VZCZCXRO7019
RR RUEHKN
DE RUEHKN #0084/01 1520609
ZNY CCCCC ZZH
R 010609Z JUN 09
FM AMEMBASSY KOLONIA
TO RUEHC/SECSTATE WASHDC 2301
INFO RUEHC/DEPT OF INTERIOR WASHINGTON DC
RUEHKN/AMEMBASSY KOLONIA 2667

C O N F I D E N T I A L SECTION 01 OF 02 KOLONIA 000084 
 
SENSITIVE NOFORN 
SIPDIS 
 
DEPT FOR EAP/ANP 
INTERIOR FOR OIA 
 
E.O. 12958: DECL:  6/1/2019 
TAGS: PGOV PREL EAID FM
SUBJECT: REACTION TO PRESIDENT MORI'S STATE OF THE NATION SPEECH 
INDICATIVE OF SLIPPING SUPPORT 
 
REF: KOLONIA 47 
 
CLASSIFIED BY: William Douglass, Deputy Chief of Mission, 
AmEmbassy - Kolona, State. 
REASON: 1.4 (b) 
¶1. (SBU) Summary.  In his second State of the Nation Address, 
Federated States of Micronesia (FSM) President Emanuel Mori 
identified many of the challenges that face his government. 
However, FSM national and state leaders criticized the President 
for not providing direction or guidance to resolve the issues he 
identified.  The lukewarm reaction may indicate that the 
President's support continues to slip among congressional 
members.  End summary. 
 
 
 
¶2. (U) On May 14, FSM President Emanuel Mori gave his second 
State of the Nation Address before the National Congress (Mori 
became President in 2007).  The President outlined many of the 
problems the country is facing.  Mori noted that the FSM's 
average income has declined from $1,934 per person in 2005 to 
$1,832 in 2007.  He indicated that social services remain 
underfunded; the FSM Health Insurance program continues to 
operate in deficit.  Mori also noted that the FSM Trust Fund 
established under the Amended Compact lost $22.8 million in 
¶2008.  Finally, the President stated that problems exist within 
the banking sector: consumer loans decreased by $1.3 million and 
development bank loans decreased by $1.5 million in the past 
year. 
 
 
 
¶3. (U) However, Mori said that despite the impact of the global 
economic crisis his administration accomplished a great deal in 
the last two years.  He took credit for obtaining $144 million 
in infrastructure sector grants under the Amended Compact, funds 
that had not been used since 2004.  That money will go to 
improve schools, roads, sewer systems, water systems, and health 
facilities.  He also predicted that more than 1,000 new jobs 
will be created thanks to an additional $8 million in new 
infrastructure grants procured by his administration.  President 
Mori mentioned that new US Federal Aviation Administration 
Improvement Projects are under way in all four states, including 
the Japanese government's plans to lengthen the runway at 
Pohnpei International Airport.  The President claimed these 
projects will increase the opportunities for tourism.  The 
President also took credit for creating the FSM Petroleum 
Company and bringing lower fuel costs to the country.  [NOTE: 
Fuel costs in the FSM are still significantly higher than those 
of their island neighbors.  End note.) 
 
 
 
¶4. (U) President Mori then listed the issues that require the 
government's attention, including: 
 
-Downsizing the government, something that must be done in order 
to free up funds for priority programs; 
 
-Develop the private sector to create jobs; 
 
-Expand the two-year College of Micronesia to a four-year 
institution to improve educational services; 
 
-Encourage the states of Chuuk and Kosrae to complete necessary 
budgetary reforms within the next year; 
 
-Continue investment in affordable, renewable energy and develop 
a new national energy policy; 
 
-Upon completion of the submarine fiber optic cable connection 
in March 2010, utilize the increased communications to bring 
additional economic opportunities to all four FSM states; 
 
-Finalize the country's proposed tax reform and improve tax 
collection; 
 
-Improve the foreign investment climate; and 
 
-Increase cooperation between the four states and his government 
to implement the Micronesia Challenge, a regional initiative to 
conserve and protect the environment. 
 
 
 
¶5. (U) In an aside, President Mori noted that the FSM has many 
development partners, but he especially wanted to thank the 
United States government for its support since the country 
gained independence in 1986.  He also called for universal 
expressions of gratitude for the young FSM citizens currently 
serving in the United States armed forces.  [NOTE: Both 
President Mori's daughter and Vice President Alik's son are 
 
KOLONIA 00000084  002 OF 002 
 
 
serving the US military.  End note.] 
 
 
 
¶6. (U) In closing, President Mori reported that the FSM will 
soon meet with its US counterparts for the Amended Compact's 
five-year review.  He expressed hope that this will be an 
opportunity to discuss improvements in the agreement. 
 
 
 
¶7. (C) COMMENT: President Mori's address was not universally 
well-received.  Many national and local leaders thought that 
while the speech spelled out many of the challenges the country 
is facing, it offered little in the way of solutions.  Lt. 
Governor Johnny Elimo of the President's home state of Chuuk 
told Pol/Mil Assistant that President Mori did not provide any 
guidance or direction to the nation.  Other government leaders, 
including Director of Yap State Civic Affairs Larry Raigetal and 
Chuuk State Attorney General Joses Gallen, said the same. 
 
 
 
¶8. (C) More than likely, congressional representatives were 
predisposed to criticize the speech even before the President 
approached the podium.  FSM Congress Senior Chief Clerk Liwiana 
Ramon confided that congressional members find it very difficult 
to work with President Mori.  Ramon said that Speaker of the 
Congress Isaac Figir meets often with the President to find 
consensus on a number of pressing issues, but Mori then ignores 
those agreements in his subsequent actions.  For example, Mori 
asked the Congress to approve amendments to the social security 
program.  Congress passed the proposals, only to receive a 
letter from Mori stating that he will "wash his hands" of the 
bill and allow it to become law without his signature.  (See 
reftel.)  The President created the impression that he used the 
Congress to pass necessary but politically unpopular reforms 
while running from the political fallout. 
 
 
 
¶9. (SBU) Under the FSM political system, the President is not 
directly elected by popular vote.  The Congress chooses the 
President from among its ranks.  While Mori is eligible for 
another four-year term beginning in 2011, it appears more and 
more doubtful that he can maintain sufficient congressional 
support for a second term.  End comment. 
DOUGLASSWD