The Joint Economic Management Committee 2016 Annual Meeting
Press Release #1609-02
Palikir, Pohnpei FSM Information Services
September 6, 2016

On August 24, 2016, the Joint Economic Management Committee or JEMCO held its annual meeting in Honolulu, Hawai’i. At the meeting JEMCO approved the FY2017Compact Sector grant allocations.

The FSM budget request for the health and education sectors were fully funded by JEMCO at $22,115,289 and $25,646,846 respectively. This is an 8 percent increase for health and a 6 percent increase for education over the FY2016 JEMCO allocations as the FSM States were able to update their Long Term Fiscal Frameworks to incorporate the increased grant revenue that the National Congress had created by zeroing out the allocation to the National Government under the distribution formula.

The public sector capacity building, private sector development, and environment sectors budget requests were 94 percent approved with 7 small projects not approved and another 5 projects being partially funded. The budget cuts made by JEMCO amounted to $478,994.  This was a considerable improvement over the FY2016 JEMCO allocation which had seen $1.3 million cut from the State requested budgets. This was a result of States responding to the grant manager’s request to ensure requests met JEMCO resolution conditions as well as an overall improvement in the quality of grant proposals.

A significant improvement was once again achieved in the allocation of infrastructure projects with a total of 11 schools and 13 dispensaries for Chuuk. School projects in Pohnpei and Yap were also approved while the key focus for Kosrae over the next three years will be on their new hospital. For the first time since 2012, when accreditation issues arose, JEMCO approved infrastructure projects for the College of Micronesia against the prior year unspent funds. For the Chuuk Hospital, Yap bridges, and Yap water wells requests, JEMCO required additional information before they can consider these proposals. A virtual vote is anticipated by FSM on these before the end of the 2016.

For FY2017 prior year unallocated sector grant assistance for the States of $19,493,559 in project grants was requested. JEMCO made an initial allocation of $11,619,445 of grants, and as with the infrastructure sector, there were some technical issues with some grant requests and it is anticipated that a further $6 million will be approved by JEMCO before the end of 2016.

Overall, the FSM was very pleased with the outcome of the JEMCO annual meeting and acknowledges the hard work of officials in both FSM and OIA for ensuring grant allocations lived up to State budget expectations.  The onus will now be on the State Governments to implement their budgets in a timely and effective manner.

For more detailed information about the 2016 Annual JEMCO meeting, please contact the FSM Office of Compact Management at (691) 320-2823.