Dutch Disease in the Western Pacific : an Overview of the Fsm Economy Under the Amended Compact of Free Association

Brazys, Samuel (2011). "Dutch Disease in the Western Pacific : an Overview of the Fsm Economy Under the Amended Compact of Free Association". Pacific Economic Bulletin. 25 (3): 24–39. ISSN 0817-8038.

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Abstract: It is argued that in the Federated States of Micronesia (FSM) US aid has distorted consumption, expenditure and relative prices to such an extent that tradable production is practically non-existent. These ‘Dutch Disease’ impacts of aid are so dire that the economy is beyond the point of self-correction and targeted intervention by FSM governments and international development partners could be the only way to overcome the structural failings. Use of the remaining US compact infrastructure grant funds to invest in telecommunications infrastructure could increase the annual GDP growth rate by up to 0.6 per cent. Investing these funds in transportation infrastructure could increase the annual GDP growth rate by 0.67 per cent. Overcoming Dutch Disease in the FSM is no easy task, but ways forward exist for policymakers who are willing to tackle the infirmity at its core.

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MAG: 3080474134
OpenAlex: W3080474134