Beyond the Compact: How the Micronesian Diaspora Powers Two Economies At Once
When the Compact of Free Association (COFA) is debated in political circles, the conversation usually leans heavily on numbers: aid packages, federal benefit restorations, or local infrastructure impacts in places like Guam, Hawaii, Washington state, Oregon, Texas, and Arkansas.
But there’s a massive, unmeasured side to this political equation. The Micronesian diaspora isn’t just settling into new communities; we are actively stabilizing two economies at once. Through daily hard work in our new homes and an unbroken tether to our islands, the diaspora acts as an unofficial, vital pillar of support for local U.S. states and territories, as well as the government of the Federated States of Micronesia (FSM).
Before diving into the numbers, it is important to state clearly: this is about respect. We pay our highest respect to our elders and to the politicians back home who are seriously and genuinely working to guide our governments forward. The goal of this discussion is not to tear down, but to provide a respectful reminder of the fiscal priorities that must be handled to build long-term sustainability.
While our leaders back home work on policy, our people overseas are putting their heads down and generating the revenue that keeps both sides of the ocean moving.
1. The Reality Check: From National Taxes to Local Firetruck Funds
When critics talk about the “cost” of hosting Micronesians, they miss the massive financial footprints we leave behind. To look at it through my own family’s day-to-day experience:
In Washington state, we pay nearly $8,000 a year in property taxes for our house, along with $300 in HOA fees. Those thousands of tax dollars go directly into the local system to fund schools, ambulances, healthcare, roads, and public buses. On top of that, every single working member of our household pays employment taxes out of every paycheck—funding federal and local systems like Medicare, Medicaid, and Social Security.
Even here on our more rural properties in Hawaii, the contributions are continuous and precise. I currently pay $200 for each property I own, meaning $400 total for our current two lots. With two more properties recently acquired, those fees will double to $800 this year. On top of that, the road fee just got increased to $100—which I am already required to pay this year—alongside a $20 membership fee. Beyond those mandatory costs, we regularly donate directly out of our pockets to the community park fund, the volunteer fire truck fund, and the local trash collection fund.
This is the standard across the diaspora. We pay our way, we fund the infrastructure we use, and we voluntarily chip in to protect the neighborhoods we live in.
2. A Shift in Mindset Needed Back Home: Circular Spending vs. Real Revenue
Because the diaspora understands exactly what it takes to earn a dollar and pay into a system, we want to see that same level of financial innovation from the leaders back home. Right now, there is a critical need to shift the government mindset from spending public funds to generating sustainable revenue.
We can see the need for this shift in everyday government operations. For example, during my son’s recent visit to Yap, he went to book a cabin on the H2, the state’s cargo and passenger ship, ready to pay cash out of pocket. Instead, he was told that rooms are strictly prioritized for government employees traveling on stipends.
From an economic perspective, this is completely backwards. The money spent on those employee stipends comes out of the public purse. Using public funds to pay for a room on a public ship is just moving money from one government pocket to another, while actively turning away outside, private cash from a paying passenger. Instead of looking for ways to maximize revenue and minimize costs to taxpayers, the system defaults to added expenditure.
Our politicians need to start asking a fundamental question before signing off on a travel request, a stipend, or even giving a government-purchased asset like a boat to a community member: How does this action help generate revenue for the government? Generosity with public funds doesn’t build long-term sustainability.
3. The Informal Safety Net: Remittances
While the FSM government negotiates formal treaty funds for national infrastructure, healthcare, and education, it is the diaspora that funds the daily realities of life for thousands of families back home.
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Household Stability: Roughly 40% of households in the FSM rely on financial support sent from relatives working abroad. These funds pay for daily necessities—food, utility bills, school supplies, and medical costs.
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Relieving Government Pressure: When the diaspora steps in to cover a family member’s private medical needs or educational expenses, it directly reduces the strain on public health systems and social services in the islands. Every dollar sent home is a dollar the home government doesn’t have to stretch to cover basic family survival.
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Keeping Small Businesses Afloat: Money sent home is immediately spent at local island stores, gas stations, and markets. This consistent cash flow keeps local businesses open, preserves domestic jobs, and generates critical import tariff and tax revenues for the FSM government.
A Tribute to Our Armed Forces: A Personal Roll Call of Honor
Beyond the financial ledger, there is a contribution that cannot be measured in dollars. We tip our hats and pay the highest honor to the Micronesian men and women serving in the United States Armed Forces, along with the families who support them. Their dedication is an unarguable pillar of the mutual partnership between our nations.
On a deeply personal note, I especially tip my hat to my brothers—Augustine, Joey, Edward, and Tom—and the several others who have served or are currently serving. I honor my many nephews, like Linus, Herman, Bernard, Kengke, and Romeo, alongside the several others, as well as my niece Blu, for the immense sacrifices they make in uniform.
A special salute goes out to my best friend, Libertus Mangdow, and his brother Dominic, both proud Navy veterans. And to my fellow Washingtonians, island mates, and our respected elder from the TAMUTEWAIU, Dave Hawelmai, along with Tim, Xavier, and the many other Yapese, Chuukese, Pohnpeians, and Kosraens out there standing on the frontlines:
KAMORALE for your services to both our host country, the United States of America, and the Federated States of Micronesia. You are the ultimate ambassadors representing our strength across the ocean.
The Bigger Picture
The relationship between the United States, its territories, the FSM, and the diaspora is a dynamic, multi-layered partnership. By building lives, working hard, paying our taxes, and maintaining deep cultural obligations to family back home, the Micronesian diaspora is providing an indispensable economic cushion that keeps the wheels turning on both sides of the Pacific.
It’s time for leaders back home to match that drive by focusing on innovation, revenue generation, and true fiscal responsibility.
Mahalo and Aloha.
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