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But IMF warns outmigration poses threat

MELBOURNE, Australia (Radio Australia, Nov. 28, 2010) - The President of the Federated States of Micronesia (FSM), Manny Mori, has met a delegation from the International Monetary Fund (IMF) to discuss the economic outlook for the island grouping.

The IMF delegates, accompanied by a specialist from the Asian Development Bank, met Mr. Mori after travelling through Pohnpei and Chuuk earlier this month.

They reported that the FSM economy grew last year for the first time in three years, and that modest growth is expected to be reflected in figures for this year.

However they warned that steady [reductions] in Compact funds over the coming decade and outward migration will stunt growth.

They have urged the government to push ahead with tax reforms, spending cuts and efforts to boost the private sector.

[PIR editor’s note: According to a FSM Press Release, economist Pelin Berkmen said, "The IMF conducts these country assessments to help promote policies - such as tax reform for FSM - that they believe will contribute to sustainable development. The IMF can provide technical assistance and aid in drafting legislation; however, the IMF does not participate in long-term lending for any member country, only short-term lending for countries in a situation of crisis."]

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