Ambassador of China to the FSM presents his credentials to OlterPALIKIR, Pohnpei (FSM INFOR-

MATION SERVICE) - The first resi-dent Chinese Ambassador to FSM LiQinping arrived June 26 in Pohnpei andpresented his credentials to PresidentBailey Olter, June 27, in the presence ofthe cabinet members, diplomatic craps,other officials and friends.

Li served as the 2nd Secretary of theMinistry of Foreign Affaks in Beijing,was the Department of Western Euro-pean Affairs Ministry of Foreign Af-fairs Deputy Division Chief, the Chi-nese Counsellor at the Embassy in Ice-land, Netherlands and of the Depart-ment of Western European Affairs inthe Minister of Foreign Affairs.

In another related activity, DavidNethery is the present Charge d'Affairsof Australia to the FSM who succeededRaewyn Henelius in June, is expectedto return to Canberra shortly after theconclusion of the South Pacific Forummeeting which is to be held on Pohnpei

CHINA ENVOY PRESENTS CREDENCE - Ambassador of China to the FSM Mr. LiQinping presented his credentials to President Bailey Olter, June 27 in a brief ceremonyheld at the Cabinet Room in the presence of the cabinet members, diplomatic corps,friends, and other officials. From left to rightare: Vice President Jacob Nena, PresidentOlter, Mr. Li, and Mrs. Li.July 22 to August 2, this year. ^ing posted to Australian High Com-

Nethery joined the Australian De- mission in Port Vila, Vanuatu, com-partment of Foreign Affairs and Trade, pleted his duty in Vanuatu in Septemberspent three years working in the 1990, and was working in the ForeignDepartment's Legal Division before (See CHINA, Page 2)

THE NATIONAL UNIONPEACE • UNITY • LIBERTY

^AN OFFICIAL PUBLICATION OF THE PEOPLE OF FEDERATED STATES OF MICRONESIA „

Volume 12 Palikir, Pohnpei, June 15,1991 Number 11

WHO General Assembly grants FSM full membershipPALIKIR, Pohnpei (FSM INFOR-

MATION SERVICE) - The FSM De-partment of Human Resources Secre-tary Dr. Eliuel K. Pretrick attended the44th United Nations World Health Or-ganiazation (WHO) General Assembly,granting the FSM full fledge member-ship, May 8, in Geneva, Switzerland.

On May 8, the Assembly supportedand unanimously approved the applica-tion for FSM membership to WHO butrequires a Letter of Instruments fromthe FSM National Government to besent to the United Nations Secretary

General.FSM wanted the full fledge member-

ship since the Trusteeship Agreementterminated in December last year andthe application had been submitted toWHO Central Office, March this year.

Being a member of WHO, financialsupport venues from other world lend-ing institutions will be opened up to theFSM. The government received anannual budget of about $400,000 fromWHO to support training and manpowerimprovements in medicine, administra-tion, nursing, dental, laboratory, x-ray,

and other related medical and healthfields few years in the past. A numberof FSM students are now attendingmedical schools in Fiji and Papua NewGuinea through fundings from theWHO. This year the funding supportfrom the WHO has gone up from$400,000 to $600,000 and this year isalso the first time that funds have beenmade available to support FSM stu-dents attending the Medical OfficerTraining Program (MOTP).

As a first step in obtaining intema-(See WHO, Page 2)

2WHO.

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(Continuedfrom Page 1)tional collaboration, the WHO will beFSJVTs stepping stone for eligibility toany organization in the form of interna-tional support. This support will give usthe eligibility to make applications withthe World Bank and International Banksand other lending institutions for im-proved health care and services for thepeople of the FSM.

As an independent country, but not amember of the United Nations, it isrequired that the FSM meet several ob-ligations to be considered eligible toenter the International market for im-portation of narcotic and Psychotropicmedications.

The External Affairs and the Officeof the Attorney General are looking intoratifying the WHO constitutional asadopted by the International Confer-ence in New York in 1946.

Those requirements consist of ratifi-cation of two United Nation Conven-tions, on the Single Convention onNarcotic Drugs (from 1961), and thesecond on the Convention on Psy-chotropic substances signed at Viennaon February 1971, plus joining onespecialized health agency, such as theWHO.

The FSM Congress have adoptedresolution 7-27 ratifying the WHOConstitution.

PERKINS PAYS COURTESY ON THE PRESIDENT - A mission comprising ofCommand Naval for Marianas, RearAdmiralJamesB.Perkins, III, and US Ambassadorto the FSM Aurelia E. Brazeal paid courtesy call on President Bailey Olter June 13,Accompaning them from the Department of External Affairs was Acting SecretaryAsterioTakesy. Clockwisefromleftto rightare Takesy,Perkins,Brazeal, and Olter. RearAdmiral Perkins visited the President on behalf of Commander in Chief ofClNCPACCharles Larson who was in the Philippines due to the volcanic eruption there.

China(Continuedfrom Page 1)Affairs Department's South PacificSection prior to his posting here to FSM.

Henelius arrived in Pohnpei in April.She will be in Pohnpei until the laterpartof August 1991. Henelius has servedin many of Australia's overseas mis-sions, including Kathmandu, Bangkok,

NETHERY VISITED PRESIDENT - Charge d' Affairs of A ustralia to the FSM DavidNethery ( left) paid courtesy call on President Bailey Olter (right) in his office.Accompaning Nethery from the Department of External Affairs is Foreign ServiceOfficer KandhiA. Elieisar (center).

Damascus, Stockholm, Jakarta, Hanoi,New Delhi, Bonn, and Kingston (Ja-maica).

"I am particularly enjoying my tourin the beautiful island of Pohnpei, andgetting to know the very friendly peoplesof this partof the Pacific. I hope too thatI will have the opportunity to visitKosrae, Yap and Chuuk while I am inthe Federated States of Micronesia."

"Coming from the rigors of a coldCanberra winter, I am enjoying the warmclimate and being near the ocean. Infact a highlight of my stay so far hasbeen catching a Skip Jack (albeit a smallone) during a fishing expedition tobeautiful Ant Atoll."

Evon Coghill, Third Secretary, alsojoined the Australian Embassy here,arrived in Pohnpei in May and will be atthe Australian Embassy until after dieSouth Pacific Forum. Coghill is anofficer of the Australian DepL of For-eign Affairs and Trade since 1970 andhas served in Kuala Lumpur, Singapore,Phnom Penh, and Saigon. She hadaccompanied her spouse, who is also anofficer of Foreign Affairs and Trade, onposting to Kuala Lumpur and Rangoon.

ANNOUNCEMENTPALIKIR, Pohnpei (FSM INFORMATION

SERVICE) - The FSM Government is acceptingbids for production of Tourism promotional andEducational video proposals, according to FSMRegistrar of Corporation.

The first phase of the proposal should cover avariety of footage that will be shot from bothunderwater and top side locations in the state ofPohnpei which will be used for promotion of tour-ism, investments and also educational video pro-gramming. Copies of which will be supplied toCNN Travel Guide Network and Water SportsNetworks.

The second phase will involve completed vide*otape with narration and soundtrack that willpresent Pohnpei as a tourist destination, educatingthe viewers about the beauty of Pohnpei, richnessof culture, fascinating historical landmarks andthe abundant marine life, as a world class divingarea.

Bid proposals will be evaluated on the merit ofits approach to the project, experience of staff,familiarity with Pohnpei State and the cost of theproject

All bid proposals shall be submitted to the De-partment of Resources and Development, FSMNational Government, P.O. Box PS 12, Palikir,Pohnpei FSM 96941. Inquiries can be directed toMr. Yasuo I. Yamada, Registrar of Corporations,Investment and Trade Promotion, Department ofResources and Development, Phone No. 691-320-2642 or Fax No. 691-320-5854. Deadline for sub-mission of bid proposal is July 31,1991.

Official memorandum to IDepartment and Offices 1

PALIKIR, Pohnpei (FSM INFORMATION SERV-ICE) "Oneofourmostimportantresponsibilitiesis thatof keeping the public and citizens of the FederatedStates informed of the activities and undertakings oftheir government" says FSM President Bailey Olter inan official memorandum issued in eaiiy June to allCabinet Members in the FSM Government.

'To this end, I would like to ask that each of yourdepartments and offices designate an official to beresponsible for gathering and compiling information onactivities and undertakings of your respective depart-ments and offices and transmit the same to PublicInformation Office for their timely and appropriatedissemination to the general public.

"I can not over emphasize the importance of this taskand would ask that you make this an immediate require-ment of your departments and offices, concludes Presi-dent Olter's memo.

In compliance with this stated policy, various depart-ments and offices have designated staff to be respon-sible for releasing news information about their depart-mental activities through the President's Public Infor-mation Office.

In this connection, the general public is also invited toshare their views on the programs and policies of thegovernment.

Olter urged improvement in the performance of theNational Union, that it is published on a timely basis.The National Union is an official newsletter of the FSMGovernment.

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Diplomatic Corps pays courtesy calls on Olter and NenaPALIKIR, Pohnpei (FSM INFORMATION SERVICE) -

The members of the Diplomatic Corps whose Embassies areestablished in Pohnpei paid their first courtesy call onPresident Bailey Olter and Vice President Jacob Nena, June10 and 11, respectively, since they took office on May 11,1991.

The diplomats included Dean of the Diplomatic CorpsPurisimo A. de Peralta, Philippine Ambassador to the FSM,Amelia Erskine Brazeal, the United States Ambassador to theFSM, the Charge d'Affaires, a.i. of the Embassy of Australiato the FSM, Mrs. Raewyn Henelius and the Charge d'Affairesof China to the FSM Mr. Lu Folding.

The visiting diplomats during the brief meetings with theFSM Chief Executives, extended their Countries' well-wishes to both President Olter and Vice President Nena for asuccessful administration, reaffirming their governments'policies of cooperation with the new administration. They

also promised to lend the FSM Government any assistancepossible for a successful Forum meeting slated for late July22nd through August 2, this year.

In response, President Olter and Vice President Nena saidthey were honored to receive the foreign diplomats andlooked forward to a continued cordial and friendly workingrelationship with them and the governments they represent

"The administration looks forward to the Forum meetingwith great anticipation when leaders of different Govern-ments sit and talk together about issues of mutual interests."says Vice President Nena.

Although there may be some slight misunderstandingsregarding the "diplomatic immunity" accorded to foreigndiplomats and their staffs and dependents on the part of someFSM officials, Vice President Nena expressed his confi-dence that better understanding is the solution.

FSM Embassy participates in Asian Ladies Friendship Association Festival

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PALIKIR, Pohnpei (FSM INFOR-MATION SERVICE) The FSM Em-bassy in Tokyo participated for the firsttime in the Asian Ladies FriendshipAssociation Bazaar which was held inthe Hotel New Otani, in Tokyo, May 27,according to a release from the FSMEmbassy in Japan.

The Bazaar is an annual event of theprestigious association whose presentPresident is Madam Miki, wife of thelate Prime Minister Takeo Miki of Ja-pan. The Association's membershipconsists of wives of diplomats and la-dies from Japan. The association con-ducts several activities each year. Thisyear (1991) one of its special projects isthe compilation of a cook book entitled"The Treasure of the Spice Trade"containing various recipes from mem-ber countries.

All the embassies of the South Eastand East Asian countries, includingthose of the Pacific countries of Fiji,Papua New Guinea and the FSM par-ticipated in the bazaar by selling theircountries' wares such as crafts,clothings, food, jewelries, etc.

The FSM booth had handicrafts,peppers, soaps, coconut oils, shampoosand other items produced in the FSM.

The highlight of the bazaar was thedrawing of raffle tickets, with numer-ous prices, including airfare ticketsdonated by international airlines of theAsian Pacific region. Continental/AirMicronesia generously donated tworound trip tickets to Pohnpei. DoorPrizes from each participating countrywere given away by a girl representa-tive of each country.

The FSM was represented by MissArlene Takesy, an FSM student study-ing in Japan under Japanese Govern-ment scholarship award.

The proceeds from the bazaar weredonated to designated charitable or-ganizations or similar activities in theparticipating countries.

The FSM earned from the proceeds800,000 yen (over $5000) and donatedto PATS Trust Fund. Fr. Cavanah ac-cepted the donation at the FSM Em-bassy presented by FSM Ambassadorto Japan Masao Nakayama.

FSM PARTICIPATES IN BAZAAR-The FSM was represented by Miss ArUneTaktsy(right), an FSM student studying in Japan under Japanese Government scholarshipaward. FromIefttorightare:YumiWadaandTakueKasayanagifromtheFSMEmbassyin Tokyo, and Takesy.

CFSM adjoumes passing 32 bills and resolutionsPALIKIR, Pohnpei (FSM INFOR-

MATION SERVICE) The first Regu-lar Session of the Seventh FSM Con-gress adjourned June 9 introducing 71billsof which 16 were passed, and intro-duced 27 resolutions of which also 16were adopted.

Bills passed include C.B. 7-10, CD7,appropriating $793,956 supplementalfor the Congress, the President's Officeand External Affairs, public educationon the constitutional amendments, theSouth Pacific Forum, special electionand making technical corrections to theoperating subsidy for the FSM Devel-opment Bank, and funding for fuel un-der Office of Administrative Services.

Resolutions adopted include, C.R. 7-27, ratifing the Constitution of the WorldHealth Organization (WHO) as adoptedby the International Health Conferencein New York in 1956, and C.R. 7-21,confirming the nomination of HilaryTacheliol to the Board of Dkectors ofthe FSM Development Bank.

Other bills passed include:C.B. 7-17, to further amend Public

Law No. 6-49, to modify the use ofcertain funds for public projects in Pat-tiw, Weito and Halls. By changing thedescription of a $13,124 from "Piserachmedicine, food and clothingvand freight

costs of typhoon relief goods" to "LienPiserach operation and Maintenance".

C.B. 7-19, GDI, to amend the FSMCode to provide for the creation ofpreferred ship mortgages, maritimeliens. If it become law, it will enableYap Fishing Corporation (YFC) to ob-tain a loan from private commercialbank(s) to repay its loan from the YapState Government.

C.B. 7-22, CD1, to further amendPublic Law No. 5-89, to change thedescription of a $50,000 for "legal fees(retainer and expenses) for Fono WarClaims" to "Fono Public Projects" inNorthern Namoneas Region in ChuukState.

C.B. 7-25, CD7, appropriating$660,301 as supplemental funding foroperating expenses of the ExecutiveBranch, agencies of the National Gov-ernment, other National Grants.

C.B. 7-33, CD7, to further amend theFSM Code for redefining full-timeemployees under the National Govern-ment Employees' Health Insurance Plan.Under the new definition, employees inKosrae State who work a 32-hour work-week will be eligible to participate inthe plan.

C.B. 7-34, to further amend Public(See CFSM, Page 5)

CFSM(Continued from Page 4)Law No. 4-28, Chuuk State public proj-ects for changing the allottee of fundsappropriated from local developmentauthority to the Governor of Chuuk.

C.B. 7-35, to further amend PublicLaws Nos. 3-17,4-15, 5-26, and 6-106,for changing the allottee of funds forNorthern Namoneas from local devel-opment authority to the Governor ofChuuk State.

C.B. 7-36, to further amend PublicLaw No. 3-56, public projects forChuukState, for changing the allottee of fundsappropriated from local developmentauthority to the Governor of ChuukState.

C.B. 7-40, appropriating $3,979,040from the Program Funds of the FSM forFiscal Year ending September 30,1991,which was earlier appropriated by theU.S. Congress under Public Law 101-512, for the funding the construction ofthe new Palikir campus of the Commu-nity College of Micronesia.

C.B. 7-42, appropriating $21,120 forreappropriating certain lapsed funds forKapingamarangi public projects,changing the allottee from Chief Mag-istrate of Kapingamarangi to PohnpeiCommunity Action Agency.

C.B. 7-44, further amend Public LawNo. 4-92, Kosrae State public projects,to reprogram certain funds allocated toUtwe Municipality.

C.B. 7-52, amending Public Law No.67-89, Kosrae State public projects, toreprogram certain funds allocated toMalem Office building to Malem Com-munications project and to specify theallottee of the funds appropriated.

C.B. 7-54, CD1, to further amend theFSM Code, to exempt an ambassadorfrom submitting his resignation afterthe President takes the oath of office.

C.B. 7-60, to further amend PublicLaw No. 5-80, Kosrae State publicprojects for changing the allottee ofcertain project appropriations from thePresident of the FSM to Chairman ofKosrae Small Improvement ProjectsCommission.

C.B. 7-61, to farther amend PublicLaw No. 5-118, Kosrae State publicprojects, for changing the allottee of

funds for extension of Tafeyat secon-dary road project from the President ofthe FSM to the Chairman of the KosraeState Commisison on ImprovementProjects.

Other resolutions adopted:C.R. 7-1, appointing Dennis Yamase

as Legislative Counsel of the FSMCongress.

C.R. 7-2, extending sincere and spe-cial thanks and gratitude of the FSMCongress and the people of the FSM tothe Honorable John R. Haglelgam forhis many years of dedicated and valu-able service to the nation.

C A. 7-3, extending the mostheartfeltthanks and gratitude of the Congressand people of the FSM to the HonorableHirosi H. Ismael for his many years ofdedicated service to the Nation.

C.R. 7-4, extending the sincerestthanks and gratitude of the Congress tothe Honorable Tony Otto, formermember of the Congress of the FSM, forhis many years of meritorious service tothe people of the FSM.

C.R. 7-5, extending the sincere thanksand gratitude of the Congress to theHonorable Nick Bossy, former memberof the FSM Congress, for his manyyears of dedicated service to the FSMCongress.

C.R. 7-7, thanking the Hawaii StateLegislature for providing invaluable in-service training opportunities to stafffrom the FSM Congress.

C.R. 7-11, approving the FY'92Family Planning Title X Grant Applica-

tion.C .R. 7-12, GDI, respectfully request-

ing the President to direct the Depart-ment of External Affairs to investigatereports that services provided to citi-zens of the FSM have had an adversefinancial impact on Guam, the Com-monwealth of the Northern Marianasand the city of Honolulu, Hawaii.

C.R. 7-13, approving the FY'92 Pre-ventive Health and Health services blockgrant application.

C.R. 7-14, approving the FY'91Community Youth Activity programGrant application.

C.R. 7-17, expressing the gratefulappreciation of the Congress and thepeople of the FSM for the service per-formed by our fellow citizens in Opera-tions Desert Shield and Desert Stormduring the recent war in the PersianGulf.

C.R. 7-18, expressing appreciation tothe Australian National Group of theInter-Parliamentary Union for provid-ing a scholarship for training with theParliament of Australia in Canberra tothe Chief Clerk of the FSM Congress.

C.R. 7-24, CD1, expressing seriousconcern over the threat to the FSMposed by the effects of global wanningand respectfully requesting the Presi-dent to assure that the special concernsof the FSM are advanced and dealt witheffectively.

C .R. 7-26, to ratify the Charter of theUnited Nations as adopted and enteredinto force in 1945.

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FSM Embassy in Fiji-New phone numbersPALIKIR, Pohnpei (FSM INFORMATION

SERVICE - The Department of External Affairs

wishes to inform all concerned that effective

June 20,1991, the new telephone numbers for

the FSM Embassy in Fiji are 304180 and 304566.

Former Governor participates in Presidential Fellow ProgramPALHOR, Pohnpei (FSM INFOR-

» MATION SERVICE) - Fomer Gover-fj mi of the State of Kosrae Yosiwowf George is the first Presidential Fellow

selected in a program announced byU.S. President George Bush last Octo-ber at the East-West Center. Georgeanived May 27, in Washington D.C.,engaged in the program activitiesplanned for the visit, according to arelease from the East-West Center(EWQ.In Baltimore, George had discussions

on economic development & entrepre-neurship in Annapolis, and had time inCrisfield, Maryland for observation ofshellfish industry.

He traveled to Louisiana where hehad time for observation and discussionof aquaculture and shrimp industry andwent to San Diego on to observe and

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discuss tuna fishing industry and appli-cations of solar power, according toinformation obtained from U.S. Em-bassy in Kolonia.

George, who served two tarns asgovernor of Kosrae State, plans to ex-plore ways in which government andprivate business cooperate in promot-ing tourism and light industry. Georgemet in Hawaii with officials and re-searchers and also inspect geothermaland ocean thermal energy conversionoperations and diversified agricultureprojects.

The Presidential Fellowship Program,under the auspices of the U.S. Informa-tion Agency and the East-West Center,was launched by President Bush at theOctober 27,1990 Summit designed tobring officials of Pacific island govern-ments to the United States for research,

consultation, travel and lecturing.In Honolulu, Hawaii, George also

met with EWC researchers, members ofthe business community and Pacificisland contacts. In Honolulu and on ihemainland, George looked into voca-tional education development and fi-nancing and establishment of labor-in-tensive light industry that would besuitable for remote, resource-poor is-lands.

George, SO, was a participant at theEast-West Center in the 1960sandeameda B.S. degree from the University ofHawaii He has dare graduate work ineducation. He was a member of theFSM Development Bank Board of Di-rectors, the FSM Development Author-ity, Trust Territory Personnel AppealBoard and the Trust Territory SocialSecurity Board.

President Olter's first visit to Chunk after taking officeHAT TVTY1 TV—I__*_ * /v*o-» r •w^. i•'<j-^^> *• _ . _ _ _ _. . u*rPALIKIR, Pohnpei (FSM INFOR-

MATION SERVICE) -FSMPresidentBailey Olter accepted an invitation andaddressed the Chuuk High Schoolgraduates in a Graduation Ceremony inJune in Weno, Chuuk.

Olter made his first official visit tothat State since he took office upon hiselection as President, May 11 this year.

While in Chuuk, President Olter

confeied with Chuuk State GovernorSasao Gouland and other state leaderson matters of mutual interests to thestate and the FSM as a whole.

Olter flew to Guam following hisChuuk State stopover for a brief visitwith officials in Guam.

Olter was officially welcomed withhonor guards upon arrival at the PohnpeiInternational Airport in Dekehtik from

OHWAHIGHSCHOOLGKADVATION.ThevaledictorianDawenderNarruhmoftlugraduating class i, speaking during the Ohwa High School graduation commencementheld at the Koknia Protestant Church, June 6.

histrip. ThePreadentwasthenescortedinto the VIP lounge in the terminal byofficials of the Department of ExternalAffairs before leaving fen* his residenceinDokmier.

In another related activity, FSM VicePresident Jacob Nena was invited asguest of Continental Air Micronesia, torepresent the FSM Government, on theContinental Air Micronesia's inauguralflight on its newly established air serv-ice toCebu city in the Philippines. Nenaand his wife Lerina joined other offi-cials and dignitaries on the inauguralflight

Prior to departure from AJ>.Won PatInternational Airport, Guam, a ribboncutting ceremony was held in the departurc lounge. Upon arrival in Cebu.Phfl-ippines, guests attended lunch, hostedby Continental Air Micronesia, Guamand an Inaugural cocktails hosted byContinental, Philippines.

On June 1, the guests had choices ofeither sightseeing or golfing. A dinnerwas hostedby Cebu Governor Osmena.

Vice President and Mrs. Nena re-turned from Cebu to Guam and toPohnpei, Sunday, Jane 2, according tothe flight itinerary accompanying theinvitation.

Olter respondes to first State Legislature Leadership ConferenceWENO, Chuuk (FSM INFORMATION

SERVICE) - The following resolutions wereadopted by the First State Legislature Lead-ership Conference (SLLC) held, April 22-26,1991 in Weno, Chuuk, and after carefulreview, President Bailey Olter responded tothe resolutions, according to a release fromFSM External Affairs.

The resolutions include: SLLC Resolu-tion No. 1-91-007, requesting the NationalGovernment, the Federated DevelopmentAuthority, the IDF Board of Advisors, andthe FSM Development Bank to undertake ajoint effort to simplify the application andreview processes with respect to IDF loansand to eliminate other unnecessary andburdensome conditions and application re-quirements with respect thereto.

SLLC resolution No. 1-91-008, request-ing the FSM National Government to initiatenegotiation with the United States Govern-ment for the appropriation of the $40 millionauthorized in Section 111 (d) of Title I of theCompact of Free Association Act for theFSM.

SLLC resolution No. 1-91-002, request-ing the FSM National Government to assistthe States to come with ways and means ofobtaining cheaper alternative energy sourcesor means of obtaining and distributing lower-cost fuel for all the islands of the FSM.

President Olter in his letters to SpeakerKisande Sos of Chuuk State Legislaturesaid in respect to SLLC Resolutions Nos. 1 -91-007 and 1-91-008, that the NationalGovernment has earlier raised if s seriousconcerns regarding the established proce-dures and use of the $20 million allocated forlending under the IDF Lending Program, aswe (FSM) need to ascertain the need for theremaining $40 million balance. Based onthe experiences and reviews by the Depart-ment of Resources and Development, IDFBoard, the PDA and applicants complainthat the following are the main problems thatneed to be remedied: bank branch offices,application forms, review sequence, anddivision of the $20 million into the five sub-accounts (four state subaccounts and theprivate sector reserve subaccount).

The President has recommended that:A. If two sub-accounts are to be main-

tained (State and private sector reserve),the retained state sub-account should bereviewed by FSM Development Bank and

appropriate government agency which canprovide simultaneous technical assistance.Furthermore, all loan applications should besubmitted directly to the FSM DevelopmentBank.

B. The FSM Bank (commercial) be desig-nated to handle the private sector reservessub-account and require that loan applica-tions be submitted directly to the bank forprocessing and for PDA's approval.

C. The whole amount of the additional$40 million is earmarked for private sectorreserve sub-account be placed in the FSMBank. (Government agencies can providetechnical assistance with PDA approval ordisapproval.)

President Olter said he strongly believethat since IDF funds are being used andtreated as "low interest" loans, it should bemanaged by a commercial bank with theIDF Advisory Board providing only recom-mendations and the PDA carrying out theapproval/disapproval authority.

He pointed out in his letter to conferenceChairman Speaker Sos that he has reviewedthe resolution regarding alternative energysource and fuel supply and offer the follow-ing recommendations:

A. Currently each of the four slates hasifs separate fuel oil supply contract withMobil Oil Micronesia, Inc., and has been ina weak negotiating position on the pricingand supply security of its fuel needs.

His recommendation to remedied thesituation is that the four states jointly nego-tiate and/or tender one oil supply contract,the President said, adding that the FSM canseek and secure technical assistance from

relevant regional and international organi-zations to assist FSM in the formulation ofit's tender/strategy.

B. Meanwhile, each of the four statescurrently maintains, purchase, operates,negotiate contracts and subsidize it's ownutility system.

The present practice is not only costly butit is unreliable and inefficient in the use ofmonies, expertise, and manpower and notcompatible with economic development ef-forts.

President Olter recommended that thefour states join together with the privatesector to establish a Nation-wide FSM utili-ties corporation.

His response to securing oil supply andencouraging economic development, he saidan oil tax should be established that willhave all or partial features of the followingmeasures: removal of government fuel rate,earmarked tax for construction of fuel stor-ages, establishment of a FSM Oil Co., im-plementation of renewable energy technol-ogy and conservation programs, discour-age uses of certain equipment (use of fuel),protection of private retail and users, enact-ment of solar tax incentives legislations, andsliding tax rates to accommodate volatilefuel prices.

President Olter requested Speaker Sosfor his prompt comments/response to hisrecommendations so that appropriate gov-ernment departments may initiate appropri-ate proposed legislations when necessary,and/or initiate requests, where appropriate,for external assistance.

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KOSRAEANS IN POHNPEI CELEBRATE COMMEMORATION DAY FOR UALEM- Kotrae Community In/Co/on/a Observed June 6th Commemoration Day for Malem Municipality, Kotrae State, on June S, thi»year at Msko Beach. The celebration comprising of mini sportt and a luncheon. Standing on the StartingLine In the opening game from right are: Nlpastu Uelina C. Edwin, Deaconett (Intatlang) Kenyt L Tatty,Deaconets (Lasa) Kenye L Tally and WCA Member (Setun) Kenye T. Mart/nut.

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ADB approves $153,000 technical assistance for FSM

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PALIKIR, Pohnpei, (FSM INFOR-MATION SERVICE) - The Asian De-velopment Bank (ADB) has approved a$153,000 technical assistance grant forthe FSM to be used for strengtheningthe operation of the FSM DevelopmentBank (FSMDB), according to a releasefrom the ADB Office in Manila.

The technical assistance consists oftwo components. The first componentis to assist FSMDB in preparing a cor-porate plan consistent with the FSMGovernment's Second National Devel-opment Plan for Fiscal Years 1991 -1995. The technical assistance will re-view the Development Bank's policiesand objectives for lending operations,priority sectors, areas of business di-versification, organizational structureand branch network; upgrade manualsto make them consistent with the pro-posed corporate plan and to strengthenFSMDB's project processing capabili-ties; recommend personnel policies; anddesign a staff training developmentprogram which emphasizes basic bank-ing knowledge and specialized skills.The second component will examineways to improve the existing computer-based management information systemto generate operational data, informa-tion and reports reqtured by FSMDBmanagement and staff.

With the increasing funds receivedfrom national and state governments,the FSMDB needs to expand its loanportfolio. However, it must strengthenits institutional and operational capa-bilities to enable it to channel thesefunds more effectively to bankableprivate sector projects.

The technical assistance will reassessFSMDB's role as a development fi-nance institution, strengthen its staff

base and professional competence, andimprove its operational capabilities toenable it to perform more effectively asa self-perpetuating organization.

The technical assistance will requirethe services of one Development Bank

Specialist and one Management Infor-mation Systems Specialist.

The FSM Finance Department willbe the Executing Agency and the FSMDevelopment Bank will be the Imple-menting Agency.

FSMANDJICS SIGN CONSULTANT AGREEMENT - A Deputy Chief forAsian Affairs Lorin Robert and the Grant In Aid Cooperation Division of JapanInternational Cooperation Systems (JICS) Deputy Director Michimasa Numata,signed the consultant agreement for the Small Scale Long line FisheriesDevelopment Project in a brief ceremony held at the FSM Department ofExternal Affairs in April, according to a release from the FSM Department ofExternal Affairs.

The Note Of Exchange between the Republic of Japan and FSM Governmentsgives a $1.73 million package consisting of a 10-ton Tuna long line boatequipedwith fishing gears from the Government of Japan, and a Small Scale Grant InAid Scheme to the FSM National Fisheries Corporation for the Long LineFisheries Development Project.

The JICS as the consultant to establish tuna project in FSM, will provideprofessional services including the designing and drawing of documents, speci-fying and supervising of the tuna project, and other technical assistance asnecessary.

THE NATIONAL UNIONPublished by: The Office of the President/InformationFEDERATED STATES OF MICRONESIAP.O. Box 34, PALIKIR STATIONPALIKIR, POHNPEI FM 96M1

Tel.: (691) 320-2548; Fax: (691) 320-2785; TELEX 729-6807