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Fishing revenue in FSM



Inside the Reef By Joyce McClure

The sale of fishing rights in the 1.5 million square miles of open ocean that surround the Federated States of Micronesia makes up 50 percent of the nation’s revenue.


Yet, 100 percent goes to the national government while the four states receive zero.


Among the eight proposed constitutional amendments put forth by the 4th FSM Constitutional Convention that adjourned last July is one titled “Revenue Sharing on Fishing Fees” that would amend Article IX, Section 2(m) of the Constitution “to provide that revenues derived from fishing fees are shared with the states.”


Under the proposed amendment, they “would be entitled to not less than 50 percent of the total fishing fees collected per year. Seventy percent of the amount would be divided among the states based on population and 30 percent would be divided equally among the states.”


The waters of the Western and Central Pacific Ocean produce 60 percent of the world’s tuna—a haul of nearly 3 million metric tons worth almost $7 billion each year, notes The Nature Conservancy.

The value of the FSM’s catching sector alone is around $330 million, states Roger Arnold, chairman of the National Oceanic Resources Management Authority’s board of directors, in his foreword to the FSM’s National Oceanic Fisheries Investment Policy 2021-2026.

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“Over 70 percent of this value is taken by foreign fleets that the FSM licenses to gain participatory rights in the harvest of tuna resources” in the nation’s exclusive economic zone (EEZ) of 1.15 million square miles, “the country’s most valuable natural endowment,” Arnold notes. “It is the third largest and one of the most productive tuna fishing grounds in the Western and Central Pacific region.”

The FSM’s Party Allowable Effort – the total number of fishing days allocated to a fishing enterprise – is its most valuable asset and can generate more than $70 million per year, Arnold adds.

In 2000, the four states sued the national government, arguing that they were “the underlying owners of the resources” in the country’s EEZ, and were “entitled to the net proceeds from all fishing fees” including interest that they believed “they should have received since 1979.”


The FSM Supreme Court disagreed, ruling that the national government was not required to share the fee revenues with the states.

The national government argues that tuna is what builds schools, pays teachers’ salaries, paves roads, and keeps hospitals open. Yet the schools are inadequate with limited resources and in desperate need of upgrading; teachers’ salaries and the minimum wage are extremely low; roads are dangerously in need of repair; and hospitals need to be upgraded, are critically understaffed, and nurses and doctors are underpaid. Those needs are now being addressed by grants from the U.S., the World Bank and Asia Development Bank and other benefactors.

So, what is the fishing revenue going toward?

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A report by Spiral Pacific states, “One big negative for the country is, although it has sole ownership of tuna stocks capable of a sustained yield of well over 100,000 tons per year, there is virtually no national participation in the harvesting of this valuable resource. The people of FSM receive no economic benefit from the whole process of harvesting, transport, distribution, and sale of the tuna. Inshore marine resources of the reefs and lagoons are harvested mainly for subsistence.”


Meanwhile, in addition to the ongoing deterioration of the islands, 41.2 percent of the population lives below the basic needs of the poverty line, according to the Household Income and Expenditure Survey conducted in 2013-2014.


But there are solutions if Congress approves the ConCon’s amendment recommendation and then works to rectify the distribution of its wealth.


Citizens of Saudi Arabia receive a basic income from the country’s oil revenues. The FSM states could do the same by sharing a portion of its fishing fee revenue with citizens who meet certain criteria in the form of a monthly check.


This type of basic income-sharing has the opportunity to bring the majority of citizens above the poverty line and filter through to the local economy.


In addition, matching grants from fishing rights revenue that match the COFA sector and other outside grants could go a long way toward solving the nation’s economic development problems. By earmarking a portion of the revenue to support aquaculture projects and businesses such as pesca-tourism, sea cucumber exports, giant clam nurseries and other ocean-related industries, entrepreneurism would flourish by using what’s readily available and part of every Micronesian’s heritage – the ocean and its rich resources – without endangering future sustainability.


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The fundamental challenge for fisheries, Arnold concludes, “is to translate its revenue generation efforts into creating broad economic benefits within the fisheries sector. This means it has to create employment opportunities, increase government tax income, bring in more foreign exchange, and basically expand the productive capacity of the domestic fishing industry to encourage increased domestic value added to the local economy.”


The ConCon’s proposed amendments will be on the ballot during a special election in July 2023. It’s up to the voters to vote “yes” and Congress to agree and then mandate the administration’s immediate plan of action.


World Tuna Day is May 2. That may be a good time for the voters to combine peaceful, educational demonstrations of support and letters delivered to their congressional delegations with their annual tuna fishing competitions and cooking demonstrations.


After a long career as a senior marketing executive, Joyce McClure traded the island of Manhattan for the island Yap as a Peace Corps response volunteer in 2016. She is now a freelance writer and photographer living in Guam. Send feedback to joycemcc62@yahoo.com



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