What GAO Found Economic conditions in the Freely Associated States (FAS)—the Federated States of Micronesia (FSM), Republic of the Marshall Islands (RMI), and Republic of Palau—include population loss and economic decline. FSM’s population decreased by 26 percent between the 2010 and 2023 censuses, and RMI lost 20 percent of its population from 2011 to 2021. U.S. and FAS officials said high levels of out-migration have exacerbated skilled labor shortages and rising costs for government services. Though Palau’s population has remained relatively stable, a sharp drop in tourism during the COVID-19 pandemic drove a decline in its gross domestic product from 2019 through 2022. The three countries plan to use compact funding to prioritize education and health. Their allocations of compact grants for fiscal year (FY) 2025 largely support personnel salaries in the education and health sectors, and the countries plan to use compact infrastructure funds for projects that include schools and hospitals. However, FAS officials told GAO that project implementation has encountered obstacles such as delayed compact funds disbursement, rising construction costs, and labor shortages. Examples of Compact-Funded Projects in the Marshall Islands, May 2025 The FAS have not yet met certain oversight requirements established by the amended compacts, while…
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Compacts of Free Association: Education and Health Remain Priorities, but Implementation and Oversight Are Delayed
Source: US GAO Reports — US Government, Public Domain