Micronesia - Economic sectors

Economic activity in Micronesia consists primarily of subsistence farming and fishing as well as revenues from external licensing (the U.S. government, for example, makes a fixed payment to the Federated States of

Micronesia for exclusive access to its waters). In the financial year ending September 30, 1997, fees from fish-eries licensing agreements, mainly with Japan, contributed some 30 percent of domestic budgetary revenues.

The islands have no mineral deposits worth exploiting, with the possible exception of off-shore phosphate, but it is uncertain whether these deposits can be extracted commercially. The potential for a tourist industry exists, but the remoteness of the location and a lack of adequate facilities hinder development. Currently, monetary aid from the United States provides the majority of revenue for both the government and the national economy.

The government's main economic priority is to develop a sustainable, independent economy by bolstering the private sector and reforming the public sector with the objective of reducing dependence on foreign aid and encouraging economic self-sufficiency. In addition, the government supports international efforts to stop global warming and pollution in general, in order to protect the islands and their agricultural sectors. In recent years, the climate has been very unstable with typhoons, flooding, and mudslides followed by a drought.