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Relations Between Pohnpei State and FSM

What's the Problem?

It's no secret that Pohnpei State has had its differences with the FSM Government. Pohnpei was the only state voting against the Compact of Free Association in the 1983 FSM plebiscite. Political tension has simmered since then, now and then erupting openly. In November 1991, the Pohnpei State Legislature created a special committee to address the areas of concern. It was mandated to review the impact of the Compact on Pohnpei and review Pohnpei's political relationship with the FSM government and the other states. In October 1993, this committee produced a report which was adopted by the Pohnpei Legislature in January 1994.

There were several major points of tension identified in the special committee report. They seem to revolve around three key issues, all of them inter-related: money, political authority, and land. The thread of the argument seems to run as follows.

Because of the reduction of US funds at the inception of the Compact, Pohnpei is worse off economically than it was during the last decade of the trusteeship. As the state faces another step-down in Compact funding and the end of the Compact period, it is going to have to take drastic steps to increase revenue and cut costs or face a staggering debt that could come to $61 million by the year 2001. To avoid this economic debacle the state must make hard economic decisions: eg, eliminating costly frills from the government budget, liberalizing investment policies so as to lure foreign business, and so on. These difficult steps could be taken much more easily if Pohnpei State enjoyed the right to make decisions on its own without having to seek approval from the FSM. Indeed, some of the present FSM policies seem altogether contrary to what Pohnpei is obliged to do in its present circumstances. Not only is FSM law a burden, but the press of non-FSM residents of Pohnpei puts pressure on Pohnpei land, to say nothing of government services.

The complaints mentioned in the committee report are these:

  1. Pohnpei needs more liberalized investment policies than FSM is willing to provide.
  2. FSM government is encroaching on the authority of the state by making payments to local governments and handing out Congress money over the head of state officials to other institutions.
  3. FSM government is failing to compensate Pohnpei for its government services to non-Pohnpeian FSM citizens.
  4. Pohnpei is obligated to honor those FSM laws that may be against its best interests--eg, open immigration policy.
  5. Land on Pohnpei is being lost to other FSM citizens, even though purchase of land by a non-Pohnpeian is illegal in the Pohnpeian constitution.
  6. The presence of the national government on Pohnpei only intensifies the negative social change that is taking place these days and is exemplified in increased crime and the breakdown of the family.
  7. There are too many levels of government (national, state, municipal) for effective and decisive action.
  8. Pohnpei is ready for full independence, as opposed to the Free Association of the FSM under the Compact.

The Money Issue

Some participants saw the money issue as seriously threatening the unity of FSM. As the states run short of funds and competition increases for limited resources, resentment at the national government's share of money can be expected to grow and fissures in political unity may deepen. One person thought that at the end of the Compact period, the states may decide that it is in their best interest to sever connections with the national government and make their own political deals with the US and other donor nations. On the other hand, as one person pointed out, times have changed and world powers no longer have the same national stake in Micronesia. Now that the Cold War has ended, the US has a very different political agenda from what it once had. Its interest has been diverted to Europe, especially the former Soviet Union, and other concerns like the environment and its domestic economy have come to the fore. The US may continue to assist

Micronesia in the future, but almost certainly at a reduced level. Will other nations rush to the aid of the Pacific? Australia and New Zealand have given signals that they will moderate the level of aid they give the Pacific nations. Japan is one possible source of assistance, but there is little reason to believe that they will take up the slack from the US in the new millennium. Overall, the world scene is not such as to encourage the hope that donors will be found to support new small nations.

Should Pohnpei be receiving a larger share of the Compact funds? The larger states (that is, Chuuk and Pohnpei) are underfunded, one government official noted, because the formula for dividing these funds was based on an equal share for each state as well as on population. Yet, the FSM national government, located on Pohnpei, receives a sizable share of the Compact funds. Much of this money is spent on Pohnpei and has propelled the rapid growth of the private sector on the island. Moreover, Pohnpei receives tax money from non-Pohnpeians working for the FSM. This economic spillover may balance out the public services that these employees obtain from the state.

Would Pohnpei, or any state, be better off financially if the national government were disbanded and the money that would have been used to finance it split up among the states? Some participants apparently felt so. Others thought that the state's share of this money would not suffice to pay for the embassies, foreign services, regulatory agencies, and other offices that the state would require if it became a separate nation. Even worse, they felt, was the loss of political leverage that would result at the very time that Pacific island states are beginning to recognize the advantages of union, at least in the form of regionalism.

Participants asked again and again why the national government did not share with the states the $20 million in income from fishing licenses. One public official pointed out that Congress has repeatedly resisted splitting up this money, arguing that it eventually goes to the states anyway through congressional allocations. This may be so, some protested, but Congress allocates the money in terms of its own priorities, not the states'. The recent $10 million appropriation to municipalities and other institutions was a splendid illustration. It caused an uproar in every cash-strapped state and probably led states to believe that they would do far better to get their share of the fishing revenue before Congress had a chance to parcel it out on its own.

Who Should Have the Authority and How Much?

Just under the surface in this discussion was the issue of political authority. The national government was created to serve the states and to provide them with certain services (eg, immigration, foreign investment and interstate commerce). Yet, all too often the national government is perceived as subverting the state's own interests. Congress is seen as doing this when it allocates for its own purposes money that is badly needed by the states. Pohnpei State's foreign investment laws were voided by the FSM Supreme Court. The type of federalism that was envisioned by the founders of the Constitution is being swept away by a national government that is growing too rich and fat and powerful, some believe.

Those responsible for the creation of FSM determined some years ago never to allow such an overfed bureaucracy as the Trust Territory government on Saipan in the 1970s to develop in the FSM. The numbers have been kept down (about 300 FSM employees compared to over 800 in TT days), but there has been expansion of late. Health Services is overflowing its office space and Education has become a separate department. All this means a higher price tag for FSM national government, but it also creates new layers of supervision that the states must penetrate in order to get what they need.

One participant thought that he saw one large shadowy issue behind all the other issues. The real cause of tension between Pohnpei and the FSM national government, he argued, was Pohnpeians' resentment toward the attitude of some FSM leaders. He felt that Congress had become too strong and autocratic, and the arrogance displayed by some of its members rankled many on the state level. State leaders conferences, which were begun some time ago to work out amicable solutions to common problems, resulted in agreement on many issues. Congress, however, often chose to ignore these solutions in enacting its legislation. Another participant mentioned that after the last allocation of funds from the Congress, one of the congressmen insisted that he retain direct control of the money. He wanted any requests for assistance to be screened by his own office so that the money benefited the constituents of his own choice.

If the issue that looms large is truly the unchecked power of the Congress and the arrogance of some of its members, a non-Micronesian might wonder why the state feels the need to undermine the institution itself rather than merely replace those elected members of Congress who offend its sensibilities.

Many of the participants in the discussion acknowledged that there remain genuine problems how political authority is to be shared between the national government and the states. Tensions between the FSM and the states have always existed and probably will continue in the future. After all, this is built into the federalist system that the FSM adopted at its birth. Mechanisms like leadership conferences can be found to resolve these tensions, however, if both levels of government show good faith and the desire to settle these questions honestly. The dispute over law enforcement, for example, was settled in the 1990 Constitutional Convention.

Protecting Pohnpeian Interests

Land is always a sensitive issue in small island states. It is not surprising, therefore, that Pohnpei should view with alarm the prospect of having its island overrun with non-Pohnpeians who buy up its land. There is no evidence that this has in fact happened, however. Moreover, the Pohnpei State Constitution makes the sale of land by Pohnpeians illegal precisely in order to protect this valuable resource. If this provision of the constitution is being violated and land sales are made to outsiders, one participant said, that blame can be placed on the state's failure to enforce its own laws.

Land leases are also strictly regulated by law,. Throughout the FSM land may be leased for a maximum of only 25 year, a much shorter lease period than is allowed in FSM's neighboring nations and territories. While this serves as a means of protecting local people from the temptation of signing deals that provide a large sum of money today at the expense of loss of control over their land tomorrow, it also has the effect of discouraging foreign investment. From its earliest trusteeship days, Micronesian has imbibed from the US a deep distrust of foreign investment. It was not until 1974 that foreign investment was even allowed in the Trust Territory, and the new governments have continued to view foreign investors with suspicion. Pohnpei, like the rest of FSM, has taken pains to protect itself, but this has been done at the expense of much-needed foreign capital. Such decisions always involved a trade off.

There is no doubt that Pohnpei faces problems, especially financial problems, in the future. Yet, as one participant remarked, so do all the other states. Should Pohnpei attempt to solve these problems alone or together with the rest of the states? He thought the state could better face its future difficulties in cooperation with the national government and the other states. But that is a question that is still being debated. We can only hope that the debate will be carried on in public and not behind the closed doors of an air-conditioned government office.

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