America�s Micronesia problem

The end of the Compact of Free Association with the Federated States of Micronesia would have serious repercussions

The Department of the Interior is the current U.S. government agency that manages the Compact relationship with F.S.M. through the mechanisms of the Joint Economic Management Committee (JEMCO). JEMCO’s purpose is to “strengthen management and accountability with regard to the assistance provided under the Compact, as amended, and to promote the effective use of funding provided thereunder.” The JEMCO relationship provides for joint oversight of the Compact, but is viewed as being overly favorable towards the U.S. side of the relationship. The Compact agreement allows free movement of F.S.M. citizens to the rest of the U.S. with legal non-immigrant status. The majority of Micronesians migrate to Hawaii, Guam, American Samoa, and the Commonwealth of the Northern Marianas Islands. The associated costs with the arrangement weigh heavily on already limited budgets in the destination states and countries. The U.S. Congress has authorized increased funding in the budget over the last few fiscal years to address these impacts.
Both sides of the Compact relationship agree that there are economic, education, and healthcare concerns in F.S.M. It is solving those concerns where disagreement takes place, with Micronesians accusing the U.S. government of mismanagement and being too slow with development aid. The Department of the Interior’s Office of Insular Affairs in Honolulu also recognizes the unique set of challenges to F.S.M. and its neighbors and recently provided recommendations to Congressional leaders on how to address the concerns: “1) Addressing Freely Associated States (FAS) Out Migration 2) Improved coordination of Current Federal Programs and Funds 3) Establishment of Micronesian One-Stop Service Centers and 4) Establishing a Federal Interagency Group on Compact
Although the Compact of Free Association with the Federated States of Micronesia is scheduled to expire in 2023, the process for renegotiating the relationship with the United States has been ongoing throughout the agreement’s history. The most recent amendment to the agreement took place in 2003 with the passing of Public Law 108-188 by the 108th U.S. Congress. This highlights the ability to periodically go back and address policy and implementation concerns. The move to end the Compact in 2018 is not only five years early, it disrupts the funding of programs that are mandated through a 15-year provision cycle. In the current amended agreement, annual mandatory financial assistance is scheduled to end in 2023 and be replaced with a general trust fund. The Trust Fund was established and continues to report annually in accordance with the amended 2003 Compact.
Ending the Compact in 2018 impacts F.S.M. more than it does the U.S. For one thing, Mic­ronesians currently living abroad will lose their immigration status and face a potential loss of federal benefits already being provided. In F.S.M.s view, the ending of the Compact provides an opportunity to redefine the relationship with the U.S. and set things on a more equal footing, replacing the existing junior-senior partner relationship with one between two independent sovereign nations. The most serious impact from the U.S. standpoint is in the provision of security and defense for F.S.M. If that is not provided by the United States, who then would be the guarantor of Micronesian security? This is where the People’s Republic of China enters the picture.
At a time when news on the South China Sea disputes and the tensions in the East China Sea dominates the 24 hour news cycle, the growing Chinese influence in the Pacific islands seems to go generally unnoticed. However, Beijing’s growing presence has become of significant concern to many nations, including the U.S., Australia and New Zealand. The influence is generally low key, taking the form of a “soft power” approach that provides economic and developmental aid with “no strings attached.” As the investment and aid eclipses that provided by the U.S. and others in the region, Chinese influence carries more weight, including in foreign policy decisions, such as negotiations over the Compact of Free Association with F.S.M. Through numerous large-scale infrastructure investments (many of which are of questionable quality), small-scale programs and organisations, as well as the construction of Official Residences, the Chinese have demonstrated “a stark (difference) as the U.S. clearly and openly begun a process of decreased funding…leading to the end of the major bilateral agreement between it and the FSM.” Although concerns such as these were highlighted almost 10 years ago, Chinese investment is more noticeable now than ever.

The writer is  an US Army War College Fellow at the Daniel K. Inouye Asia Pacific Center for Security Studies

America�s Micronesia problem

The end of the Compact of Free Association with the Federated States of Micronesia would have serious repercussions

The Department of the Interior is the current U.S. government agency that manages the Compact relationship with F.S.M. through the mechanisms of the Joint Economic Management Committee (JEMCO). JEMCOs purpose is to strengthen management and accountability with regard to the assistance provided under the Compact, as amended, and to promote the effective use of funding provided thereunder. The JEMCO relationship provides for joint oversight of the Compact, but is viewed as being overly favorable towards the U.S. side of the relationship. The Compact agreement allows free movement of F.S.M. citizens to the rest of the U.S. with legal non-immigrant status. The majority of Micronesians migrate to Hawaii, Guam, American Samoa, and the Commonwealth of the Northern Marianas Islands. The associated costs with the arrangement weigh heavily on already limited budgets in the destination states and countries. The U.S. Congress has authorized increased funding in the budget over the last few fiscal years to address these impacts. Both sides of the Compact relationship agree that there are economic, education, and healthcare concerns in F.S.M. It is solving those concerns where disagreement takes place, with Micronesians accusing the U.S. government of mismanagement and being too slow with development aid. The Department of the Interiors Office of Insular Affairs in Honolulu also recognizes the unique set of challenges to F.S.M. and its neighbors and recently provided recommendations to Congressional leaders on how to address the concerns: 1) Addressing Freely Associated States (FAS) Out Migration 2) Improved coordination of Current Federal Programs and Funds 3) Establishment of Micronesian One-Stop Service Centers and 4) Establishing a Federal Interagency Group on Compact Although the Compact of Free Association with the Federated States of Micronesia is scheduled to expire in 2023, the process for renegotiating the relationship with the United States has been ongoing throughout the agreements history. The most recent amendment to the agreement took place in 2003 with the passing of Public Law 108-188 by the 108th U.S. Congress. This highlights the ability to periodically go back and address policy and implementation concerns. The move to end the Compact in 2018 is not only five years early, it disrupts the funding of programs that are mandated through a 15-year provision cycle. In the current amended agreement, annual mandatory financial assistance is scheduled to end in 2023 and be replaced with a general trust fund. The Trust Fund was established and continues to report annually in accordance with the amended 2003 Compact. Ending the Compact in 2018 impacts F.S.M. more than it does the U.S. For one thing, Micronesians currently living abroad will lose their immigration status and face a potential loss of federal benefits already being provided. In F.S.M.s view, the ending of the Compact provides an opportunity to redefine the relationship with the U.S. and set things on a more equal footing, replacing the existing junior-senior partner relationship with one between two independent sovereign nations. The most serious impact from the U.S. standpoint is in the provision of security and defense for F.S.M. If that is not provided by the United States, who then would be the guarantor of Micronesian security? This is where the Peoples Republic of China enters the picture. At a time when news on the South China Sea disputes and the tensions in the East China Sea dominates the 24 hour news cycle, the growing Chinese influence in the Pacific islands seems to go generally unnoticed. However, Beijings growing presence has become of significant concern to many nations, including the U.S., Australia and New Zealand. The influence is generally low key, taking the form of a soft power approach that provides economic and developmental aid with no strings attached. As the investment and aid eclipses that provided by the U.S. and others in the region, Chinese influence carries more weight, including in foreign policy decisions, such as negotiations over the Compact of Free Association with F.S.M. Through numerous large-scale infrastructure investments (many of which are of questionable quality), small-scale programs and organisations, as well as the construction of Official Residences, the Chinese have demonstrated a stark (difference) as the U.S. clearly and openly begun a process of decreased fundingleading to the end of the major bilateral agreement between it and the FSM. Although concerns such as these were highlighted almost 10 years ago, Chinese investment is more noticeable now than ever. The writer is an US Army War College Fellow at the Daniel K. Inouye Asia Pacific Center for Security Studies