Economical overview
The economy of the Micronesia Federation is
largely based on aid. Most of the aid comes from the
United States. In addition, the fishing industry is an
important industry. Many residents feed on agriculture
and fishing for their own use.
Tourism has increased in importance, but inadequate
infrastructure and the fact that the country is so
remote puts a limit on the development of the industry.
The country also receives revenue from the sale of
fishing licenses to foreign fishing fleets, mainly
Japanese. Money sent home by Micronesia working abroad
also provides an important financial contribution. In
recent years, sales of the country's domain names on the
Internet (.fm) have also generated revenue.
-
Countryaah.com:
Major imports by Micronesia, covering a full list of top products imported by the country and trade value for each product category.
The state sector dominates the economy. For a long
time, the state was largely the only employer. Even
today, over half of the salaried employees are found in
the state sector. The government's ambition is to try to
stimulate the growth of a private business sector, but
the level of wages in the state sector is so high that
it wants to invest in private enterprise.
Guaranteed assistance until 2024
An extension of the economic parts of the Compact of
Free Association with the United States was negotiated
in 2003. The new agreement provided the Micronesian
Federation with a total financial support of $ 1.8
billion over a 20-year period, but part of the money is
invested in a fund for future use, which means that the
annual support has in practice decreased. Otherwise, the
assistance is mainly focused on a few areas, such as
education, health care and the environment.
At the same time, the United States places higher
demands on accounting of how the appropriations are used
and also on certain control of grants; criticism of the
fact that people in a senior position have enriched
themselves has occurred. A foundation has been formed
whose task is to prepare the country for reduced US
grants in the future.
-
Abbreviationfinder.org: Check this abbreviation website to find three letter ISO codes for all countries in the world, including FM which represents the country of Micronesia.
Since 1990, US support has gradually decreased. By
2023, however, the country is expected to receive close
to $ 100 million a year in direct support from the
United States. The fund for future use is jointly
managed by the Micronesia Federation and the United
States.
Investing in tourism
There is a large deficit in foreign trade; imports
are several times greater than exports. Exports mainly
consist of fish sold primarily to the USA and Japan.
Other export products are seafood, clothing and other
textiles, bananas, betel nuts, kava, copra (dried
coconut meat) and black pepper. Imports consist of
everything from food, machinery and beverages to tobacco
and fuel. More than a quarter of the import value in
2013 was fuel in the form of oil products. The US and
Japan are also the most important trading partners on
the import side.
Economic growth may vary rapidly depending on the
international economy which affects demand for the
country's export goods and on weather conditions, such
as hurricanes or drought. Since the turn of the
millennium, the Micronesian economy has had declines
around 2004, 2008 and 2013/2014.
In order to broaden and stabilize the economy, the
government has invested in developing tourism. The
country has strived to increase foreign investment and
improve infrastructure. Among other things, the runway
at Pohnpei International Airport was extended to allow
larger aircraft to land.
With the exception of 2011, inflation has been low in
the 2010s, unlike in the 2000s when the country
struggled with rising consumer prices. The country's
foreign debt was $ 81 million in 2015. The cost of the
debt then corresponded to 10 percent of the export
value, a slight increase compared to 2011 when the
figure was just over 7 percent.
FACTS - FINANCE
GDP per person
US $ 3,058 (2018)
Total GDP
US $ 345 million (2018)
GDP growth
1.4 percent (2018)
Agriculture's share of GDP
27.1 percent (2016)
Manufacturing industry's share of GDP
0.6 percent (2016)
The service sector's share of GDP
61.9 percent (2015)
Inflation
1.8 percent (2019)
Government debt's share of GDP
20.3 percent (2018)
Currency
US dollar
Merchandise exports
US $ 88 million (2014)
Imports
US $ 154 million (2014)
Current account
US $ 22 million (2014)
Commodity trade's share of GDP
54 percent (2018)
Main export goods
fish, seafood, betel nuts, kava
Largest trading partner
USA, Guam, Japan, Australia
|