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Federated States of Micronesia

Overview of Australia’s aid program to the Federated States of Micronesia

2013/14 Estimated Outcome: $4.2 million

2014/15 Budget Estimate: $4.6 million

Australia and the Federated States of Micronesia (FSM) share regional interests, particularly ensuring maritime and transnational security, sustainable management of fisheries and a common interest in supporting economic and human development. FSM faces a number of major development challenges due to its small land mass and population, shortage of skilled labour, narrow economic base, fragile natural environment and geographic isolation that results in high transport and communication costs. Many of the country’s people live in poverty, have poor health, and cannot access opportunities. As a regional neighbour, Australia is well-placed to work closely with the Federated States of Micronesia Government and civil society to improve the country’s development.

FSM is on track to meet only two MDGs: MDG 4, Reduce Child Mortality and MDG 7, Environmental Sustainability. Health is a particular concern, with tuberculosis rates increasing from 168 per 100,000 in 2008 to 320 per 100,000 in 2012, and Hansen’s disease (leprosy) the second highest rate in the world.

Through the Australia-Federated States of Micronesia Partnership for Development the two countries work together to support the Federated States of Micronesia’s development, especially in areas where help is most needed. The Partnership commits the Federated States of Micronesia to provide sound laws, policies and public services for its citizens, and to effectively and transparently manage development resources. It commits Australia to increase our aid, give good technical advice and to work closely with the Federated States of Micronesia’s Government to deliver this assistance.

Tax reform

Australia will support the FSM government in implementing financial and budgetary reforms and other adjustment measures to achieve greater self-reliance.

Development coordination

Australia works with FSM to improve the coordination of external development assistance to ensure greater alignment of external assistance with FSM policies and strategies.

Environmental management

Australia supports FSM’s development and enforcement of policies, laws and regulations; along with adequate legal and international treaty safeguards to achieve FSM’s goals on environmental management and economic development.

Our results

  • A 20 per cent increase in Chuuk State revenue since 2009 through the help of an Australian adviser working to address tax compliance issues.
  • The placement of an ODA Advisor within the Office of Statistics, Budget and Economic Management, Overseas Development Assistance and Compact Management (SBOC), supported the development and ratification of the Overseas Development Assistance Policy which aims to strategically improve the use of donor financial resources in FSM.
  • FSM has updated its Environmental Protection Act to reflect legislative protection at the State level.

Related documents

Last reviewed: 15 December, 2014