Micronesian Economic Development and Capital Improvement Activities

Testimony was given on a GAO report which concluded that the Micronesian Governments lack the capability to plan, implement, and monitor public sector programs and services on their own and have not identified the technical assistance that they need. GAO recommended that, before the Trusteeship is terminated, the Department of the Interior should: (1) conduct assessments of Micronesian technical assistance requirements; (2) identify what technical assistance can be provided by the Federal Government, international organizations, and the private sector; and (3) develop an action plan for technical assistance. GAO found that Interior has neither completed a listing of technical assistance sources nor developed an action plan. Under the proposed Compact of Free Association, while the Micronesian Governments will assume the authority and responsibility for their internal and foreign affairs, the United States will provide economic assistance through grants for economic development projects, capital improvements, and government operations. The compact calls for an official economic development plan from each government involved. These plans should be scrutinized by the U.S. Government to ensure that adequate provisions are made to obtain the technical assistance and training necessary to implement and monitor the programs. GAO has found that the Micronesian Governments face serious obstacles to becoming self-sufficient and, although the United States has invested over $400 million in Micronesian capital improvements since 1966: (1) the goals of the capital improvement program have never been clearly defined; (2) there appears to be little linkage between infrastructure development and a comprehensive economic development program; (3) infrastructure development efforts in Micronesia have been undertaken without much attention being given to whether revenues will be available to support them; and (4) many completed projects have not provided intended services. While the Micronesian Governments contend that their 5-year capital improvement program was underfunded, GAO was unable to determine how much it would cost to satisfy minimal needs or whether money provided by the compact will meet future requirements.