Pohnpei, FSM – The government of the Federated States of Micronesia has invited their peer review team (from Republic of Marshall Islands, Samoa, Vanuatu and UNDP) under the Forum Compact to consider its national development planning, budgeting, public financial and aid management processes and systems.
In addition, the government also asked for a review of the enabling environment for private sector growth in FSM. FSM is the 9th Forum Island Country to undertake this process and FSM is the first country to ask specifically for a review of private sector development. The peer review team is currently in FSM to consult with national and state government representatives, the private sector, non-government organizations and development partners.
During consultations with the Forum Compact peer review team, the FSM private sector acknowledged government’s support so far but also called for more engagement between the country’s public and private sectors.
“With the formation of the FSM Association of Chambers of Commerce (FSMACC) in the past two years, there’s been an improvement in the engagement between the public and private sectors. The government now has a representative through the Association that it can hold national dialogues with on issues affecting the private sector,” said Mr Herman Semes, a board member of the FSM Association of Chamber of Commerce during consultations with the peer review currently being conducted under the Cairns Compact on Strengthening Development Coordination (Forum Compact) in the FSM. The regional Pacific Islands Private Sector Organisation (PIPSO) had also initiated a public-private partnership dialogue in 2011 in Micronesia which has resulted in a meaningful engagement between the government and the private sector particularly in the areas of transportation, communication and lowering the cost of doing business in the FSM.
“In the area of policy formulation, the FSM government continues to work with FSMACC. The Association is invited to attend state and national leadership conferences to exchange views with state and national government leaders on private sector issues,” said Mr Semes
Mr Semes explained: “The difficulty comes when the agreed policies are implemented. We don’t see much implementation taking place especially toward the development of the private sector. This is because of the make-up of the government in FSM with four states and one national government. When a policy is approved for implementation at the national level, the implementation is very much left to the states.”
He said that the FSMACC is grateful for the assistance from the FSM government in providing seed money for the formation of the Association. The government has provided US$67,000.00 annually to assist the Association. He further acknowledged the need to strengthen the institutional capacity both for the national and state chambers of commerce
“This is the third year of existence of the FSMACC and we’re grateful for this assistance from the national government. We are asking the states to do likewise to strengthen the state chambers of commerce.”
Mr Semes pointed out that “what the private sector in the FSM needs to do now is to come together and develop a private sector development strategy to address issues such as foreign investment, land tenure, government capital lending institutions and all the other important things to spur private sector development in the country. Then we can go to the government and tell them what areas the private sector needs assistance with.” “I always like to think of the private sector as the engine of growth which needs a good operator and oil to lubricate the various parts of the engine. Likewise the government needs to provide an environment conducive for the growth of the private sector. It needs to provide incentives and assistance that would bring together partnerships between local and foreign investors.”
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