P 090811Z APR 09
FM AMEMBASSY KOLONIA
TO SECSTATE WASHDC PRIORITY 2252
INFO AMEMBASSY KOROR PRIORITY 
AMEMBASSY MAJURO PRIORITY 
AMEMBASSY KOLONIA

UNCLAS KOLONIA 000047 
 
 
DEPT FOR EAP/ANP 
 
E.O. 12958: N/A 
TAGS: PGOV SOCI FM
SUBJECT: RIFT OVER FSM SOCIAL SECURITY LAW HIGHLIGHTS POHNPEI'S 
SECESSIONIST MOVEMENT 
 
¶1. President Mori's proposed amendments to the Federated States 
of Micronesia's (FSM) Social Security law ignited criticism from 
politicians and the public alike, particularly in Pohnpei State. 
 The proposal gave more ammunition to those calling for 
secession ahead of Pohnpei's upcoming constitutional convention. 
 End Summary. 
 
¶2. On September 5, 2007, President Mori submitted seven 
amendments to the Social Security and Prior Service Benefit Act 
(Title 53 of the FSM Code) for congressional consideration.  The 
most controversial amendments included raising the retirement 
age from 60 to 65 and increasing Social Security payroll taxes 
from six to seven per cent.  President Mori claimed the changes 
were necessary to keep the system viable. 
 
¶3. Seventeen months later, the FSM Congress voted on the measure 
during its February 2009 Special Session.  The vote was thirteen 
in favor, one against.  Pohnpei State Congressman Resio Moses 
cast the sole "no" vote.  On February 10 the bill arrived on 
President Mori's desk, but the President refused to sign the 
bill.  Instead, he wrote a lengthy letter to FSM Congress 
Speaker Isaac Figir, stating that after much deliberation he 
would "wash his hands" of the bill and allow it to come into 
effect without his signature.  The bill officially became law on 
March 6. 
 
¶4. Criticism soon arose in every corner of the FSM.  In Pohnpei 
State in particular, the reaction went beyond the normal rancor 
over a lost government benefit.  Politicians, business leaders 
and private citizens alike argued that the Pohnpei State 
government and private sector faithfully contributed their 
required share into the Social Security system while other 
states (mainly Chuuk) did not. 
 
¶5. The FSM Social Security Administration lends credence to 
these complaints.  The SSA Deputy Director told Pol/Mil 
Assistant that Pohnpei has always been current with their 
payment, while Yap pays up eventually but not always on time. 
Kosrae and Chuuk, on the other hand, did not pay for three years 
due to each state's insolvency.  Those two states eventually 
became current thanks to a donation from the People's Republic 
of China (PRC). 
 
¶6. The PRC gave the FSM national government US$4 million in 
November 2007.  The national government used part of this money 
to bail out Chuuk and Kosrae's Social Security obligations. 
While the two states became up-to-date in January 2008 and have 
remained out of delinquency ever since, many in Pohnpei viewed 
the bailout as unconstitutional.  Article 12, Section 1(b) of 
the FSM Constitution states that "each state shall receive a 
share [of all foreign financial assistance] equal . . . to the 
share of every other state."  When Chuuk and Kosrae took the 
lion's share of the Chinese aid, Pohnpei argued it was a 
violation of the "formula" for assistance distribution. 
 
¶8. This incident simmered in the minds of Pohnpeans for more 
than a year before the Social Security amendments passed. 
Passage brought their resentment to a head.  Many in Pohnpei 
believed that not only did the state lose its share of the 
Chinese money it was basically penalized for paying its Social 
Security taxes on time.  Moreover, many Pohnpeans noted that a 
majority of Social Security retirement and disability benefits 
are paid to the citizens of Chuuk State (Chuuk has more than 50% 
of the FSM's total population.) 
 
¶9. On February 24, the Pohnpei State Legislature wrote to the 
FSM Congress expressing their disappointment.  Their resolution 
claimed that the FSM National Government is not fairly 
representing the interest of all the people and is jeopardizing 
the continued existence of the Federation. 
 
¶10. On March 16, Pohnpei State Senator Dohsis Halbert attempted 
to repeal the amendments by introducing a bill to restore the 
status quo.   However, the FSM Congress did not act on his bill. 
 On March 24, Senator Halbert introduced a resolution to study 
Social Security programs in various jurisdictions in the Pacific 
Region and come up with options that may improve the FSM 
program.  The FSM Congress adopted Senator Halbert's resolution 
the next day, the last day of the special session. 
 
¶11. The adopted resolution now awaits President Mori's 
implementation.  The 16th FSM Congress will convene on May 11. 
Further congressional action may depend on the progress of 
President Mori's efforts. 
 
CONCLUSION 
 
¶12. Ten years ago only traditional leaders and a handful of 
native-born Pohnpeians expressed their desire to secede from the 
Federation.   Now, however, the voices of secession appear much 
more numerous.  In the past decade the national government 
bailed out Chuuk State twice after the local government went 
broke.  Yet with all that extra attention, Chuuk State still 
lacks basic infrastructure such as a reliable water supply, a 
working sewer system, a consistent power supply, decent roads, 
and basic medical and pharmaceutical supplies.  Even many of the 
state's schools lack chairs, desks, and textbooks.  Many 
Pohnpeans feel that the Federation adds no value when the most 
populous state of the FSM, Chuuk, seems to be dragging everyone 
else down. 
 
¶13. Pohnpei State's Constitution requires a new constitutional 
convention every ten years to review constitutional provisions. 
Another review is scheduled for this year, and on March 3 the 
citizens of Pohnpei State elected 29 convention delegates.  In 
recent town hall meetings many of the delegates expressed their 
wish for a constitutional amendment that would allow Pohnpei to 
secede.  The convention is scheduled to convene April 27.  Post 
will report on its deliberations septel. 
 
 
DOUGLASSWD