cultures and political outreach to the world.

It is time that the islands of Micronesia stand together as a united front in the regional and international forum.


My friends, the issues that we face today are not new. Through our cooperative actions, at the national and state levels, and at the legislative and executive levels, we must arrive at a consensus on a way forward during these difficult economic times.

Economic growth, stability and independence will ultimately necessitate that we all give away something to gain something. This is the way of life. We must be sure that when all is said and done, we retain our cultural integrity, we govern our own nation, we respect the differences between our four states and we reap the benefits of our own development efforts.

And for us to reap these benefits, we must have the involvement of each and every Pohnpeian, Chuukese, Kosraean and Yapese individual as a citizen of our growing nation. We must remember that as long as a single person is without a job, an education, a marketable skill, health insurance, or a role to play in our destiny, then we have not completed our voyage.

Ladies and Gentlemen, with a focused effort, there is no doubt that our country will overcome this current economic crisis and continue to move forward to expand economic options for all of our citizens. For every crisis there is an opportunity. I therefore call on all of the People of this country to rise to the occasion and to innovatively grasp your own opportunities. We must view the current crisis as a test to our resolve and our national solidarity and a chance for our family to unite together as we did thirty years ago.

Let us get to work. God bless you and thank you.