By Pacific Island Times News Staff
The Federated States of Micronesia expects to receive more than $139 million in sector grants from the U.S. government, constituting the fiscal 2025 installment under the Compact of Free Association.
According to the Office of the FSM President, the Joint Economic Management Committee, or JEMCO, has set the seal on the grants’ release following its approval of the FSM’s 2025 Annual Implementation Plan.
“On Sept. 20, JEMCO voted to concur with the proposed AIP with a minor adjustment to account for limitations on the use of sector grants for international travels that are still under review,” states a press release from the president’s office.
The sector grants will be factored into the FSM’s fiscal 2025 budget.
However, the funding stream will depend on the resolution of the budget impasse in Washington amid the looming Sept. 30 deadline.
The U.S. House of Representatives is expected to move early next week on a continuing resolution to keep the federal government funded through Dec. 20 to buy time to iron out a funding agreement for the rest of fiscal 2025.
The COFA Amendment Act, signed by President Biden in March, mandates the U.S. to provide the FSM with sector grants totaling $140 million annually for 20 years, beginning in fiscal 2024.
“These funds can be used in the same sectors as under the current compact: education, health care, private sector development, the environment, public sector capacity building, infrastructure and enhanced reporting and accountability,” states the COFA fact sheet from the FSM embassy in Washington, D.C.
Funds may be used for other sectors if mutually decided in the future.
“The FSM will have the flexibility to decide on sector allocations, subject only to a requirement that not less than a three-year moving average of 25 percent of the total annual grant amounts provided for grants go to the public infrastructure sector,” states the factsheet.
Besides the sector grants, the COFA also requires the U.S. to make $500 million in new contributions to the FSM Compact Trust Fund. The first $250 million was released in July and the other $250 million is scheduled for fiscal 2025.
JEMCO comprises three representatives from the U.S. and three from the FSM. The equal representations were part of the negotiated agreement between the two countries.
Before the treaty’s amendment, the FSM had only two seats in the committee.
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