Government of the Federated States of Micronesia

EPIC meeting produces challenging resolutions

PALIKIR, Pohnpei (FSM Information Service): July 27, 2001 – The Economic Policy Implementation Council(EPIC) of the Federated States of Micronesia met on July 13 and 14 for a two-day meeting in Palikir.

Since its inception in June 2000, EPIC has had four meetings in which several major issues were discussed and either resolved or developed solutions for.

Discussion during the 2-day meeting centered on the Compact and several of its provisions. The Council’s agenda of discussion resulted in six resolution for the Governments to follow, and they are:

  1. The commitment of a Trust Fund for surplus FY 2002 and 2003 Compact Funding was decided according to the following:

    “In the event that Compact economic assistance negotiations are not completed prior to the end of the first fifteen year period, not less than 60% (approximately $ 20 million) of the increased Compact cash transfers to the FSM during fiscal year 2002 and 2003 will be dedicated to the Stability Account of the FSM Trust Fund.”

  2. The creation of the stability account was unanimously agreed to: “EPIC endorses the creation of a Stability Account within the FSM Trust Fund and respectfully requests the Congress of the FSM to enact legislation to that effect on an urgent basis after consultation with the States.”

  3. The formula for distribution of Compact Fund for Fiscal Years 2002 and 2003 was agreed in the following resolution: “the EPIC requests the President of the FSM to certify to the United States Government the distribution of Copmpact economic assistance for fiscal years 2002 and 2003 consistent with the same distribution that has been in place for each of the fifteen years of the Compact of Free Association.”

    And in the same resolution, the EPIC requested the establishment of committee to study issues related to the “existing distribution formula” and devise potential future formula options.

  4. The International Development Fund was agreed by the leadership to be decentralize to allow the states easier and quicker access to their respective sub-accounts, as noted in the following resolution:

    “The EPIC request the Congress of FSM takes action to determine the FDA’s and the FSM Development Bank’s respective roles in managing the IDF sub-account funds.

    “The EPIC further requests the National Government to seek ways to enable the balance of IDF funds to be invested in the Stability Account of the FSM Trust Fund.”

  5. The Fifth Resolution requested improvements on the reporting of the Governments Investment Portfolio’s: “The EPIC requests the President of the FSM to ensure that adequate measures are taken to ensure that accurate and readily understood reports are distributed by the Department of Finance and Administration to each Government on end-of-month prinicipal and earnings balances consistent with appropriate accounting principles not later than the end of the following.

    “The EPIC further requests the President of the FSM to ensure that adequate measures are taken to ensure that cash disbursement requests made by the State Governments according to existing cash management and disbursement procedures are responded to without delay from the FSM Treasury.”

  6. The final resolution was in response to the US Military’s decision to terminate the services of the Civic Action Team (CAT TEAM):

    “The EPIC recommends that the one million dollar plus inflation adjustment under the Compact section 212 be distributed to the State Governments under existing arrangement and for the purpose of implementing projects consistent with the grant.

In the same resolution, EPIC further recommended “the National Government pursue, on a government-to-government basis, ways to address the stated intention of the US military to terminate the Civic Action Team services to the FSM.”

The date and venue of the next EPIC meeting is yet to be finalized.

The EPIC is comprised of leadership from the national and the four state governments. Members from the National government include the President, Vice-President and Speaker of the FSM Congress.

The Governors and Speakers of the Legislative Branches represent the State Governments. The FSM Department of Economic Affairs remains the Secretariat for the Council.