Micronesian Economic Development

Most people in the Federated States of Micronesia are family farmers or fishermen. There are very few large businesses, few natural resources, and only a small amount of tourism. The government and people of Micronesia rely heavily on charity funds from the United States to operate. Part of the problem is that there is not enough infrastructure; roads, airports, hotels, ships, telecommunications, and so on.

This is a map showing where the Federated States of Micronesia are located. Image courtesy of the CIA, public domain.

Exploration One

How can the economic condition of Micronesia be improved? There are two main methods governments use to encourage growth and improved infrastructure:

  1. Allow free markets to reward hard work and the problem takes care of itself over time.
  2. Set goals and make detailed economic (or social) plans to improve infrastructure and education in a shorter time, while sacrificing freedom and natural incentives.

Governments that have chosen number one include: Great Britain (especially during the Industrial Revolution), The United States, Canada, Singapore, Hong Kong, and Australia, plus others. Governments that have chosen option two include Russia, France during the 1800’s, Cuba, China, and North Korea.  You can also choose a combination of the two main methods, which is what most modern countries do.

Pick a position from the choices above for Micronesia as though you were the president. Describe how the nation will develop economically under your plan. Explain what things the government will or will not do to aid in the development. Don’t forget to consider the condition of the people under your plan.

This is a view of the tiny international airport at Pohnpei, the capital of FS Micronesia. Image by Gargoylepni, released to the public domain.

Exploration Two

Make up a business you could run in Micronesia with the resources you have there, or with resources you import. It could be as simple as a beach side stand for tourists or as complex as a satellite internet company. Draw a picture or make an advertisement for your business. Older kids may research a little bit about how easy or difficult it is to set up a small business in Micronesia. Then make a simple business plan including where you’ll get the money to start your business, who your customers will be, how you will market your business, and what you will charge along with prospective profits.

This is the Blue Lagoon Resort on the the island of Truk. Photo by Matt Kieffer, CC license, Wikimedia.

Additional Layers

  • Because of the Compact of Free Association between the United States and Micronesia, you could actually freely go there and set up a business, just as Micronesians can come here and freely do business without needing immigration.
  • Find Micronesia on a globe and color a map.
  • Learn more about different economic and government types and which work best to produce happiness and prosperity for their people, by playing games.
  • Some Micronesian geography includes atolls, archipelagos, islands, bays, reefs, and sandbars.  Learn about these landforms.

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