A Guam Business series for 2018 providing assets and data for Micronesia
Kosrae and Pohnpei are member states of the Federated States of Micronesia. The FSM was formerly part of the Trust Territory of the Pacific Islands, which the United States administered on behalf of the United Nations from 1947 to 1978. The FSM adopted its own constitution and became an independent country in 1979. It entered into a Compact of Free Association with the United States in 1986 and became a United Nations member in 1991. The Compact’s financial terms were renegotiated in 2004, calling for the United States to provide about $100 million to the FSM between 2004 and 2023.
Kosrae, the easternmost island of the FSM, covers an area of about 42 square miles, with steep mountains and a dense jungle interior. The island produces fruits such as taro, breadfruit and oranges and features deposits of bauxite and guano. Kosrae’s international airport is located on the northern side of the island at Okat.
Pohnpei, which lies directly west of Kosrae, is home to Palikir, the FSM capital. The 129- square-mile island is hilly and surrounded by a barrier reef. The state of Pohnpei includes the main island of Pohnpei as well as eight low-lying atolls that surround it: Oroluk, Pakin and Ant to the west; Sapuafik, Nukuoro and Kapingaramangi to the southwest; and Mwoakilloa and Pingelap to the east. Pohnpei International Airport is located on Deketik, a small lagoon islet connected to Pohnpei Island by a mile-long causeway. A popular tourist attraction is the Nan Madol ruins, which are the remains of an ancient city built upon a coral reef. The city served as the Saudeleur dynasty’s seat of power for about 500 years and is said to have inspired the city of R’lyeh in H.P. Lovecraft’s story “The Call of Cthulu.”
The economy of the FSM has traditionally been driven by subsistence farming, fishing and the government. Employment statistics from 2016, however, show that the wholesale, retail and repair industries have taken prominence in the private sector. Close behind are the transportation, storage, communications and hospitality industries.