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FSM OK’s economic stimulus package

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PALIKIR, Pohnpei (FSM Information Services) — On April 22, 2020, David W. Panuelo, president of the Federated States of Micronesia, signed Public Law 21-105, which temporarily diverts funding from the FSM’s fishing access fees and from revenue derived from major corporations to the Economic Stimulus Package (as opposed to the FSM Trust Fund).

The $15 million Economic Stimulus Package is the largest single stimulus of its type in the FSM’s 41 years of constitutional government.

This public law funds the bulk of the Economic Stimulus Package, which is presently focused on the tourism sector vis-à-vis the Tourism Sector Mitigation Fund. This release will focus on how the Economic Stimulus Package came about and how it presently operates, the executive branch’s intentions for the fourth regular session of the 21st FSM Congress in May 2020 as it relates to the Economic Stimulus Package, and how businesses can apply for, and receive, financial assistance.

During it session in March, the FSM Congress, much to President Panuelo’s applause, developed the Tourism Sector Mitigation Fund —including approximately $1 million of financial assistance to the tourism sector.

The public law also established an oversight committee for the fund, chaired by the secretary of Finance, with members including the secretaries of the Department of Justice, the Department of Resources & Development, and the Department of Environment, Climate Change, & Emergency Management.

This was developed at a time when Covid-19 was not yet identified as a global pandemic and when the most affected sector of the FSM economy was in the tourism industry, which had affected the states of Yap and Chuuk disproportionately compared Pohnpei and Kosrae, to include temporary closure of some of the FSM’s most prestigious and recognized hotels.

As the nature of the threat posed by Covid-19 continued to evolve and it became clearer to the president and the Congress that the economic impacts could be more involved and with a longer and deeper impact on the economy, the FSM began working on the Economic Stimulus Package which would allow the FSM National Government to process wage subsidies, debt relief, and gross revenue tax and social security tax rebates for affected businesses. Most recently, this led to President Panuelo and the FSM Congress working to divert funding originally intended for insertion into the FSM Trust Fund to fund the Economic Stimulus Package.

“The intention of the Economic Stimulus Package is to ensure the continued prosperity of the [FSM] and its citizens during these unprecedented times,” President Panuelo said in a statement. “I give credit to Speaker Wesley Simina and the members of the 21st FSM Congress for their collaborative spirit on this package, and for their enthusiastic dedication toward serving the needs of our citizens. I also acknowledge the significant and timely delivery of financial assistance from the [Asian Development Bank] to support [our] Economic Stimulus Package.”

FSM citizens presently employed by, or owning, businesses designated as part of the tourism sector through the Tourism Sector Mitigation Fund are currently able to apply for benefits through the FSM Economic Stimulus Package.

They are encouraged to obtain the wage subsidy assistance application form by visiting http://www.dofa.gov.fm/support-to-businesses

 

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