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EPIC resolutions anticipates amended Compact

PALIKIR, Pohnpei (FSM Information Service): December 9, 2003 - The Federated States of Micronesia Economic Policy Implementation Council (EPIC) held its Ninth meeting in late October and adopted five Resolutions anticipating the implementation of the amended Compact.

The Resolutions provide guidelines to ensure effective transition and implementation of the proposed amended Compact Agreement between the FSM and the United States. Comprised of the Leadership from the National and four State Governments, the EPIC adopted the following resolutions:

In Resolution 1, the EPIC urged action from the FSM Congress on "Special Grant Awards." With respect to FSM Law which requires the FSM Congress's approval of any new foreign grants to the national or state governments, the resolution urges the FSM Congress's review and favorable action on US Congress Continuing Resolution with further request to the Leadership to administer the funding in a manner consistent with grant award terms and conditions.

The EPIC endorsed Resolution 2 for an Accountability Improvement Project as proposed by the FSM Public Auditors Office and the Department of Finance and Administration. The resolution is in light of the FSM's financial report card as presented by National Public Auditor's to the EPIC. The proposed Accountability Improvement project is intended to address emerging concerns of financial accountability, compliance and reporting, especially under new provisions under the amended Compact.

Resolution 3, referenced efforts to expedite the implementation of projects to be funded from the FY2004 Infrastructure Sector Grant. The EPIC urged immediate review and preparation of the Infrastructure Development Plan (IDP) as required under the proposed amended Compact. A deadline of December 15^th was set for the IDP draft to be submitted to the President of the FSM.

The fourth Resolution requests modifications in External Debt Accounting between National and State Governments. The Resolution concerned the External Debt Management fund administered by the National Government and with lending agreements between FSM and external Financial Institutions.

After extensive deliberation, the Leadership adopted Resolution 5, which established a recommended Compact Sector Grant distribution formula for FY2005 and FY2006, as follows:

Chuuk State Government: 38.57 percent;
Kosrae State Government: 11.06 percent;
Pohnpei State Government: 25.69 percent;
Yap State Government: 16.03 percent; and
National Government: 8.65 percent;

The EPIC members agreed that each Government should maintain fiscal discipline, in particular by controlling their costs of Government operations.

The Council was created in June 2000, with a mandate 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 Council Membership is comprised of, from the National Government - the President and the Speaker of the FSM Congress; from the State Governments - the Governors and Presiding Officers of each Legislature.

The FSM Department of Economic Affairs serves as the Secretariat for the Council.