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Federated States of Micronesia Country Report

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Risk Level

Low
Moderate
Elevated
High
Very High
Severe
Extreme

Overview

Executive Summary

The Federated States of Micronesia (FSM) relies heavily on US financial aid, administered through the 2003 Compact of Free Association agreement in return for the US's indefinite "exclusive territorial control". Fishing remains the dominant industry, followed by subsistence farming. Tourism is growing but is curbed by poor infrastructure, limited international communication links, and strong regional competition.Although increased fishery licence fees will support fiscal consolidation, US President Donald Trump's immigration policy and cuts in the environmental budget could hurt the FSM's economy.In line with the updated infrastructure development plan for fiscal year (FY) 2016 through FY 2025, infrastructure projects are likely to support moderate growth of 1.6% in 2019 following an estimated 1.9% in 2018. Expected grants for infrastructure projects and workers' remittances are likely to maintain the current-account surplus of about 3% of GDP near-term.The inflation outlook will be favourable, as a weaker outlook for oil prices and the stronger US dollar will help ease inflation to 2.3% in 2019. That said, inflation will remain subject to volatility from exogenous shocks.FSM's main political issue relates to its four states' desire for greater independence from central government – especially Chuuk Island, which accounts for almost half the country's population. However, concerns surrounding the need to maintain US funding – which is scheduled to end in 2023 – mean that any significant move towards independence by any state is unlikely.Corruption and conflicts of interest between national, state, and municipal officials have been cited as an impediment to business operations. Several ex-national government officials have been convicted on corruption charges under the Financial Management Act, usually for fraud in procurement. These risks persist: there have been no reports of significant improvement in the transparency of government procurement processes or declaration of business interests.
Last update: April 25, 2019

Operational Outlook

Corruption and conflicts of interest between national, state, and municipal officials have been cited as an impediment to business operations by the Investment Climate Statements and the US Department of State. Several ex-national government officials have been convicted on corruption charges under the Federated States of Micronesia (FSM)'s Financial Management Act, usually for fraud in procurement. These risks persist: there have been no reports of significant improvement in the transparency of government procurement processes or declaration of business interests. FSM's constitution allows trade unions in the small private sector, but none have been established.

Last update: December 7, 2018

Terrorism

Low

There is no known threat of terrorism in Micronesia.

Last update: December 7, 2018

War Risks

Micronesia is protected by the United States. It faces no known threat from neighbouring states.

Last update: December 7, 2018

Social Stability

Low

Protests are rare and any demonstrations over the coming year are highly unlikely to damage any property or significantly disrupt traffic or business.

Last update: December 7, 2018

Health Risk

Severe

Vaccinations required to enter the country

No vaccinations are required to enter the country.

Routine Vaccinations

Hepatitis A: A vaccine is available for anyone over one year of age. The vaccine may not be effective for certain people, e.g. those born before 1945 and who lived as a child in a developing country and/or have a past history of jaundice (icterus). These people can instead get a shot of immune globulin (IG) to boost their immunity against the disease.

Hepatitis B: A vaccine is available for children at least two months old.

Diphtheria-Tetanus-Polio: A booster shot should be administered if necessary (once every ten years).

Other Vaccinations

Typhoid Fever: If your travels take you to regions with poor sanitary conditions (for children two years old and up).

For Children: All standard childhood immunizations should be up-to-date. In the case of a long stay, the BCG vaccine is recommended for children over one month and the MMR (measles-mumps-rubella) vaccine for children over nine months.

Last update: April 5, 2019

Natural Risks

Severe

Micronesia’s is situated, on average, only 1 m (3.3 ft) above sea level and is therefore highly vulnerable to changes in sea levels caused by climate change. Furthermore, the country is at risk for cyclones between June and December, with a peak in storm activity occurring in August and September. Between April and May 2015, three typhoons hit the country (five killed during Super Typhoon Maysak: several thousand people evacuated). During such events, significant disruptions to transportation services on the islands often occur and last-minute flight cancelations cannot be ruled out.

Last update: April 5, 2019

Transportation

Low

Roads - unpaved outside of cities - are usually in sub-standard condition. Public transit (buses) are available on Yap Island. Travel between islands is done by boat.

Last update: April 5, 2019

Practical Information

Climate

Micronesia has a tropical climate with relatively steady temperatures throughout the year. Conditions are generally hot and humid but cooling winds often pass over the archipelago. The wet season lasts from May to October. Cyclone season lasts from June to December, with a peak of storms striking in late August/early September.

Useful Numbers

Country Code: +691
in Chuuk, Kosrae et Yap 
Emergency Services: 911
in Pohnpei 
Emergency Services: 320-221

Electricity

Voltage: 120 V ~ 60 Hz

Outlets:

Last update: April 5, 2019