slide RMI Economic Review JEMCO-JEMFAC, August 2013 Graduate School USA, Pacific & Virgin Islands Training Initiatives 1
Feb 23, 2016
slide
RMI Economic ReviewJEMCO-JEMFAC, August 2013
Graduate School USA, Pacific & Virgin Islands Training Initiatives
1
slideGraduate School USAPacific Islands Training Initiativewww.econmap.org
RMI Presentation
Economic Performance
Economic Policy
Compact Trust Fund
36
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REAL GDP and Per Capita GDP
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FY03FY04
FY05FY06
FY07FY08
FY09FY10
FY11FY12
$120
$125
$130
$135
$140
$145
$150
$155
$160
$2,400
$2,500
$2,600
$2,700
$2,800
$2,900
$3,000
$3,100
$3,200
131.3
150.5
2,626
2,821
GDP at constant prices GDP per Capita
GDP
US$
Milli
ons
GDP
(Per
Cap
ita)
1.5% GDP Growth from FY03 to FY120.8% GDP Per Capita Growth
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Average Wage Rates
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FY03FY04
FY05FY06
FY07FY08
FY09FY10
FY11FY12
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
$10,000
$11,000
$12,000
$13,000
Private Sector Public Sector
1.8% Average Private Wage Growth During Amended Compact Period
1.3% Average Public Wage Growth During Amended Compact Period
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Employment by Sector
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FY03FY04
FY05FY06
FY07FY08
FY09FY10
FY11FY12
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
$4,500
$5,000
Private Sector RMI Government
1.1% Average Private Wage Growth During Amended Compact Period
1.8% Average Public Wage Growth During Amended Compact Period
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Govt Revenues vs Expenditures
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FY04 FY05FY06 FY07 FY08
FY09 FY10 FY11FY12
$40
$50
$60
$70
$80
$90
$100
$110
$120
$130
$140
Total Revenues Exp adjusted for CTF Total Expenditures
US$
Mill
ions
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Govt Employment & Avg Wages
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FY03FY04
FY05FY06
FY07FY08
FY09FY10
FY11FY12
0
500
1,000
1,500
2,000
2,500
3,000
3,500
$0.0
$5.0
$10.0
$15.0
$20.0
$25.0
$30.0
$35.0
No.
of
Empl
oyee
s on
Pay
roll
Tota
l Gov
ernm
ent
Payr
oll $
'000
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External Debt
42
FY03FY04
FY05FY06
FY07FY08
FY09FY10
FY11FY12
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
External Debt, % of GDP Debt Service, % of General Fund
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FY12 Subsidies to SOEs
43
-$3,000
-$2,500
-$2,000
-$1,500
-$1,000
-$500
$0
$500
$1,000
US$
‘000
AMI KAJUR MWSC MEC MIPA MISC NTA MIR TOBOLAR
$11 million in Subsidies in FY12
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Outmigration & GDP
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-2.0%
-1.5%
-1.0%
-0.5%
0.0%
0.5%
1.0%
0.8%
GDP per capita growth FY03-FY12 Annual average net migration FY03-FY12
-7,148
-1.5% ANNUALLY
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CAP (not implemented)
TRAM (under consideration)
SOE Framework Legislation (with Nitijela)
ADB Public Sector Program (closed-out)
External Debt Management (with Nitijela)
World Bank ICT Reform (underway)
Decrement Management, MTBIF & the Fiscal Management Model (requires sustained attention)
RMI Policy Initiatives
45
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RMI Policy Issues
FISCAL MANAGEMENT ISSUES/OPPORTUNITIESInfusion of additional resources supports previously unplanned expenditures in FY13:
$3 million from World Bank (ICT reforms);$6 million from ADB as 2nd tranche of PSPLarge surplus from Vessel Day Scheme (VDS), US treaty and $5,000 VDS rate; (MIMRA revenues in FY12 over $10 million)
Similar infusions likely in FY14:$5 million possible from World Bank (ICT reforms);Continued large surplus from VDS with anticipated increase to $6,000 daily rate.
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RMI Policy Issues DECREMENT MANAGEMENT, MTBIF & THE FISCAL
MANAGEMENT MODEL RMI implementation of the MTBIF could have addressed 1st step of the requirement for a decrement management plan
Line agency ownership and leadership adoption were absentBudgets did not reflect commitments
Table submitted to USG in late July based on the Fiscal Management Model provided only a medium-term revenue forecast.A serious dialogue to specify a way forward is required; sustained solutions will take time
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RMI Compact Trust Fund OBSERVATIONS
Management of the CTF further streamlined and improved; investment costs are admirably low and investment policy monitoring/updates reflect high standard of careAnnual report for FY2012 continues improvements, building on the FY2011 reportLooming need to focus on “distribution policy” per TF Agreement Article 15(1)Projections on CTF “effectiveness” could be further improved for clarityNew issue 25 percent of annual grants continue after FY2023 per Military Use and Operating Rights Agreement
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RMI Compact Trust Fund
52
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RMI Compact Trust Fund
54
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RMI Compact Trust Fund
55
$557m
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Questions or Comments?JEMCO-JEMFAC, August 2012
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Graduate School USA, Pacific & Virgin Islands Training Initiatives
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FSM Policy Issues
PUBLIC EXPENDITURE & FINANCIAL ACCOUNTABILITY (PEFA)PEFA is a framework for the assessment of Public Financial Management (PFM) developed by the World Bank and IMFImplemented in many countries in the worldPEFA focuses on PFM systems rather than fiscal objectivesPEFA is based on an international standards and provides a precise measurement system.
28 high level indicatorsFurther sub-categories
FSM conducted a self and formal assessment with evaluators from PFTAC, World Bank, Forum, FSM, etc.Requested PFTAC to develop “Road Map” for PFM and PEFA
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