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  • By Mar-Vic Cagurangan

Choosing life over profit: FAS nations not in a hurry to reopen borders, even if that means further


Some countries have raised the victory flags after completely defeating Covid-19, while a few locations are seeing a new wave of positive cases just after getting past their peak. The freely associated states are among the last countries standing, sharing the hall of fame with nine other countries that have dodged the treacherous pandemic.

Palau, Federated States of Micronesia and Marshal Islands have fortified their borders early on and they are in no rush to reopen to visitors, even if that means blocking their revenue streams longer.

The near termination of transportation across the region has had strong repercussions on their economies, Department of Interior Assistant Secretary Douglas W. Domenech said after announcing the release of technical notes from the Graduate School USA’s Economic Monitoring and Analysis Program (EconMAP) in June.

Heavily dependent on tourism with 20 percent of all its workers employed in the tourism industry, Palau is projected to experience a 51 percent reduction in tourists, with a total expected of about 44,075 visitors, and a further 89 percent reduction in fiscal year 2021, according to EconMap. Overall, Palau is expected to experience a 22.3 percent decline in GDP and a loss of 3,128 jobs, primarily in the private sector.

But Palau President Tommy Remengesau was inclined to keep the wall up “as long as necessary” to protect the nation’s 20,000 citizens. “It became a question of economics or people’s lives,” Reuters quoted him as saying. “Profits come and go. But you only have one life to live and that’s the basic model we’ve been following. That’s why, as of today, no single virus (case) has been detected.”

In late June, Palau welcomed back the 58 Palau residents who have been repatriated after being stranded in Guam and Taiwan. All tested negative for Covid-19. According to the Office of the President of Palau, the chartered flights that brought them home implemented precautionary measures to reduce the risk of coronavirus exposure. Passengers coming from Guam were also required to complete the 14-day mandatory quarantine before the flight.

For FSM, the total projected loss to the economy will be the most severe decline in since the start of the amended Compact period in 2004. “While the FSM does not enjoy the same level of visitor arrivals as Palau, the majority of the Covid-19 impact will also be felt in the private sector, namely in the transportation and tourism sectors,” states the EconMap.

“The hotel and restaurant industries are projected to fall by 46 percent in fiscal year 2020 and then an additional 75 percent in fiscal year 2021, reflecting the absence of tourists and minimal interstate visitors. Similarly, the transportation sector, which includes shipping, port services, aviation, and airport ground handling, is projected to decline by 27 percent in fiscal year 2020 and an additional 14 percent in fiscal year 2021.”


Ultimately, the FSM is expected to experience a 6.9 percent decline in GDP and a loss of 1,841 jobs, reflecting an 11 percent reduction of employment levels in the FSM compared to fiscal year 2019.

But like Palau, FSM chooses to worry about that later. The citizens’ heath and safety is the government’s priority, FSM President David Panuelo said when he extended the public health emergency through July 31.

The nation’s eventual reopening is preceded by an elaborate preparation with meticulous details. FSM has conducted a series of exercises to assess and simulate Pohnpei’s capacity and procedures for what to do when FSM nation’s citizens stranded abroad are allowed to be repatriated.

The tabletop exercises included a simulation of how the national and state governments would respond if a commercial air carrier arrived in Pohnpei with FSM returning citizen, with at least one of the individuals beginning to show symptoms consistent with Covid-19 during the flight. The exercises included agencies playing out their real-life roles, with a school bus acting as a commercial flight, and port, immigration, customs, quarantine, and health officials responding as if the bus’s passengers were citizens coming from a Covid-19 affected jurisdiction.

The scenario included a number of potential real-life encounters, such as how to effectively address an individual showing symptoms of Covid-19 whilst on the flight, how to receive and home-quarantine members of the diplomatic corps, and how to brief passengers at Pohnpei’s designated quarantine facility, on what will happen over their 14 days of quarantine.

“FSM residents remain extremely vulnerable to this outbreak, taking into consideration the fact that airline travel routes connecting into the FSM already have confirmed cases of Covid-19 in Hawaii and Guam," Panuelo stated in his public health declaration.


In Marshall Islands, the overall economy relies very little on tourism and visitor arrivals with the hotel and restaurant sector representing only 2.3 percent of GDP. It is, however, more heavily dependent on the public sector, which includes important fisheries activity and sovereign rent receipts. The Marshall Islands Marine Resources Authority is already seeing declines ranging from 30 to 50 percent across aquarium fish exports, the tuna loining plant operations, purse seining operations and shore-based support to the longline fishing industry.

With airline travel to the RMI near complete shutdown, wholesale fuel operations are projected to drop by 45 percent, reflecting the loss of nearly all of its aviation fuel sales. Overall, the RMI is projected experience a 6.9 percent decline in GDP and a loss of 716 jobs.

At any rate, Marshall Islands is on the list of countries that travelers would consider as a safe destination. Marshall Islands officials attributed the country’s successful battle against Covid-19 to its own perpetual state of readiness.

“Because our frontline battle with climate change has shown us all too well that for threats of this scale, bold and early action is our best chance of survival,” Marshall Islands Foreign Minister Casten Nemra and Environment Minister Christopher Loeak wrote in an op-ed piece published by Radio New Zealand.

“Covid-19 has also shown us the consequence of combating a global catastrophe with inadequate preparedness, insufficient investment, and delayed mitigation,” they said. “The disruption, restrictions, economic damage and joblessness that we are witnessing now are a window into a future that fails to prevent the climate emergency from becoming an even greater climate catastrophe. There is no excuse for being taken by surprise: we know what is coming and we have for a long time.”

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