Government of the Federated States of Micronesia

Vice President joints conference on “Business Opportunities in the Micronesian Islands” on Guam

Palikir, Pohnpei (FSM Information Service): October 17, 2007 – Vice President Alik L. Alik headed a delegation to Guam to join a conference sponsored by the US Department of Interior which focuses on Business Opportunities in the Micronesian Island.

The Conference was held on October 8 – 9 and Vice President Alik was given the privilege to give a statement at the conference and the statement in its entirety reads:

“It is indeed a great pleasure for me to join deputy assistant secretary Cohen and President Remengesau in extending warm greetings to all of you and welcoming those of you who have traveled from afar to be with us in our region for the first time. I am also pleased and privileged to introduce you to the great islands of the Federated States of Micronesia and the Business opportunities that we offer.

On behalf of the FSM, I would like to join President Remengesau in extending our sincere appreciation to Deputy Assistant Secretary Cohen, Governor Camacho and the people of Guam for inviting us to this important conference and for your hospitality. I also wish to express our special thanks to you for taking care of our people who are residing here.

Before I proceed, and with your indulgence, I wish to acknowledge the presence of some of our national and state leaders and our private sector representatives who are here as part of the FSM delegation.

Ladies and gentlemen, few people have heard about the FSM, and fewer people are even aware of the investment opportunities that it offers. FSM is only one hour of flight away from Guam, 1,800 miles southeast of Japan and 3,000 miles southwest of Hawaii. It is one of the biggest countries in the Micronesian region and this gives it a competitive edge in terms of investment potential.

FSM is a federation, which consist of the National Government and four states namely: Chuuk, Kosrae, Pohnpei and Yap. The FSM’s political system is modeled after the U.S. system and our constitution guarantees democracy, human rights and the protection of traditional rights. Under the Compact Agreement, the U.S. provides financial assistance, defense and allows our citizens to serve in the U.S. armed forces. There is no doubt that the assistance and protection that the U.S. offers to FSM goes a long way in making FSM a stable and attractive investment destination.

FSM’s Institutional Framework, combined with the good market access that it has, makes it a good investment destination. We have adopted a liberal trade and investment regime, which is supported by very low taxes. Land leases have also been extended up to 99 years in most states. Most of our exports can enter the Australian, New Zealand, European and the U.S. market duty free under preferential trade agreements. FSM has also signed the Pacific Island countries trade agreement, which gives investors access to a market of about 7 Million people. We are currently formulating a trade policy and a modern tax regime to ease the burden on investors. Furthermore, FSM has access to International Financial Instruments under the various schemes, which offer credit at concessional rates.

Investors will also have access to modern infrastructural services, such as Telecommunications, Banking, insurance, transportation, power, hotels, and medical service. In order to ease the costs of doing business in FSM, about 30% ($400 Million) of the grants have been earmarked for infrastructure development in accordance with our Infrastructure development plan. Given our limited capacity to undertake these construction projects, we invite investors to come and assist us with upgrading our infrastructure.

Ladies and gentlemen, besides the opportunity in the services sectors alluded to above, FSM has other lucrative investment opportunities in agriculture, fisheries, tourism and manufacturing.

With its ideal temperate location, the FSM is suitable for growing unique agricultural products throughout the year. Some of these products include: bananas, noni, pepper and copra, which can be produced into virgin coconut oil, bio-fuel and other products. Livestock and poultry production is another area that can be explored and there is potential for establishing viable slaughterhouses.

It is well known that FSM has one of the largest tuna resources in the Micronesian region, capable of a sustained yield of well over 1000,000 tons a year, with an approximate market value of about US$200 million per annum. This creates enormous opportunity for investors to establish medium-sized canneries and supply the U.S. and the European markets. Currently, FSM is negotiating an economic partnership agreement with the European commission to improve its market access for tuna and other products to the European market.

There is potential in the aquaculture sector to farm black pearls, giant clams, aquarium clams, corals, sponges, groupers, rabbit fish and other high demand species for the export market in Europe, US and Asia.

Investment opportunities also exist in the light-manufacturing sector where assembly industries can be established to produce plastics, spring water, clothing, and beer and add value to our agricultural and fisheries products.

The last but very promising sector for further investment in FSM is Tourism. With four distinct cultural and traditional life-styles, beautiful surrounding islands and sea, The FSM is one of the last truly unspoiled paradises on earth that presents a unique experience. We have the most magnificent dive destinations and unique historical sites. FSM promotes environment friendly and sustainable tourism. To this end, it has adopted the Micronesian challenge to conserve near-shore marine and the terrestrial resources as part of our overall environmental protection goals.

Some of the opportunities in tourism include eco-tourism, development of international class hotels, dive operations, and cruise ships and coral gardens. Opportunities also exist for direct flight from Asia to FSM.

IN conclusion, we would like to invite you to visit FSM, enjoy the beauty of our islands and explore the unique business opportunities that exist in the infrastructural services, agriculture, Fisheries, manufacturing and tourism. Please fell free to commingle with our delegation and visit our display booth for more information on the business opportunities that exist in FSM.

Kinisou chapur, Kulo, Kalahngan, Kamagar, Si-yus maase and we will look forward to welcoming you in our islands.

Thank you very much. “