1. D EPARTMENT OF R ESOURCES &
E CONOMIC A FFAIRS
Quarterly Newsletter 1st Quarter Issue, FY2012
1 ST Q UARTER I SSUE , FY2012 T EL : (691)370-2044/3017 dres@mail.fm
KAPIT C ONCLUDED I TS W ORK ON M AJOR R EFOR M M EASURES
Kosrae Adjustment Pro- commitment to amend Kos- to revive Reduction-in-Force and economic condition of the
gram Implementation Team rae State Constitution with Program; (iii) enact legisla- State. The total adjustment re-
(KAPIT) created by Gover- the following: (i) reduce size tion to establish non-citizen quirement is for Kosrae to make
nor Executive Order and of the legislature from 14 employee registration and adjustment of over $537,000 by
chaired by Director Steven members to 10; change reve- training to citizen work- FY 2013 and $1.2 million over
L. George submitted all nue sharing between state force; (iv) enact legislation the remaining period of the
nine (9) KAPIT measures and municipal governments to increase vehicle registra- Compact. These adjustments
to Governor Jackson for from 50/50 to 70/30 with tion fees; (v) enact legisla- are necessitated by impact of
review and appropriate the higher share going to tion to introduce a General Compact decrement; the need
actions . Two of the meas- state. Sales Tax; (vi) enact legisla- for state to service its debt; and
ures which were submitted tion to increase and expand finally the need to accelerate
Seven measures submitted in
earlier were transmitted to seaport and navigation fees; Infrastructure maintenance pro-
February 2012 by KAPIT
legislature for its action. and (vii) enact legislation to jects.
involved the following: (i)
The remaining 7 measures increase airport departure
enact new legislation requir- With assistance of Attorney
are now with Governor fee.
ing payment of royalty and Harry Seymour, the work of
Jackson to review and make
research fees for those in- It is important to note that KAPIT had been significantly
determination.
volved in harvesting and all these recommendations enhanced on the part of re-
Two measures submitted in studying Kosrae s natural were made by the April search, analysis and drafting.
December 2011 by KAPIT resources and indigenous 2011 Kosrae Leadership
involved Kosrae leadership culture; (ii) enact legislation Conference to enhance fiscal
M R . R OLPHY M ONGKEYA R ECOGNIZED AS 2011 DREA E MPLOYEE OF THE Y EAR
Like other departments of the state performed his or her duties during
government, the Department of the year.
Resources and Economic Affairs
Mr. Rolphy Mongkeya, the Livestock
holds an annual social event at the
Supervisor for the Division of Agri-
end of the calendar year every year.
culture and Lands, was recognized by
DREA held its event on Thursday,
many, including his superiors, as an
December 22.
outstanding employee who had done
As it can be understood, the pur- an exceptional job. As so, Mr. .
poses of such event are many. Aside Mongkeya was fittingly recognized as
from the obvious reasons of holding the 2011 DREA Employee of the
such event in celebration of the end Year. With the presence of Governor
of the calendar year or, as a unified Jackson - along with other honorable
group, celebrating and sharing the dignitaries - and DREA employees as
holiday seasons with coworkers and well as their families Mr. Mongkeya
their families, DREA held the event accepted a certificate in recognition of Rolphy Mongkeya, 2011 DREA Employee of
also to recognize and honor the his outstanding work during the year. the Year
model employee that diligently

2. P A GE 2 D EPARTMENT OF R ESOURCES & E CONOMIC A FFAIRS
K OSRAE R EPRESENTED IN G UAM M ICRONESIAN I SLANDS F AIR
The State recognizes that promotion products; and generally increased aware- delegation was promoting were Kosrae
and trade of locally produced Kosrae ness of the State, the people and the Kos- peppered salt, sakau, Kosrae hot sauce,
products and of Kosrae itself is a viable raean culture as designees represented locally produced chips, and a few oth-
means of strengthening economic activ- the various departments, agencies, or ers. The delegation was able to perform
ity for the State of Kosrae. With decent groups mandated to perform each of the a traditional Kosraean item that was
exposure to regional as well as the in- aforementioned tasks. Designees repre- well received by the event.
ternational arena, the Guam Microne- sented, in no particular order, DREA
As stated by the delegation in their re-
sian Islands Fair was an ideal opportu- (Division of Trade & Investment); Kos-
port, the fair provided an opportunity
nity for the State of Kosrae to expand rae Visitor s Bureau; Kosrae Women s
to prove the potential products Kosrae
on its promotional efforts. Association; Kosrae Farmer s Associa-
can export to outside markets. As also
tion; Kosrae Chamber of Commerce;
Kosrae took advantage of the opportu- logged in their promotional sales re-
Kosrae State Legislature; Land Grant
nity as designees from various state de- cord, as much as $4,761 worth of prod-
Program, COMFSM, Kosrae; and the
partments, agencies or groups repre- ucts was sold in just half a day. With
municipal governments. In total, eight-
sented Kosrae in the fair. Kosrae was Kosrae and locally produced products
een (18) designees represented Kosrae to
able to promote its tourism industry; effectively promoted and represented in
the GMIF.
advertise its foreign investment oppor- the GMIF, Kosrae participation in the
tunities; promote locally produced Among a lengthy list of products that the GMIF can be deemed a success.
E CONOMIC P LANNING H IGHLIGHTS IMPLICATIONS OF T RANSPORTATION ISSUES IN
F IRST P UBLICATION
The Division of Economic Planning re- tanker vessel than frequents Kosrae on a in means of transportation could lead to
cently released its first publication in the regular basis. As implied by the few adverse impact on Kosrae s tourism
form of an economic brief. Planning s aforementioned means of transportation industry, specifically the number of
first quarter economic brief focuses on to and out of Kosrae, an existing issue visitor arrivals to Kosrae, and therefore
the economic implications of transpor- for Kosrae is the lack of airline flights to adversely impacting state revenue gen-
tation issues in Kosrae; specifically, the and from Kosrae, as well as limited cargo erated through visitor or tourist spend-
limitations in the means of intra and capacity to facilitate the State s ambition ing; impeding efforts to strengthen ex-
international transportation. for greater economic activities; particu- port of local products within the region
larly in tourism and the trade of marine and internationally, while bypassing a
As reported in the publication, limita-
and agricultural products. More specifi- potential avenue for decreasing the state
tions to intra and international means of
cally, the lack of capacity to facilitate trade deficit and potential improvement
transportation is an impediment to
potential products going out of Kosrae is to balance of payments.
growth and as so, identifying and apply-
deserving of attention and timely solu-
ing viable remedies is essential for the Adverse impact was felt by Kosrae s
tions.
economic betterment of the state. tourism industry as the lone medium of
Based on FY2010 records, Kosrae had air transportation to Kosrae reduced its
Kosrae at present, employs adequate
seventy-nine (79) airline vessel arrivals service by, on average, twenty-seven
transportation infrastructure with an
and eight (8) cargo vessel arrivals on the (27) fewer flights per quarter.
international airport servicing domestic
quarterly average. However, the second
and international flights, and two (2) Table 1 shown on page 3 shows the
to fourth quarters of FY2011 showed a
seaports servicing cargo liners along count of international arrivals to Kosrae
decrease in the quarterly average with
with other types of vessels. Improve- during fiscal years 2008 to 2011. The
fifty-two (52) arrivals a quarter, a differ-
ments to the current transportation table indicates that during the first quar-
ence of twenty-seven (27) fewer flights
infrastructure, particularly Kosrae s ter of FY2011, Kosrae had 520 interna-
between the two periods. The decrease
international airport, are in line for the tional arrivals compared to a 464 quar-
occurred primarily due to the reduction
near future to enhance airline and sea- terly average for the 2nd, 3rd and 4th
in number of flights put in effect starting
port services. Kosrae is presently ser- quarters of FY2011 subsequent to the
January, 2011.
viced by one commercial passenger air- reduction in number of flights to Kos-
line, one (1) cargo liner and one (1) Economic implications of the limitations
Cont d on page 3...

3. 1 ST Q UARTER I SSUE , FY2012 P A GE 3
...cont d from page 2: Planning Substantial effort is being put into Kosrae. However, given its current
rae. Per the foreign arrival counts indi- strengthening export of Kosrae products state, the means of transportation as it is
cated in the Table 1, Kosrae realized - specifically, marine and agricultural will continue to be an impediment to
over 10% decrease in foreign arrivals, products - as well as actively promoting positive growth. Addressing the current
reflected in FY2011 2nd quarter arri- Kosrae through various avenues of expo- state of the means of intra and interna-
vals and those of the ensuing quarters as sure. Grassroots programs are established tional transportation would be one step
well. with the intent of strengthening and sus- in the right direction toward orchestrat-
taining positive growth for the state of ing an economy of robust growth.
Kosrae has long been under unfavorable
balance of trade with levels of imports Table 1: Kosrae Arrivals (FY2009 - FY2011)
exceeding the level of export by a sig-
nificant margin. The quantities of prod- FY2009 FY2010 FY2011
ucts imported and exported depicts Period Arrivals Percent Arrivals Percent Arrivals Percent
Kosrae s trade imbalance. Per import 1st Quarter 436 23.5 433 21.6 520 27.2
and export averages for FY2008 through 2nd Quarter 466 25.1 512 25.6 462 24.2
FY2011, Kosrae imported 584,915 3rd Quarter 393 21.1 534 26.7 456 23.8
pounds of goods as opposed 21,913
pounds of goods exported during the 4th Quarter 564 30.3 524 26.2 475 24.8
same period. Total 1859 100.0 2003 100.0 1913 100.0
K OSRAE M ICROFINANCE U NION C ONTRIBUTING TO K OSRAE E CONOMY
Increasing access, level and flow of de- under DREA had been spearheading the loan in FY2011. To date, KMU had
velopment financing goes in support of effort to increase access, level and flow of disbursed fifty-two (52) loans with a
DREA s overall mission and in support development financing, particularly in total amount of $51,487 disbursed.
toward development of an outward- business and financing. KMU had taken Forty (40) KMU funded projects cur-
oriented private sector-led economy. substantial steps in the positive direction. rently remains in operation, positively
Microfinance loans were intended to contributing to the state economy.
KMU had financed a variety of small busi-
combat income poverty in the State by
nesses: piggery projects, ice shops, bak- Furthermore, according to KMU Ex-
lending to individuals and/or groups to
ery/baked goods sales, retail shops, sales ecutive Manager Kiaru Esahu, nine (9)
invest in and develop their skills to sus-
of curing water, bedding clinic, repair applications were received during the
tain a significant flow of income, and
services, small loans, among others. KMU first quarter of FY2012 and are awaiting
thus alleviating economic hardships.
had approved twenty (20) microloans av- the final approval and screening process.
Kosrae Micro Finance Union (KMU) eraging one thousand dollars ($1,000) per Screening and
Cont d on page 5...
E XPORT B RINGING N EW M ONEY TO K OSRAE E CONMY
Export of Kosrae farm produce is the Marshall Islands. Shipments of crops the quantity of products exported, a
among the grassroots programs the De- like cucumber, tangerine, eggplant, sugar total of $4,654.22 (or an average of
partment of Resources and Economic cane, watermelon, and a few others are $1,551.41 per month) of new money
Affairs continues to operate or involve supplied to various buyers on a weekly ba- is added to the Kosrae economy.
in. The Division of Trade & Investment sis.
With ongoing shipments facilitated to
under DREA - and with close collabora-
Seven (7) shipments of Kosrae produce buyers in the RMI on a consistent ba-
tion from the Kosrae Farmers Associa-
were made during the first quarter of sis, the export effort is anticipated to
tion and the Division of Agriculture &
FY2012 (October, November & Decem- be expanded to include shipments to
Lands, among others - facilitates ship-
ber). During the mentioned three months, potential market for Kosrae products
ments of Kosrae agricultural products
a total of 5,385 pounds of Kosrae products in Pohnpei. Continued expansion and
on a weekly basis.
supplied by farmers island-wide was ex- success of the export effort is vital to
A number of buyers were identified and ported to buyers in the RMI at an average Kosrae s ambition of achieving sustain-
regularly supplied from the Republic of of 1,795 pounds exported per month. With able growth of per capita income.

4. P A GE 4 D EPARTMENT OF R ESOURCES & E CONOMIC A FFAIRS
F ISHERIES & M ARINE R ESOURCES E STABLISHING FAD S YSTEM
A FAD system is a concept that is most as two (2) tons, or two-thousand (2000) juvenile fish that aggregates around the
likely to be favorable to the fisherfolks pounds. FADs, acronymic for Fish Ag- floating object, creating an ideal fishing
on the island. As one of its major activi- gregating Devices, are to be deployed area. A network of man-made floating
ties scheduled for FY 2012, the Division and located at a number of locations objects functions in a similar fashion. As
of Fisheries and Marine Resources un- island-wide: Utwe (Mosral to Inokas- FADs are deployed in selected locations
der DREA is set to establish a FAD sys- rik), Walung (Sauksa), Tafunsak island-wide, schools of fish are antici-
tem that would substantially aid fisher- (Malsu) and a fourth location to be later pated to be abundant around the FAD
men on the island in their fishing activi- determined. locations creating ideal fishing spots for
ties. fishermen. As further explained by Fish-
Conceptually, the FAD System works
eries Extension Officers, types of fish
The FAD System is made up of a num- similarly like floating logs or objects in
expected around these FAD locations
ber of fish aggregating devices. Funded the ocean. As can be understood, there
range from small fry types to big fish;
by a Japan Grassroot Grant in the is a natural tendency for fish to aggre-
i.e. Marlin.
amount of $64,311, the FAD project is gate around floating objects. Floating
designed to include four (4) anchors; objects provides a seemingly form of The FAD System is expected to posi-
three concrete anchors and one smaller protection for juvenile fish against larger tively impact the fisheries sector. As can
anchor made of an engine block. As predators in the open sea. As floating be understood, the FAD System is ex-
explained by one of the Division s Fish- objects attract schools of juvenile fish, pected to considerably aid in reducing
eries Extension Officers, each of the larger fish on the upper echelon of the the cost of fishing for fishermen. Aside
three concrete anchors weighs as much food chain are innately attracted to the
Cont d on page 5...
P ILOT F ARM P ROJECT U NDERGOES S ECOND T RIAL
In support of DREA s mission of achiev- variety of vegetable crops, some of
ing sustainable growth of per capita which are new to Kosrae and had never
income and in effort to alleviate the been produced on a consistent and pro-
economic struggles of the Kosrae popu- ductive basis. These types of crops in-
lace, the Division of Agriculture & Land clude cucumber, watermelon, bitter-
had been and still continues to explore melon, tomato, bell pepper, eggplant,
ways of achieving the stated goal pulp onion, carrot, among others. From
through agricultural production. With his experience from the farm project,
the direction of Mr. Katsu Nishikawa, a Mr. Nishikawa identified carrot and
technical cooperation specialist from the pulp onion crops as the most challeng-
Japan International Cooperation Agency ing to plant and produce. At present,
(JICA), the Division of Agriculture and the pilot project is undergoing its sec- Katsu Nishikawa working on 2nd trial farm plot
Land had been engaged in a trial farm ond trial with the initial trial completed.
project which plants a variety of vegeta-
According to Mr. Nishikawa, the first
ble crops.
trial of the farm project yielded both
Mr. Katsu Nishikawa, had been spear- satisfactory and unsatisfactory results.
heading the pilot farm project with the Some results were deemed satisfactory
assistance of the Agriculture & Land in that trial vegetable varieties yielded
Crop subdivision staff. With the under- good produce. On the contrary, as Ni-
standing that agriculture production is shikawa highlighted, trial project en-
utilized primarily for subsistence pur- countered a number of challenges that
poses, Mr. Nishikawa states that the affected the outcome of the first trial.
overall objective of the trial farm pro- Some challenges Mr. Nishikawa was
ject is to eventually commercialize Kos- able to identify were the adequacy of
rae agricultural production. fertilization, weeding and even adverse
impacts from pests like Giant African
In support of the project objective, Ni- Nishikawa (left) and Marson Jonas (right) working
Snails and mice.
shikawa is planting in his pilot farm a
Cont d on page 5... on plowed farm plot

5. 1 ST Q UARTER I SSUE , FY2012 P A GE 5
P LANNING IN DARW W ORKSHOP ...cont d from page 3: Microfinance
final approval of proposed Division of Trade & Invest-
The Division of Statistics drafted and written in more microloans is vested under ment, respectively.
under SBOC, FSMNG held relevant language and more the discretion of the Kosrae
the Data Analysis and Re- so in perspective easily under- According to KMU Execu-
Microfinance Union Board.
port Writing Workshop on stood by the ordinary census tive Manager Esahu, KMU
September 13 to October 7, user. KMU Board consists of four had disbursed its previous
2011. Reverend Madison representatives from each fifty-two approved loans in
Participants were able to en- municipality and two ex- seven batches; approxi-
Nena and Palikkun Kilaf-
hance their data analysis skills officio members represent- mately seven applicants in
wasru participated in the
with training from DARW ing the heads of the Division each batch. Furthermore,
workshop on behalf of
Workshop staff in various of Trade & Investment and KMU Board is scheduled to
DREA.
methods of analyzing and its mother department, the meet in the near future to
The DARW Workshop was interpreting large data sets, Department of Resources & carry out the final screening
intended to involve respec- particularly through the use of Economic Affairs. Board and approval process for the
tive census users in all levels MS Excel applications. Addi- officers and members are as eighth (8th) batch where
of government in the process tionally, participants were follows: President Morgan Mr. Esahu is hoping for con-
of generating a census re- also able to expand on their Jonas, Malem; Vice Presi- sensus approval of microloan
port; particularly, in the repertois of report writing dent Weston Luckymis, applicants. Moreover, when
analysis of census data and skills with the additional Lelu; Secretary Treasurer asked what types of business
preliminary drafting of the training on methods of report Mackenzie Waguk, Utwe; projects can be funded by
census report. Workshop writing provided by work- member Jonah Nena, Tafun- KMU, Mr. Esahu responded
participants represented shop staff. As fellow partici- sak; ex-officio members by stating that all projects
various departments and pants of the DARW Work- Director Steven George and that can generate revenue
agencies from states and the shop, Mr. Kilafwasru and Mr. Stanley Raffilman sitting in will be granted considera-
national government. By Nena acknowledges that such on behalf of DREA and the tion.
involving census users, skills obtained from the work-
SBOC anticipated a more shop is indeed instrumental to ...cont d from page 4: FAD of fish is expected to eventu-
relevant census report in their daily duties and deems from the obvious reason of ally decrease. In such event,
that the report would be the workshop a success. providing easier catch for any decrease in price - in this
fishermen, as schools of fish case, price of fish - would
...cont d from page 4: Pilot Farm benefit the consumer.
are aggregated and concen-
With consideration of first the same crops from the first
trated in marked locations, The mentioned benefits to
trial outcomes, Nishikawa trial.
fishermen would be able to both suppliers and consum-
and his assisting staff under-
Additionally, in efforts to concentrate their fishing ers of fish could be realized
goes the second trial with a
combat the challenges to the activities within or around in the near future as the
number of adjustment to the
trial farm, Nishikawa ac- these locations. In such completion of the FAD Sys-
trial project.
knowledges that an improved event where fishing activities tem s is expected for as early
The second trial of the pro- plantation schedule (when are concentrated in a few as March, 2012. With the
ject includes a substantially and how to plant) would be locations, as opposed to assistance of a FAD Systems
reduced number of crop substantially instrumental in roaming in open waters in Specialist from the Secre-
types. Based on the first trial combating the aforemen- search of the suitable fishing tariat of the Pacific Commu-
outcomes, it was thought tioned challenges. locations, the amount of fuel nity (SPC), Fisheries staff is
suitable to concentrate the required for a particular scheduled to compete the
Should the pilot farm project
second trial effort on a fishing activity would be deployment of FAD anchors
succeeds, Nishikawa antici-
fewer number of vegetable substantially reduced. Not on March 4. However, the
pates the State to make sub-
crops, in part due to the only the fishing community FAD System would take up
stantial effort to promote the
desire to identify the varie- could benefit from a FAD to two months to attract
crops to the community
ties of vegetable crops most System but consumers in the schools of fish and be fully
where, hopefully, Kosrae
suitable to the farming envi- fish markets could as well. effective as a means of aggre-
farmers would initiate plant-
ronment in Kosrae. As so, As catch becomes easier and gating fish and becoming a
ing of these crops with the
the second trial farm in- the market realizing increas- tool for fishermen.
intend of eventually commer-
cludes different varieties of ing abundance of fish, price
cializing their produce.