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At the last leg of my trip to North Pacific, I landed in the Land of Stone Money. Federated States of Micronesia has an estimated population of 106,487 (July 2012 est.) and is spread across 2,500 kilometers of the Western Central Pacific Ocean, just north of the equator. It consists of four states of Chuuk, Kosrae, Pohnpei and Yap and their 607 islands (only 65 are inhabited). It is a democratic country with no formal political parties and amazingly has seven official languages: English, Ulithian, Woleaian, Yapese, Pohnpeian, Kosraean, and Chuukese.

One of the states of FSM, Yap is known for its stone money called Rai. These large doughnut-shaped, carved disks are probably the biggest stones representing currency some are as big as 12 feet. Many of them were brought from other islands, as far as New Guinea, but most came in ancient times from Palau. Their value is based on both the stone's size and its history. These stones have been legal tender for centuries. The islanders know who owns which piece but do not necessarily move them when ownership changes.

 

Although today the United States dollar is the currency used for everyday transactions, the stone disks are still used for more traditional or ceremonial exchange. Unfortunately having these treasures is not helping FSM, its medium-term economic outlook appears fragile due not only to the reduction in US assistance but also to the current slow growth of the private sector. Financial assistance from the U.S. is the primary source of revenue, with the U.S. pledged to spend $1.3 billion in the islands in 1986–2001. 

FSM's biggest challenge is to find a way of lessening its dependence on foreign aid, probably the answer lies in leapfrogging in the ICT and market itself in the global cyberspace to show its splendid beaches and scuba diving opportunities, thereby attracting tourism. FSM has realized the critical factor and is working on a tourism-focused ICT Policy and a framework to introduce competition in the ICT sector. FSM already has made a mark in the cyberspace by having its google search page

 

Before parting with this piece, two things seems strange to me in a country with rich history of money management:

  • having access to a severely underutilized undersea cable and falling prices all over the world, FSMTC’s recent upward revision of rates is not comprehendible, may be introduction of efficiency regulation would help.
  • Like Tuvalu, FSM also has a hot ccTLD .fm, quite popular among FM radios however FSM has not been able to enjoy the benefits of this attractive ccTLD as Tuvalu did with its .tv. DotFM is managed by its monopoly telecommunication operator FSM Telecom Corporation.
  • Xandra

    Posted at 2012-02-26 14:35:21

    These countries have so much potential, but need a bit of help in the ICT sector to meet that potential. My hope is that they one day are able to reap the benefits of ICTs, and are able to significantly reduce their dependency on foreign aid.

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