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Privatization Plan Drafted: Reform Is Urged

PALIKIR, Pohnpei (FSM Information Service): August 17, 2001 - On July 12, 2001 the FSM National Government transmitted the draft "Privatization Master Plan" to the four states for their review and comments. By request the comments are to be at the FSM Secretary of Economic Affairs' office at the earliest convenience.

The Privatization Master Plan is intended to clarify and further reinforce the general National and State governments' commitment to reforming the public enterprise sector and facilitate the development of private sector.

As forwarded in the Plan, the government has made commitment to further reduce the public sector role in the economy by transferring and divesting Public Sector Enterprises and other government unit services that could be better managed by the private sector.

Furthermore, A study conducted by TA 3201 funded by the Asian Development Bank (ADB) in early 2000 in conjunction with the Department of Economic Affairs evidently showed that the public enterprise sector in the FSM presents a substantial financial and economic burden on the State and National budgets, and therefore the movement to transform the sector is timely and in order.

The Plan is also intended as a means to fulfill one of the conditional requirements for effectiveness of the proposed Private Sector Development Loan Project (PSD) from the ADB.

This document (The Privatization Master Plan) should be viewed as a work in progress seeking to catalyze a process of change. And the FSM is obligated to inform the public about this Plan.

Chapter II of the Plan stated that transactions be sequenced in a manner that builds a political constituency in favor of reform as quickly as possible.

Key staff of the Department of Economic Affairs has planned to visit the states tentatively in September 2001 to review and solicit comments and inputs of each state on the Plan.

Nevertheless, workshops have been arranged to further enhance current development of the PLAN. A National Level Review Workshop, for the National Enterprises and Stakeholders is slated for August 29, 2001, 9:00 AM at the Central Building, followed by the State Level Review Workshops in each of the state. For the meantime venues for the State Level Workshops have not been confirmed.

Hard copy or electronic version of the Privatization Master Plan can be obtained at the office of the Secretary of Economic Affairs. One could either call telephone numbers (320-2646/5133) or e-mail address (fsmrd@mail.fm), to ask for the documents.