President Panuelo Discusses Compact Impact, Foreign Investment, & Regional Tourism with the Honorable Lou Leon Guerrero, Governor of Guam

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President Panuelo Discusses Compact Impact, Foreign Investment, & Regional Tourism with the Honorable Lou Leon Guerrero, Governor of Guam

PALIKIR, Pohnpei—On January 14th 2020 His Excellency David W. Panuelo, President of the Federated States of Micronesia (FSM), received the Honorable Lou Leon Guerrero, Governor of the U.S. Territory of Guam, in a courtesy call. The Governor was visiting the FSM to attend the Joint Inauguration of the FSM State of Pohnpei’s Leadership, and for other matters. The purpose of the meeting between President Panuelo and Governor Leon Guerrero was to follow-up on issues discussed in the 24th Micronesia Islands Forum (MIF) held in the FSM State of Chuuk in July 2019, and to broadly discuss negotiations for the Compact of Free Association (COFA), as Amended.

“Thank you for coming to Pohnpei to join in the celebration of the Inauguration of the [Pohnpei State] administration,” President Panuelo began. “And of course, Governor, the Nation continues to thank you and the people and Government of Guam for hosting our citizens.”

After discussing subjects of mutual interest, the conversation quickly moved to the topic of Compact Impact, which is funding the U.S. Government appropriates to Guam, the Commonwealth of the Northern Mariana Islands (CNMI) and the U.S. State of Hawaii to assist local governments in dealing with FSM citizen migration-related matters. Governor Leon Guerrero emphasized that the Compact Impact funding is critical to Guam and other U.S. regions with high populations of FSM citizens on the premise that the funding augments and supports crucial public services, including healthcare and education services.

To the knowledge of the FSM National Government, Compact Impact funding is presently capped at a ceiling of thirty million dollars ($30,000,000) per year to the U.S. Territory of Guam. Governor Leon Guerrero advised that Guam’s hospital spends approximately thirty million dollars each year on non-U.S. citizen healthcare services alone (although that figure was advised to include not only FSM citizens, but all citizens from other countries who receive care in Guam).

“We believe,” President Panuelo said, “That thirty million cap is not adequate to respond to the [COFA Impact] costs by citizens in [Guam, the CNMI, and Hawaii]. The focus should be to work with members of the U.S. Congress to increase those appropriations of the COFA Impact.” Although the FSM National Government is sensitive to the needs and concerns of U.S. Territories and States with regards to the COFA Impact, it is the view of the Government that, in order to ensure a sustainable and successful process for both the COFA negotiations between the FSM and the U.S., and the COFA Impact discussions internally in the U.S, the two processes remain separate.

The conversation then shifted to the notion that, since FSM citizens who emigrate typically do so out of a perceived lack of economic opportunity at home, part of the answer to the question of retaining both talent and tradition must lie in building opportunities for citizens. Governor Leon Guerrero spoke at length about how Guam’s private sector is profoundly interested in investing in and partnering with the FSM and wondered whether there was any movement on enhancing the Nation’s foreign investment climate.

“[Historically] the FSM States have wanted to have their own focus on foreign investment,” President Panuelo began, “but this an area that I believe the Nation must really be united on. The Nation will benefit from an umbrella investment climate and set of laws that are complementary with one another, and that’s why at the next FSM State & National Leadership Conference (SNLC) this will be a priority agenda item.”

There is proposed legislation on foreign investment that the FSM Congress has reviewed, and that is contemporaneously being reviewed by the FSM State Governments. It is the hope of the FSM National Government’s Executive Branch that the next SNLC will discuss this proposed legislation in depth, with the aim of achieving a Nation-wide consensus that the proposed legislation will incentivize growth and work seamlessly with other proposed legislation, such as the FSM Petroleum Corporation/Vital Transformation Act which the FSM National Government’s Executive Branch is hopeful that the 21st FSM Congress will vote to endorse.

Continuing on the subject of economic development, and particularly how it relates to the 24th MIF’s Joint Communique, Governor Leon Guerrero described Guam’s ongoing work with the FSM to grow the Micronesian cruise industry. The Governor noted with enthusiasm that cruises that serve approximately 250-450 passengers would fill a particular tourism niche, and advised that she has made an Executive Order to form a committee dedicated to the task of growing the cruise industry in the Micronesian subregion.

The meeting ended on a positive note, with President Panuelo and Governor Leon Guerrero reaffirming the close friendship between the FSM and Guam.

“You’re very pro-Micronesian, all of us are,” President Panuelo said. “Our doors are open any time you want to talk, whether it’s in the context of the MIF or any other, so we can find solutions to issues that both of our Governments need to continue work on.”

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