2011年-IMF国际货币组织全球_Federated_States_of_Micronesia_2010_Article_IV_Consultation_47页_1mb

Summary of the 2010 Article IV Consultation with the Federated States of Micronesia

Core Content

The 2010 Article IV Consultation with the Federated States of Micronesia (FSM) focused on securing a sustained economic recovery and achieving long-term fiscal and economic sustainability. The consultation was conducted by the IMF staff in November 2010, with the final report completed in December 2010. The discussions included the fiscal and structural policies necessary for economic recovery, the impact of the Compact of Free Association, and the challenges of external stability and private sector development.

Main Points

Economic Recovery and Outlook

• The FSM economy had recovered slightly from a long period of contraction, growing by 0.4% in FY2009 due to infrastructure projects, increased subsistence agriculture, and the reopening of a freezing plant in Kosrae.
• Fiscal balance improved, with a surplus of 1.6% of GDP in FY2009, but this was not uniform across all states.
• Inflation slowed to 3.5% in FY2010, driven by moderating food and fuel prices.
• Current account deficits widened in FY2009, mainly due to high fuel prices and infrastructure-related imports.
• Growth is expected to remain weak in the near term due to declining Compact grants and limited private sector activity.

Fiscal Sustainability

• The Compact Trust Fund (CTF), which provides critical financial support, has experienced significant investment losses and is expected to generate insufficient revenue to maintain government operations after FY2023.
• Long-term fiscal sustainability requires a medium-term surplus of 5.25% of GDP by FY2015, with the goal of reaching 5.8% of GDP by FY2023.
• The fiscal adjustment is expected to be difficult, particularly due to coordination challenges between national and state governments, and political pressures from upcoming elections.

Challenges and Reforms

• Tax reform is a key policy priority, with tax reform bills submitted to Congress. However, implementation is slow due to coordination issues and political delays.
• The public sector wage bill is high, with public wages significantly exceeding private sector wages.
• Structural reforms are needed to reduce public sector dependence, improve tax administration, and attract foreign direct investment (FDI).
• Social security liabilities are substantial, at $232 million (89% of GDP), and require continued monitoring and reforms to address long-term sustainability.

Exchange Rate and External Stability

• The real effective exchange rate has appreciated by 9% since the global financial crisis, raising competitiveness concerns.
• The U.S. dollar remains the legal tender and is appropriate for the FSM due to its economic size and external dependence.
• The exchange rate system is free of restrictions on current international transactions.

Financial Sector

• The banking sector is liquid but contributes little to economic growth.
• Activities of public development banks and credit unions are not regulated and should be supervised by the Banking Board.
• Insurance supervision has been separated from banking, but capacity is inadequate, especially in captive insurance.

Key Documents

• Staff Report: Outlines the economic background, fiscal and structural policy analysis, and recommendations for the FSM.
• Public Information Notice (PIN): Summarizes the Executive Board's views on the staff report.
• Statement by the Executive Director: Provides the FSM government's perspective on the consultation.

Critical Recommendations

Fiscal Policy

• Implement a multi-year fiscal consolidation plan with clear targets for public wages and administrative spending.
• Reduce current expenditures and public sector employment to offset the decline in Compact grants.
• Strengthen tax administration, improve audit processes, and increase tax revenues through the Unified Revenue Authority (URA) and VAT introduction.
• Avoid premature increases in public sector wages and ensure fiscal discipline to prevent future debt burdens.

Structural Reforms

• Harmonize FDI legislation across states to attract foreign investment.
• Improve public sector efficiency by addressing procurement issues, land title problems, and project planning.
• Develop a national energy policy to manage volatility in commodity prices.
• Enhance coordination between national and state governments to improve implementation of fiscal and structural reforms.

Social and Economic Policies

• Social security reform is needed, with increased tax rates and reduced benefits for retirement before 65.
• Encourage local production to reduce import dependence and promote private sector development.
• Strengthen public communication and community consultation to ensure broad support for tax reform and fiscal adjustments.

Conclusion

The FSM is at a critical juncture in its economic and fiscal development. While some progress has been made in fiscal adjustment and tax reform, implementation challenges remain. The transition to self-sufficiency after the expiration of the Compact grants will require sustained fiscal discipline, structural reforms, and improved coordination across states. The IMF staff emphasized the need for swift action to enhance fiscal sustainability and promote private sector growth, which are essential for long-term economic development.