By Mar-Vic Cagurangan
In the past two years, a large number of young Micronesians have left their country in search of better economic opportunities that are scarce in the Federated States of Micronesia.
“Outmigration continues to be a major challenge; we saw, for example, more than 2,000 citizens permanently migrate from the FSM in 2020,” FSM President David Panuelo said in his state of the nation address last month. “I was surprised myself, and I didn’t believe it or want to believe it—and a further 2,500 citizens permanently migrate in 2021.”
He said the average age of citizens who are leaving the country is between 25 and 28. “Meaning that we are disproportionately losing our youth,” Panuelo said.
As of January, the FSM’s population was estimated to be 114,976.
According to the U.S. Department of the Interior, the FSM continues largely as a subsistence economy, except in larger towns where the economy is centered on government employment and a small commercial sector.
The cash economy is primarily fueled by government salaries paid by compact funds (70 percent of employed adults work in the public sector) and, to a much lesser degree, by family remittances and Social Security benefits paid to FSM citizens who previously worked in the United States or who are the surviving spouse of an American citizen.
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“I believe it is so important that our nation move forward with the FSM Skills & Employability Enhancements project,” Panuelo said.
Funded by the World Bank, the $17.7 million project is projected to see massive increases in vocational education programming across each of the nation’s four states.
The project also involves the construction of a vocational education school at the former PATS site in Pohnpei.
“This program improves access to vocational training to marginalized groups, such as girls, children with disabilities, and outer islands’ youth,” Panuelo said. “It will see the improvement of vocational curricula, inclusive of the training of teachers, upgrading of classrooms, supplies, and equipment; and the aforementioned vocational school itself will draw students from across Micronesia.”
Panuelo also proposed another measure to boost the FSM’s workforce performance by providing future investment and security for employees after retirement through a pension plan.
“The executive branch intends to include a proposed budget for a national pension plan for the fiscal year 2024, and this important topic is one that I encourage significant public discussion and debate on,” the president said.
Panuelo is also endorsing a minimum wage raise for each state. Each state has autonomy over wage policies.
“Frankly, if it were within the national government’s jurisdiction to do so, I would advocate for a national minimum wage,” he added. “So our citizens would understand that for the state salaries to be increased it has to be done with the respective legislatures in our four respective states.”
The FSM recently implemented a new law raising the salaries of government employees by 45 percent effective Jan. 1.
“This is likely to assist the government in retaining talent, as well as increasing productivity, creativity and service delivery, particularly as the salaries for public servants have been capped for several decades,” Panuelo said.
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