FSM Vice President Yosiwo George hands over stimulus checks to business owners in Pohnpei. Photo courtesy of FSMIS
Palikir, Pohnpei— At least 55 businesses throughout the Federated Stated of Micronesia have received stimulus grants from the national government through a locally funded program that seeks to mitigate the impact of Covid-19 pandemic on the tourism sector.
According to the Office of the President, the FSM government has released the initial amount of $567,074 for the Economic Stimulus Package. Recipients of this funding include 11 businesses in Yap, 18 businesses in Chuuk, 20 businesses in Pohnpei and six businesses in Kosrae.
FSM states have closed their borders as part of the measures to prevent the entry of the Covid-19 contagion in the country. FSM remains coronavirus-free.
A ceremony was held May 13 to celebrate the first disbursements of financial assistance. The government said it is currently evaluating about 100 additional businesses for financial assistance.
The initial release is focused on the tourism sector through the Tourism Sector Mitigation Fund via Public-Law 21-104, and implemented through emergency regulations issued by FSM President David W. Panuelo on May 4. National leaders are working to expand assistance to other sectors in the nation’s economy.
Tourism is a main contributor to the Pacific nation's economy.
At the same time that checks were being disbursed in Palikir, the field offices of the Department of Finance & Administration were disbursing payments in Yap, Chuuk and Kosrae.
“The total number of affected tourism sector businesses in the FSM is approximately 184,” Panuelo said in his remarks to Pohnpei’s tourism sector representatives.
Panuelo said businesses will be receiving 75 percent of the salaries and wages they paid in the March quarter.
"If you continue to submit your [information] on a monthly basis, you’ll continue to receive monthly reimbursements for wages and salaries," Panuelo told the business representatives. "Our focus for the Economic Stimulus Package is to keep businesses open and our citizens employed.”
The FSM Economic Stimulus Package is locally funded through Public Laws 21-94 and 21-104, in addition to funding from the Project Development Fund under the National Oceanic Marine Resource Authority and a grant from the Asian Development Bank.
The formula used to calculate the economic relief is based on an amount equal to 75 percent of wages and salaries, plus an amount equal to 100 percent of Social Security and gross revenue tax paid. In addition to these benefits, the government is also assisting businesses with the monthly interest component of loan payments.
The nation’s tourism sector’s turnover revenues in 2019 were approximately $43.3 million and the sector employs 1,048 people, accounting for approximately 6.7 percent of the FSM’s total labor force, which represented approximately $5.72 million in wages and salaries in fiscal 2019.
The FSM national government has determined that approximately 500 individuals in the tourism sector have lost their jobs or had their hours reduced as a result of the Covid-19 pandemic and will qualify for unemployment assistance.
The FSM’s tourism sector’s gross revenue tax returns for the fiscal 2019 were approximately $1,100,000. The March 2020 quarter represents a 30 percent downturn from the March 2019 quarter.
January 2020 was a particularly successful month for the Nation’s tourism sector, and the FSM national government predicts that the next quarter will demonstrate a far higher downturn.
Panuelo said in a week or two the government will announce the details of the Pandemic Unemployment Assistance Program through the newly established Office of Pandemic Unemployment Assistance.
"We have requested a grant of approximately $40,500,000 of funding from the United States to assist those who have lost their unemployment [or suffered reduced hours] due to the effects of Covids-19," he said.
Individuals will be able to fill out an application and we’ll begin processing as a separate means of support, with eligible individuals receiving a minimum payment of $166 per week, backdated from Jan. 27 all the way up to Dec. 31.