pohnpei: househol income, d

POHNPEI: HOUSEHOLD INCOME, EXPENDITURE, AND THE ROLE

OF ELECTRICITY

by

James P. Rizer

August 1985

P a c i f i c Islands Development Program Resource Systems Institute

East-West Center 1777 East-West Road

Honolulu, Hawaii 96848, USA

JAMES P. RIZER i s a Research Fellow w i t h the P a c i f i c I s l a n d s Development Program (PIDP) a t the East-West Center. He has conducted planning s t u d i e s f o r a number of development p r o j e c t s i n the P a c i f i c r e g i o n . Before j o i n i n g PIDP, R i z e r worked f o r the government of F i j i and the U n i v e r s i t y of the South P a c i f i c .

The P a c i f i c I s l a n d s Development Program i s p u b l i s h i n g t h i s r e p o r t f o r use by P a c i f i c i s l a n d governments. To ensure maximum di s s e m i n a t i o n of the m a t e r i a l contained i n the r e p o r t , i t i s not copyrighted and i s l a n d governments are encouraged to copy the report or p o r t i o n s of i t at w i l l . PIDP requests, however, that o r g a n i z a t i o n s , I n s t i t u t i o n s , and i n d i v i d u a l s acknowledge the source of any m a t e r i a l used from the r e p o r t .

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CONTENTS

Page No.

L i s t of F i g u r e s v L i s t of Tables v i Foreword i x Preface x i Acknowledgments x i i i L i s t of Abbrevi a t i o n s x i v

EXECUTIVE SUMMARY 1

Chapter 1. DEVELOPMENT OF THE STUDY 5 I d e n t i f y i n g a S i t e 5 Focus of the Study 5 The Questionnaires 10 Planning the Study 11

Chapter 2. POHNPEI: AN OVERVIEW 13 L o c a t i o n 13 P h y s i c a l C h a r a c t e r i s t i c s 13 F l o r a and Fauna 14 H i s t o r y 14 Tr a n s p o r t a t i o n and Communication 16 S o c i a l S e r v i c e s and Issues 17

Chapter 3. RURAL ELECTRIFICATION: A CONTEXT 19 Selected Data on Current E l e c t r i c i t y Use 20 Energy Development Goals 25

Chapter 4. SOCIOECONOMIC PROFILE OF STUDY HOUSEHOLDS 29 P o p u l a t i o n 30 Economic A c t i v i t y , Education, and the Use of Time 33 Income and Expenditure 38 Comparison of Sokehs and Uh 47 D i s t r i b u t i o n of Income 54 Other Household C h a r a c t e r i s t i c s 57

Chapter 5. HOUSEHOLD ENERGY 61 Cooking 61 L i g h t i n g 64 Energy Use on Sokehs 64 E l e c t r i c i t y Consumption on Sokehs 66

Chapter 6. POLICY QUESTIONS 71

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P a c i f i c I s l a n d s Development Program East-West Center

APPENDIXES A: The Economy 79 B: Population 8 9

C: The Labor Force 9 5

D: Selected Energy Data 1 0 1

REFERENCES 1 0 7

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LIST OF FIGURES

1.1. Map of the new P a c i f i c 6 1.2. Map of Pohnpei I s l a n d 7 1.3. Map of Uh study area 8 1.4. Map of Sokehs study area 9

4.1. D i s t r i b u t i o n of income l e v e l s by households 41 4.2. Comparison of r u r a l and periurban: mean weekly

household income and resources 52 4.3. Mean weekly household income by l o c a t i o n and income group 53 4.4. Lorenz Curve of income d i s t r i b u t i o n • 55

5.1. Value of household possessions and kwh consumed per month by weekly household cash income 69

6.1. Impact of e l e c t r i c i t y costs on unaccounted cash expenditure by income group 75

D . l . Pohnpei State power p l a n t s — l o a d curves 104

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P a c i f i c Islands Development Program East-West Center

LIST OF TABLES

3.1. E l e c t r i c i t y t a r i f f s i n the P a c i f i c : 1981-82 (US^/kwh) 21 3.2. Pohnpei power prod u c t i o n — r e v e n u e data: 1980-81 21 3.3. Number of e l e c t r i c i t y users by average kwh per month

consumed and end-use c l a s s i f i c a t i o n (and % of t o t a l production per c l a s s ) : November 1980 - March 1981 23

3.4. Pohnpei energy development and resource assessment targeted goals: 1981-87 26

4.1. Enumerated p o p u l a t i o n by area, sex, and f i v e - y e a r -age groups • * 31

4.2. P o p u l a t i o n d i s t r i b u t i o n by major age groups (%) 32 4.3. Main occupation by study area and sex 34 4.4. Study p o p u l a t i o n by ed u c a t i o n a l l e v e l 36 4.5. Use of time: economically a c t i v e p o pulation

by study area, main occupation, and average hours per day per a c t i v i t y 37

4.6. Weekly household income and expenditure f o r the t o t a l sample 39

4.7. Comparison of Pohnpei weekly household expenditure p a t t e r n s w i t h other P a c i f i c i s l a n d surveys and i n d i c e s (CPI weights and percentage weekly expenditure f o r various c a t e g o r i e s ) 40

4.8. Mean weekly household income and expenditure by income group and amount 43

4.9. Mean weekly household income and expenditure by Income group and percentage 3 44

4.10. Weekly household income and expenditure—Upper income group 46

4.11. Weekly household income and expenditure—Upper-Middle income group 48

4.12. Weekly household income and e x p e n d i t u r e — M i d d l e income group • 49

4.13. Weekly household income and expenditure—Lower-Middle income group 50

4.14. Weekly household income and expenditure—Lower income group 51

4.15. D i s t r i b u t i o n of cash income by income group 56 4.16. Income l e v e l s and higher education 56 4.17. Value of household possessions by income group

and study area 58 4.18. Household possessions 59 4.19. Type of housing c o n s t r u c t i o n by income group

and study area 60

5.1. Number of households by energy source f o r cooking 62 5.2. Energy source f o r cooking by income group, study

area, and number of households 63

v i P a c i f i c Islands Development Program East-West Center

L i s t of Tables (cont.)

5.3. Household energy source f o r l i g h t i n g by area and number of households 65

5.4. Sokehs energy use by income group and number of households 65

5.5. Mean monthly e l e c t r i c i t y consumption on Sokehs I s l a n d : November 1980 - March 1981 67

5.6. E l e c t r i c i t y use by income group (kwh/month) 68

6.1. P r i o r i t y community needs as perceived by study households (% of households) 72

A . l . Money income: 1980 (US$) 80 A.2. Value of consumption of the t r a d i t i o n a l - s e c t o r

S t a te of Pohnpei: 1980 82 A.3. Value of nonmarketed p r o d u c t i o n — r u r a l households:

1978-79 83 A.4. Commercial and s t a t e government imports i n t o

Pohnpei: 1982 84 A.5. Imports of s e l e c t e d commodities i n t o the State

of Pohnpei 85 A. 6. Summary of commercial imports Into Pohnpei State

by SITC and country or area of o r i g i n : 1977 (% i n d i c a t e s the o r i g i n of commercial imports from each country or area) 86

B. l . P o p u l a t i o n growth 1973-80: Federated Sta t e s of M i c r o n e s i a , Pohnpei S t a t e , and s e l e c t areas on Pohnpei I s l a n d 90

B.2. Pohnpei State and o f f i c i a l p o p u lation estimates by age group and sex: 1973-80 91

B. 3. Pohnpei State o f f i c i a l p o p u lation p r o j e c t i o n s : 1973-88 (mid-year) 92

C. l . Wage and s a l a r y earners and average annual earnings by type of economic a c t i v i t y : 1979 96

C.2. S t r u c t u r e of the Pohnpei State labor f o r c e : 1973-79 97 C. 3. S t r u c t u r e of the v i l l a g e economy l a b o r f o r c e

aged 15 to 64: 1973-79 99

D. l . Petroleum imports i n the P a c i f i c : 1980 101 D.2. Commercial imports of petroleum products

i n t o Pohnpei: 1979-82 (US$f.o.b.) 102 D.3. Power generation output: FY 1975-84 (thousand kwh) 103 D.4. Pohnpei*s load growth and f u e l c o s t s : FY 1979-89 105 D.5. Revised plans f o r Pohnpei's energy development:

FY 1981-89 106

v i i P a c i f i c Islands Development Program East-West Center

FOREWORD

During the 19th century, the P a c i f i c i s l a n d s were net exporters of energy. Times have changed, however, as the export of whale o i l has given way to the Import of f o s s i l f u e l s . Although wood i s commonly used f o r cooking and some of the l a r g e r i s l a n d nations have developed h y d r o e l e c t r i c schemes, imported f o s s i l f u e l s provide the bulk of the energy used f o r t r a n s p o r t , manufacturing, and e l e c t r i c i t y . With f o s s i l f u e l s commonly rep r e s e n t i n g 20 to 25 percent of a nation's t o t a l import b i l l , the d e v e l opment of the P a c i f i c i s l a n d s i s constrained by the use of scarce f i n a n c i a l resources to the purchase of imported energy and i s thus vulnerable to both i t s p r i c e f l u c t u a t i o n s and b a s i c supply.

Recognizing the impact of imported f u e l s on t h e i r nation's economies, the need to more f u l l y e x p l o i t indigenous resources, and the n e c e s s i t y of c o s t - e f f e c t i v e uses of f o s s i l f u e l s , P a c i f i c i s l a n d leaders at the March 1980 P a c i f i c I s l a n d s Conference d i r e c t e d that a comprehensive P a c i f i c energy program be e s t a b l i s h e d to provide p o l i c y advice, t r a i n i n g , and t e c h n i c a l a s s i s t a n c e to r e g i o n a l governments. The P a c i f i c Energy Program i s supported by the United Nations Development Programme (UNDP), the European Economic Community (EEC), the South P a c i f i c Bureau f o r Economic Co-operation (SPEC), and the East-West Center (EWC). The EWC p o r t i o n of the program i s p r i n c i p a l l y concerned w i t h four p o l i c y areas:

. Petroleum s e c u r i t y

. Planning and p o l i c y advice to Micronesian Governments

. R u r a l e l e c t r i f i c a t i o n • Energy education/curriculum development

W i t h i n the four areas of emphasis, the East-West Center Energy Program has two o b j e c t i v e s : (1) to provide d e c i s i o n makers w i t h i n f o r mation and methodological t o o l s f o r a n a l y z i n g domestic energy problems and (2) to a s s i s t w i t h the f o r m u l a t i o n of energy p o l i c y a l t e r n a t i v e s that can be considered w i t h i n a framework of r e g i o n a l cooperation. To ensure that the EWC p r o j e c t i s responsive to the needs of the i s l a n d s t a t e s , l i a i s o n i s maintained w i t h other p a r t i c i p a t i n g o r g a n i z a t i o n s and, through the P a c i f i c I s l a n d s Development Program (PIDP), d i r e c t l y w i t h p o l i t i c a l leaders from the region.

T h i s study of r u r a l e l e c t r i f i c a t i o n i n the State of Pohnpei, Federated States of Micronesia (FSM), i s e s p e c i a l l y valuable because i t describes how e l e c t r i c i t y i s used by people i n t h e i r o v e r a l l development e f f o r t s . The P a c i f i c i s l a n d nations are e x p e r i e n c i n g considerable s o c i a l changes as people migrate to urban areas and the Impact of Western c u l t u r e i n c r e a s e s . P a c i f i c c u l t u r e s , however, are based on t r a d i t i o n a l systems

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of support and exchange, w i t h t h e i r roots i n r u r a l v i l l a g e s . As Mr. R i z e r d i s c u s s e s , e l e c t r i c i t y i s being used l a r g e l y by those w i t h Western educat i o n s and r e l a t i v e l y high cash incomes. This type of consumption p a t t e r n can be at the expense of the t r a d i t i o n a l r u r a l c u l t u r e .

The people and leaders of the P a c i f i c i s l a n d s recognize the value of e l e c t r i c i t y i n improving the q u a l i t y of l i f e . But e l e c t r i c i t y cannot be a c o n t r i b u t i n g f a c t o r to the growth of an urban "consumer s o c i e t y " that the P a c i f i c nations can i l l a f f o r d . By "consumer s o c i e t y , " we mean the import o f, f o r example, n o n e s s e n t i a l e n e r g y - I n e f f i c i e n t appliances and n o n - n u t r i t i o u s processed foods that d i s p l a c e t r a d i t i o n a l f o o d s t u f f s . These do not have productive uses i n the P a c i f i c i s l a n d s , and t h e i r opport u n i t y costs to the development of r u r a l areas i s high because scarce f o r e i g n exchange i s d i v e r t e d to pay f o r such imports. Knowing these negative Impacts beforehand enables the planning of c o r r e c t i v e measures. Thus, we welcome assessments that suggest measures to use e l e c t r i c i t y e f f e c t i v e l y i n the context of our P a c i f i c c u l t u r e s and I n d i c a t e whether e x p l i c i t l y or by i n f e r e n c e , why these i n i t i a t i v e s are necessary.

Th i s study i s the f i r s t of four case s t u d i e s on r u r a l e l e c t r i f i c a t i o n . Toward the end of 1985, the r e s u l t s of the Pohnpei study w i l l be incorporated w i t h s i m i l a r assessments of Papua New Guinea, F i j i , and the Cook I s l a n d s . The end product w i l l be a set of p o l i c y g u i d e l i n e s d e t a i l i n g how r u r a l e l e c t r i f i c a t i o n p r o j e c t s can be developed more e f f e c t i v e l y and which methods can enable e l e c t r i c i t y to be used more e f f i c i e n t l y .

F i l i p e B ole, C.B.E. D i r e c t o r P a c i f i c I s l a n d s Development Program

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PREFACE

T h i s study i s d i v i d e d i n t o s i x chapters, preceded by an executive summary of the major f i n d i n g s and recommendations. Chapter 1 discusses the development of the study, I n c l u d i n g some e l a b o r a t i o n on i t s methodology. Chapter 2 i s an overview of Pohnpei, which i s recommended to readers u n f a m i l i a r w i t h Pohnpei and M i c r o n e s i a .

Chapter 3 describes s e l e c t e d Pohnpei State energy and r u r a l e l e c t r i f i c a t i o n p o l i c i e s , programs, and i s s u e s . Although a l l a v a i l a b l e data were u t i l i z e d , both the q u a l i t y and q u a n t i t y of the data are l i m i t e d , which c o n s t r a i n s the a n a l y s i s . T h i s chapter i s complemented by the appendices that i n c l u d e s e c t i o n s on the s t a t e ' s economy, p o p u l a t i o n , l a b o r f o r c e , and energy. Taken together, chapter 3 and the appendices i n d i c a t e Pohnpei's o v e r a l l current and planned development.

Chapter 4, "Socioeconomic P r o f i l e of Study Households," and chapter 5, "Household Energy," r e l a t e data c o l l e c t e d during the study. The data d e s c r i b e the resources a v a i l a b l e to i n d i v i d u a l households and how they are used. Chapter 6 discusses p o l i c y questions.

F i n a l l y , i t should be emphasized that although the impact of e l e c t r i f i c a t i o n i s discussed, the study has concentrated on e s t a b l i s h i n g data b a s e l i n e s f o r s e l e c t e d i s s u e s . This d e c i s i o n and the opinions expressed i n the report are the author's and do not n e c e s s a r i l y r e f l e c t the views of the P a c i f i c Islands Development Program or the East-West Center.

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ACKNOWLEDGMENTS

Without the advice and a s s i s t a n c e of Antonio Actouka, Pohnpei State energy planner, and the support of Klkuo A p i s , d i r e c t o r of the Department of Conservation and Resources S u r v e i l l a n c e , t h i s study could not have been conducted.

Thomas H a l l , n a t i o n a l energy planner, provided guidance during the important e a r l y stages of the study. J e a n - P i e r r e Raymondet-Commoy of the Pohnpei State O f f i c e of Planning and S t a t i s t i c s and Alex Luzama and Ishmael Lebehn of the Department of Conservation and Resources S u r v e i l lance o f f e r e d many h e l p f u l suggestions. J i m Fitzsimmons, c h i e f of the S t a t i s t i c s D i v i s i o n — t h e FSM O f f i c e of Planning and S t a t i s t i c s , was an e x c e l l e n t and constant source of feedback.

Kusto Lieman and Damian Prlmo, c h i e f magistrates f o r Sokehs and Uh, r e s p e c t i v e l y , g r e a t l y f a c i l i t a t e d the study's acceptance by the community.

F i e l d enumerators Leon W i l l i a m , l a n s e r Edward, E l i a n d e r E l i a m , and Aleko Pieso performed admirably not only w i t h the enumeration but a l s o w i t h the r e v i s i o n of the q u e s t i o n n a i r e s .

Dorine McConnell, T i t i l i a Barbour, K i n i Suschnigg, and E f f r e n Bonham d i d the typing and a considerable p o r t i o n of the e d i t i n g . M i c h a e l Shiroma prepared the maps and most of the other i l l u s t r a t i o n s .

Comments on the d r a f t s were received from Antonio Actouka, Thomas H a l l , S u l i a n a Siwatibau (United Nations Development Programme—Suva), Peter Johnston (United Nations P a c i f i c Energy Development Programme), and East-West Center colleagues Marcia Gowen, Michael P. Hamnett, and W.S. P i n t z .

To a l l of the above and to those not mentioned who gave f r e e l y of t h e i r time, thank you.

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LIST OF ABBREVIATIONS

AAGR Average Annual Growth Rate ADB Asian Development Bank c . i . f . c o s t , insurance, and f r e i g h t CPI Consumer P r i c e Index DOE Department of Energy (U.S.) f.o.b. f r e e on board FSM Federated S t a t e s of M i c r o n e s i a FY F i s c a l Year (U.S.: From October 1 to September 30) HIES Household Income and Expenditure Survey kg kilogram km kilometer km 2 square k i l o m e t e r kva k i l o v o l t amperes kw k i l o w a t t kwh k i l o w a t t hours n.e.c. not elsewhere c i t e d OPS-FSM O f f i c e of Planning and S t a t i s t i c s - FSM OPS-Pohnpei O f f i c e of P l a n n i n g and S t a t i s t i c s - State of Pohnpei OPS-TTPI O f f i c e of P l a n n i n g and S t a t i s t i c s - TTPI ( l o c a t e d i n

the Northern Marianas) PEP P a c i f i c Energy Program SITC Standard I n t e r n a t i o n a l Trade C l a s s i f i c a t i o n TTPI Trust T e r r i t o r y of the P a c i f i c I s l a n d s

Numerical u n i t s

1. A l l f i g u r e s are metric unless noted. 2. A l l d o l l a r s are i n current US$ unless noted. The study was conducted

i n 1983. At that time, there was no Consumer P r i c e Index (or other i n d i c e s of i n f l a t i o n ) . A p p l y i n g U.S. r a t e s could be m i s l e a d i n g s i n c e i n c r e a s e s i n t r a n s p o r t a t i o n c o s t s could be understated, w h i l e the p r i c e of goods and s e r v i c e s could be overstated due to d i f f e r e n t consumption patterns (between the United S t a t e s and the Federated States of M i c r o n e s i a ) .

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EXECUTIVE SUMMARY

The purpose of t h i s study of r u r a l e l e c t r i f i c a t i o n on the Micronesian i s l a n d of Pohnpei i s to assess the impact of e l e c t r i c i t y on c u l t u r e , Income d i s t r i b u t i o n , and development. The study a l s o attempts to e s t a b l i s h a b a s e l i n e to f a c i l i t a t e the design of more appropriate and b e n e f i c i a l r u r a l e l e c t r i f i c a t i o n p r o j e c t s i n the P a c i f i c . In reviewing the l i t e r a t u r e on r u r a l e l e c t r i f i c a t i o n , the author found that many s t u d i e s appear to concent r a t e on t r y i n g to show a cause and e f f e c t r e l a t i o n s h i p between r u r a l e l e c t r i f i c a t i o n and development, without c o n c l u s i v e r e s u l t s (ADB: October 1983). In c o n t r a s t , t h i s study focuses on the household as the u n i t f o r a n a l y s i s and places the r o l e of e l e c t r i c i t y i n the context of a household's u t i l i z a t i o n of a l l of i t s resources.

The household resources, which have been d e t a i l e d , i n c l u d e income— both subsistence (or nonmarket production) and cash (economic a c t i v i t y or employment)—and the use of time. In general the d i r e c t use of e l e c t r i c i t y and energy play minor r o l e s . Given the focus of t h i s study, a high p r i o r i ty has been to e s t a b l i s h b a s e l i n e data to assess the broader I m p l i c a t i o n s of development. I s o l a t i n g or I d e n t i f y i n g the r o l e of e l e c t r i c i t y i n development, or i t s s p e c i f i c impact on c u l t u r e , i s d i f f i c u l t because many other f a c t o r s are i n v o l v e d .

The i s l a n d of Pohnpei i s the major land mass i n the State of Pohnpei and the residence f o r 90 percent of the s t a t e ' s population (1980 popul a t i o n : 23,000). The State of Pohnpei I s one of four comprising the Federated States of M i c r o n e s i a (FSM). Formerly administered as a component of the United Nations S e c u r i t y Trusteeship of Micronesia from Saipan i n the Northern Mariana I s l a n d s , the FSM Is scheduled to begin a Compact of Free A s s o c i a t i o n w i t h the United States (the t r u s t e e s h i p a d m i n i s t r a t o r ) i n 1985.

Pohnpei 1s c o l o n i a l past has r e s u l t e d i n an a r t i f i c i a l and dual economy. R u r a l production i s l i m i t e d to the subsistence s e c t o r . Monetized urban l i f e - s t y l e s are h e a v i l y s u b s i d i z e d by U.S. a i d i n f l o w s . With l i m i t e d commercial development of n a t u r a l resources, imports exceed domestic exports- by a r a t i o of 20:1. The trade imbalance i s o f f s e t by U.S. a i d .

Firewood i s commonly used f o r cooking. In r u r a l areas, kerosene and benzine are used f o r l i g h t i n g . Many urban r e s i d e n t s use e l e c t r i c i t y f o r l i g h t i n g , although lower-Income groups continue to use kerosene. The e l e c t r i c i t y g r i d I s being extended to r u r a l areas. E l e c t r i c i t y t a r i f f s are $0.03/kwh (to 1,000 kwh/month) and $0.08/kwh (over 1,000 kwh/month) compared to estimated production costs of $0.0248/kwh. Approximately 21 percent of the s t a t e ' s annual operating budget i s used to purchase d i e s e l f o r e l e c t r i c i t y production. However, only 10 to 15 percent of the s t a t e ' s p o p u l a t i o n use e l e c t r i c i t y . Government consumption, o f t e n unmetered, accounts f o r n e a r l y 60 percent of e l e c t r i c i t y production.


The study makes the f o l l o w i n g observations and draws the f o l l o w i n g c o n c l u s i o n s :

P l a n n i n g R u r a l E l e c t r i f i c a t i o n

1. There are no stated r u r a l e l e c t r i f i c a t i o n p o l i c i e s or o b j e c t i v e s aside from g r i d extension.

2. The d e c i s i o n to provide e l e c t r i c i t y to an area i s made by c e n t r a l agencies w i t h l i t t l e or no community input.

3. However, e l e c t r i c i t y i s a des i r e d s e r v i c e as stated by the enumerated households.

4. As a community p r i o r i t y , e l e c t r i c i t y t r a i l s improved s a n i t a t i o n , water supply, roads, and community p a r t i c i p a t i o n i n the planning process (as i n d i c a t e d by the enumerated households).

The Cost of E l e c t r i c i t y

5. Given the current low t a r i f f s t r u c t u r e s ( l e s s than one-eighth of the t o t a l cost of pro d u c t i o n ) , the e n t i r e s t a t e ' s p o p u l a t i o n i s s u b s i d i z i n g e l e c t r i c i t y that i s p h y s i c a l l y a v a i l a b l e to only one-quarter of the population and used by only one-eighth.

6. Because f u e l costs alone f o r e l e c t r i c i t y production consume over 20 percent of the s t a t e ' s t o t a l annual operating budget, many development needs and p r i o r i t i e s are l e f t unmet.

7. Increased t a r i f f r a t e s are necessary.

8. Revised t a r i f f r a t e s should include l i f e l i n e rates (e.g., l e s s than 100 kwh/month).

9. Without an extended repayment period (e.g., 12 months) f o r bas i c r e t i c u l a t i o n , cash-poor r u r a l r e s i d e n t s w i l l have co n s i d e r a b l e d i f f i c u l t y using e l e c t r i c i t y because they w i l l be unable to a f f o r d hookup and w i r i n g charges.

The D i s t r i b u t i o n of Income

10. Income i s a major determinant i n the amount of e l e c t r i c i t y consumed and i n the range of i t s uses and a p p l i c a t i o n s . Those w i t h higher cash incomes consume more e l e c t r i c i t y and use i t i n a wider range of a p p l i c a t i o n s .

11. Because s u b s t a n t i a l d i v i s i o n s already e x i s t i n the standard of l i v i n g between income groups and between r u r a l and urban areas, e l e c t r i c i t y i s seen as widening these d i v i s i o n s , given that only those i n the higher-income groups are able to f u l l y e x p l o i t i t .

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12. The impact of these widening d i v i s i o n s on Pohnpeian c u l t u r e s cannot be a s c e r t a i n e d .

13. T a r i f f increases ( t o the f u l l cost of production) could n e g a t i v e l y a f f e c t the flow of cash and goods, i n c l u d i n g t r a d i t i o n a l o b l i g a t i o n s , between f a m i l y and community members because those now p r o v i d i n g support w i l l have l e s s money. The a l t e r n a t i v e i s f o r upper-Income groups to decrease t h e i r current consumption r a t e s .

Conservation

14. There i s a need to develop an educational campaign In the schools and through the media (e.g., r a d i o ) , emphasizing the safe use and conserv a t i o n of e l e c t r i c i t y .

15. Low Import d u t i e s f a c i l i t a t e the importation of i n t e n s i v e a p p l i a n c e s . A n a l y s i s should be undertaken on r a i s i n g import d u t i e s f o r e l e c t r i c a l a ppliances and should incorporate c r i t e r i a on the ba s i s of energy e f f i c i e n c y and s u b s t i t u t a b i l l t y o p tions.

16. I n c r e a s i n g import d u t i e s f o r e l e c t r i c a l a p p l i a n c e s , i n c l u d i n g d i f f e r e n t i a l l y higher r a t e s f o r i n e f f i c i e n t or undesirable ones (e.g., e l e c t r i c stoves) could be considered as a means to broaden the government's tax base.

17. In a d d i t i o n to the state-proposed energy p r o j e c t s and o b j e c t i v e s , a t t e n t i o n should be given to developing a database on the end uses of e l e c t r i c i t y . At present, the focus i s on supply and demand data that do not r e f l e c t whether e l e c t r i c i t y i s being optimized by the consumers. Thus i t i s u n c e r t a i n what r o l e e l e c t r i c i t y i s p l a y i n g i n the o v e r a l l development e f f o r t s .

18. C o n s i d e r a t i o n could be given to e s t a b l i s h i n g a program that would enable the r e t r o f i t t i n g of i n e f f i c i e n t b u i l d i n g s and other major consumers.

19. Given the widespread use of wood f o r cooking, Increased a t t e n t i o n should be given to improving the e f f i c i e n c y of i t s use and to reducing u n h e a l t h f u l cooking c o n d i t i o n s .

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Chapter 1: DEVELOPMENT OF THE STUDY

Composed of the heads of government from P a c i f i c I s l a n d n a t i o n s , the Standing Committee of the P a c i f i c I s l a n d s Conference has d i r e c t e d that PIDP's P a c i f i c Energy P r o j e c t include a component on r u r a l e l e c t r i f i c a t i o n . The purpose of the r u r a l e l e c t r i f i c a t i o n component i s to assess s e v e r a l of the e a r l y r u r a l e l e c t r i f i c a t i o n p r o j e c t s i n the P a c i f i c w i t h respect to (1) how people have benefited from these p r o j e c t s and (2) how futu r e p r o j e c t s can be improved to increase b e n e f i t s . To meet these o b j e c t i v e s , case s t u d i e s were undertaken i n P o l y n e s i a , Melanesia, and, as represented here, M i c r o n e s i a . The r e s u l t s of the case s t u d i e s were compared and evaluated i n a workshop held In October 1984 w i t h a focus on p r o v i d i n g d e c i s i o n makers w i t h data a p p l i c a b l e to fu t u r e p r o j e c t s .

I d e n t i f y i n g a S i t e

The i s l a n d of Pohnpei (estimated 1980 population: 20,318 [1980 Pop u l a t i o n Census: 1981]) was s e l e c t e d as a study l o c a t i o n because I t s e l e c t r i c i t y g r i d was being extended to r u r a l areas, and Pohnpei therefore provided a cont r a s t to case s t u d i e s of small I s l a n d s having t h e i r own systems. As o r i g i n a l l y envisaged, the study was to have concentrated on an area that had r e c e n t l y received power. Closer examination, however, revealed that there were too few users i n the proposed area and that they had begun r e c e i v i n g e l e c t r i c i t y only l e s s than a month p r i o r to the study.

Hence, PIDP decided to assess two areas on Pohnpei: the o r i g i n a l , Uh, a r u r a l m u n i c i p a l i t y dominated by subsistence production and loca t e d roughly 12 km from the c a p i t a l , K o l o n i a (1980 population: 5,550); and Sokehs I s l a n d , a periurban area adjacent to the c a p i t a l that has had e l e c t r i c i t y f o r approximately four to f i v e years. Although the l o c a t i o n s of the two s i t e s are markedly d i f f e r e n t , there are s e v e r a l advantages to comparing them. F i r s t and foremost, the two s i t e s would provide, even w i t h a l i m i t e d sample, a database where e s s e n t i a l l y none e x i s t e d . Second, the two s i t e s would enable cross-checking of household income and expenditure data. T h i r d , a comparison of the two s i t e s would suggest p o s s i b l e s h i f t s by r u r a l r e s i d e n t s i n t h e i r consumption patterns as access to g r i d Increased, r u r a l Income rose, and the period of time people use e l e c t r i c i ty i n c r e a s e d . (See f i g u r e s 1.1-1.4.)

Focus of the Study

The broad emphasis of the study has been to analyze e l e c t r i c i t y i n the context of the o v e r a l l use of resources by i n d i v i d u a l households. Thus e l e c t r i c i t y has a l i m i t e d r o l e w i t h respect to other f a c t o r s . The l i m i t e d a t t e n t i o n given to the aggregate, or s t a t e , l e v e l has focused on presenting a general p i c t u r e of e l e c t r i c i t y use, p o l i c y , and development g o a l s .


P a c i f i c I s l a n d s D e v e l o p m e n t P r o g r a m

E a s t - W e s t C e n t e r

F T — i — i — i — i — i — i — i — i — i — i — i — i — i — i — i — i — i — i — m — i — i — r ~ i — r ~ n KOLONIA

PONAPE ISLAND PONAPE DISTRICT ELECTRICAL ROUTE: •••••• EXISTING coo- PROPOSED

Kilometers

0 1 I 2 3 4 5 6 7 ' 8 9 1C

/ \ \

SOKEHS Study Area

K pi 'So'/

Study Area

ti * ^

V, ^«S"0 ft \

J I I I I I I I I I I I I I I I I I I L_U I L I I L Figure 1.2. Map of Pohnpei Island.

g Figure 1.3. Map of Uh study area.

Figure 1.4. Map of Sokehs study area.


At the household l e v e l (chapters 4 and 5 ) , f i e l d research has been conducted i n the above-mentioned areas. Emphasis has been on p l a c i n g e l e c t r i c i t y i n the context of o v e r a l l household resources. At t h i s l e v e l , the use of e l e c t r i c i t y as a means to achieve s p e c i f i c end uses, such as l i g h t i n g f o r studying or r e f r i g e r a t i o n , can be i d e n t i f i e d .

Another i s s u e r e q u i r i n g a t t e n t i o n i s the d i s t r i b u t i o n of income and opportunity among the various households. What was a n t i c i p a t e d , and then v e r i f i e d by the f i e l d i n v e s t i g a t i o n , i s that those households w i t h higher cash incomes, which a l s o r e f l e c t s p u b l i c - s e c t o r employment and higher l e v e l s of educational achievement, make more use of an imported technology such as e l e c t r i c i t y . The way i n which t h i s a f f e c t s the c u l t u r a l and s o c i a l f a b r i c of a s p e c i f i c community i s ambiguous. This ambiguity stems l a r g e l y from the f a c t that many f a c t o r s cause d i s t r i b u t i o n a l i n e q u i t i e s . U n f o r t u n a t e l y , many of these f a c t o r s , or forces of "change," are d i f f i c u l t to i d e n t i f y and i s o l a t e . S i m i l a r l y , cause and e f f e c t r e l a t i o n s h i p s are unc l e a r , and attempts to r e l a t e , f o r example, r u r a l e l e c t r i f i c a t i o n to economic and s o c i a l development have not been completely s u c c e s s f u l (ADB: October 1983).

Thus, at the household l e v e l , the data are e s s e n t i a l l y d e s c r i p t i v e and e s t a b l i s h a ba s e l i n e f o r fu t u r e and comparative analyses. The data i n d i c a t e the ways i n which var i o u s types of resources are u t i l i z e d by households w i t h d i f f e r e n t c h a r a c t e r i s t i c s (e.g., income and e d u c a t i o n a l l e v e l s ) . This i n f o r m a t i o n , i n e f f e c t , forms a b a s i s f o r the p o l i c y a n a l y s i s .

The Questionnaires

To assess the u t i l i z a t i o n of household resources, a set of que s t i o n n a i r e s was developed. The household q u e s t i o n n a i r e s were based on (1) the 1977 F i j i Household Income and Expenditure Survey (HIES), (2) a community assessment survey that has been used i n F i j i ( R i z e r et a l . : 1982), and (3) a s o c i o l o g i c a l study of an i s o l a t e d r u r a l F i j i a n v i l l a g e (Mamak: 1977). Corresponding data on Pohnpei or Mi c r o n e s i a were not I d e n t i f i e d .

Other q u e s t i o n n a i r e s were a l s o reviewed. I n p a r t i c u l a r , the A s i a n Development Bank's Regional R u r a l E l e c t r i f i c a t i o n Survey (ADB: March 1983) provided u s e f u l i n f o r m a t i o n on the t e c h n i c a l aspects of e l e c t r i c i t y and e l e c t r i f i c a t i o n assessment. Applying the ADB qu e s t i o n n a i r e proved d i f f i c u l t because i t was designed f o r much l a r g e r regions where measures such as changes i n economic production could be s i g n i f i c a n t . I n the case of much smaller areas, the equations are not e a s i l y t r a n s f e r r e d because the j u s t i f i c a t i o n s f o r e l e c t r i f i c a t i o n are v a s t l y d i f f e r e n t i n both theory and r e a l i t y .

The 1977 F i j i HIES questionnaire i n c l u d e s s e c t i o n s on housing c h a r a c t e r i s t i c s (e.g., c o n s t r u c t i o n m a t e r i a l s , water, and s a n i t a t i o n ) , access to resources (e.g., l a n d ) , and d a i l y d i a r i e s ( f o r two weeks) on cash and subsistence income, expenditures, and t r a n s f e r s (e.g., g i f t s

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and t r a d i t i o n a l o b l i g a t i o n s ) . The questionnaire taken from R i z e r et a l . (1982) i n c l u d e s sections on h e a l t h , education, employment and occupation, the use of time, the use of other resources (e.g., purchase or production of major items such as housing, v e h i c l e s , and c r o p s ) , and personal, househ o l d , community, and n a t i o n a l development goals. A. Mamak's questionnaire i n c l u d e s s e c t i o n s on communication, community dynamics, and community-n a t i o n a l i n t e r a c t i o n s . Added to the above were s e c t i o n s on household energy use, s p e c i f i c e l e c t r i c i t y - u s e p a t t e r n s , and assessment of wholesale and r e t a i l o u t l e t s . In a l l i n s t a n c e s , the survey forms were adapted f o r use on Pohnpei a f t e r a review by Pohnpeian o f f i c i a l s to ensure t h e i r a p p l i c a b i l i t y and p r a c t i c a l i t y .

Now that the r e s u l t s have been reviewed, s e v e r a l inadequacies have been determined. S p e c i f i c a l l y , q u e s t ionnaire s e c t i o n s provided inadequate data f o r cash expenditure on t r a n s p o r t , entertainment ( i n c l u d i n g gambling), and t r a n s f e r s between f a m i l y members (e.g., a r e l a t i v e working i n the c a p i t a l provides cash to a r e l a t i v e who farms i n a r u r a l area i n exchange f o r goods such as yams and pork), and a l c o h o l and tobacco. However, i t should a l s o be noted that few surveys would s t a t e that data on such Items as a l c o h o l and tobacco or gambling were t o t a l l y accurate.

The data presented below are as c o l l e c t e d : only one adjustment was made f o r one household's transport expenditure (see Table 4.10). Where p r i c e s have been used, they have been based on wholesale and r e t a i l o u t l e t s , producers' records, and the UN Ag Census 1978-1979. Where quant i t y estimates have been used, they have been taken from the Ag Census and two energy s t u d i e s conducted i n F i j i (Siwatibau: 1978; L l o y d et a l . : 1982).

Planning the Study

The s e l e c t i o n of two areas meant that the o r i g i n a l time schedule and study o b j e c t i v e s had to be s u b s t a n t i a l l y modified. The o r i g i n a l concept was to administer two d i f f e r e n t sets of household questionnaires to two sets of 15 households during a six-week period on Pohnpei. With two s i t e s , the q u e s t i o n n a i r e s had to be i n t e g r a t e d i n t o one and the number of households s u b s t a n t i a l l y increased. The o r i g i n a l p l a n i n c l u d e d a conserv a t i v e wastage f a c t o r of 33 percent per q u e s t i o n n a i r e , l e a v i n g a t o t a l of 20 households. In the r e v i s e d study p l a n , 40 households were deemed acceptable. Due to time c o n s t r a i n t s , however, the wastage f a c t o r was reduced to 23 percent; thus 52 households were surveyed. Although the estimated wastage f a c t o r s may appear high, they r e f l e c t the problems that other surveys have had on Pohnpei: the 1970 Census had to be repeated i n 1973 due to i n a c c u r a c i e s ; the 1980 Census has had r e s u l t s questioned; and, the UN-funded Ag Census c o l l e c t e d income and expenditure f o r only s i x households out of a targeted 120 households.

The l a r g e r sample meant that four rather than two f i e l d enumerators would be necessary. T h i s , In the context of only a six-week period on Pohnpei, meant that t r a i n i n g f o r the enumerators i n the use of the

11


q u e s t i o n n a i r e s would be abbreviated and that f u l l - t i m e f i e l d s u p e r v i s i o n was a b s o l u t e l y necessary. In t u r n , t h i s s i t u a t i o n placed considerable emphasis on s e l e c t i n g the best enumerators a v a i l a b l e . Enumerators were recommended by various p a r t i e s , the best were s e l e c t e d , and they performed an e x c e l l e n t job. However, none had had any previous experience w i t h d e t a i l e d income and expenditure surveys, although two had worked on the 1980 Census.

Regarding the n o t i o n of a wastage f a c t o r , the study was based on the household q u e s t i o n n a i r e s that included two-week d a i l y d i a r i e s on income and expenditure, both cash and subsistence (or nonmoney t r a n s f e r s and p r o d u c t i o n ) . Due to c e r t a i n scheduling problems (e.g., t r a i n i n g ) the enumerators were i n the f i e l d i n some instances up to three weeks. During a three-week period i n the l i v e s of more than 350 people who l i v e i n f a i r l y t i g h t - k n i t communities, there are bound to be events that i n t e r r u p t schedules. This study was no d i f f e r e n t . For example, a high-ranking c h i e f d i e d , and that meant that work i n one area e s s e n t i a l l y ceased f o r one week. Thus, data from 52 households were c o l l e c t e d on only populat i o n , education, economic a c t i v i t y , household possessions, housing, a t t i t u d e s toward e l e c t r i c i t y , and energy. Complete data on household Income and expenditure were c o l l e c t e d from 40 households.

The households surveyed i n the study were s e l e c t e d i n c o n j u n c t i o n w i t h area leaders and, i n c e r t a i n r e s p e c t s , the community i t s e l f on the b a s i s of the f o l l o w i n g s u b j e c t s :

• Income l e v e l s • Occupations . Demographic c h a r a c t e r i s t i c s . Housing c h a r a c t e r i s t i c s . Energy sources and end uses

S e v e r a l a d d i t i o n a l f a c t o r s a f f e c t e d the study. F i r s t , the nature of the q u e s t i o n n a i r e r e q u i r e d a household to open i t s e l f to nonfamily members. In Pohnpeian c u l t u r e , many a c t i v i t i e s , i n c l u d i n g subsistence production of items such as yams (a s t a p l e ) , are t r a d i t i o n a l l y " s e c r e t . " Thus, i n f o r m a t i o n on yam production i s not t o t a l l y accurate: some households revealed data w h i l e many d i d not. Second, the study was conducted a f t e r a major drought. Under a U.S. Department of A g r i c u l t u r e food a i d program to a l l e v i a t e the e f f e c t s of the drought, f r e e food s u p p l i e s were d i s t r i b u t e d . Some households I n i t i a l l y were r e l u c t a n t to r e l e a s e data because they thought the study was an assessment f o r the food program. They wanted to appear as severely a f f e c t e d by the drought as p o s s i b l e i n order to r e c e i v e more f r e e food. Through r a d i o releases and the e f f o r t s of the f i e l d enumerators and community l e a d e r s , t h e i r concerns d i s s i p a t e d over time. However, three to four e x t r a days were r e q u i r e d to complete the survey i n Uh. Last but not l e a s t , i t was not always p o s s i b l e to c o l l e c t data from a l l household members on a d a i l y b a s i s . For example, people would have to go to the h o s p i t a l to v i s i t a r e l a t i v e , or rough weather would delay a boat's r e t u r n from f i s h i n g . Absences required follow-up by the enumerators.

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Chapter 2. POHNPEI: AN OVERVIEW

The State of Pohnpei has a population of 23,000 (1980) w i t h roughly 90 percent r e s i d i n g on the main i s l a n d , Pohnpei. The Average Annual Growth Rate (AAGR) of 2.55 percent f o r the period 1973-80 i s s l i g h t l y higher than the r a t e f o r the period 1948-70, 2.45 percent. U r b a n i z a t i o n i s i n c r e a s i n g , and the only urban center, K o l o n i a , i s projected to grow at a 3.47 percent AAGR over the period 1973-88.

Approximately 70 percent of the l a b o r force i s employed In the noncash " v i l l a g e " economy. Of those employed i n the cash economy, 60 percent work i n the p u b l i c s e c t o r . Of p u b l i c sector expenditures, 80 percent are funded by U.S. a i d .

Thus, the economy could be termed a r t i f i c i a l (U.S. a i d ) and d u a l i s t i c (cash:noncash). With the value of imports ($16 m i l l i o n i n 1982) roughly equal to estimated Gross Domestic Expenditure ($15 m i l l i o n i n 1980, the most recent f i g u r e a v a i l a b l e ) , the economy i s a l s o one of the most open i n the world. The value of imports exceeds domestic exports by a p p r o x i mately 20:1. Aside from the noncash v i l l a g e economy, domestic production, whether a g r i c u l t u r e or manufacturing, i s minimal. A major revenue source i s the e x p l o i t a t i o n of migratory tuna schools by the Japanese f i s h i n g f l e e t that paid $2.5 m i l l i o n (5 percent of the value of the t o t a l catch) i n 1980 to f i s h i n the Federated States of Micronesia's waters.

The f o l l o w i n g s e c t i o n provides a b r i e f overview of Pohnpei's n a t u r a l c h a r a c t e r i s t i c s , h i s t o r y , and s e r v i c e s such as t r a n s p o r t a t i o n and h e a l t h . More d e t a i l e d analyses of the economy, p o p u l a t i o n , and l a b o r force may be found i n the appendices.

L o c a t i o n

The East C a r o l i n e I s l a n d of Pohnpei i s l o c a t e d at 6°45' N and 158°15' E. Pohnpei i s roughly 3,800 km east of M a n i l a , 3,000 km south-southeast of Tokyo, 4,300 km west-southwest of Honolulu, and 800 km north of the equator. The pentagon-shaped I s l a n d has a land area of 334.1 krn^ and a lagoon area of 178.5 km^ and i s approximately 21 km i n diameter.

Pohnpei i s one of the more than 600 i s l a n d s comprising the Federated States of Micronesia (FSM), which are spread over 2.5 m i l l i o n km^ of ocean. Pohnpei*s only urban center, K o l o n i a , serves as the c a p i t o l of both the State of Pohnpei and the FSM. (The other s t a t e s i n the FSM are Truk, Yap, and Kosrae.)

P h y s i c a l C h a r a c t e r i s t i c s

A high v o l c a n i c I s l a n d , Pohnpei has a rugged i n t e r i o r w i t h steep c l i f f s , k n i f e - l i k e r i d g e s , and river-formed narrow v a l l e y s . A number of peaks are In excess of 600 meters w i t h the h i g h e s t , Nahnalaud, at 800


meters. C o a s t a l areas are f l a t and narrow, u s u a l l y edged by mangroves. Pohnpei i s e n c i r c l e d by a s e r i e s of i n n e r - f r i n g i n g r e e f s , deep lagoons, and an outer r e e f . A number of i s l e t s , some i n h a b i t e d , are l o c a t e d immediately o f f s h o r e .

R a i n f a l l i s heavy, averaging n e a r l y 5 meters per year f o r K o l o n i a (on the coast) and 9 to 10 meters per year i n the i n t e r i o r . A p r i l and May are the wettest months; January and February, the d r i e s t . Temperatures vary only s l i g h t l y w i t h highs near 29°C, lows approximating 24°C, and a y e a r l y average of 27°C. Average humidity i s roughly 80 percent. Cloud cover occurs d a i l y .

The b a s a l t parent rocks i n combination w i t h the high average temperature and heavy r a i n f a l l have formed l a t e r i t e s o i l s . Low i n organic content and subject to heavy l e a c h i n g , l a t e r i t e s are not conducive to commercial a g r i c u l t u r e . They do, however, have the p h y s i c a l and chemical p r o p e r t i e s necessary f o r use as a b u i l d i n g m a t e r i a l . C o r a l ( c a l c i u m carbonate) i s common and used f o r c o n s t r u c t i o n . Small deposits of phosphate and bauxite c u r r e n t l y have uneconomic p o t e n t i a l f o r e x p l o i t a t i o n .

F l o r a and Fauna

The dense t r o p i c a l v e g etation h a b i t a t s ranges from mangroves and s a l t w a t e r marsh to freshwater marsh to r a i n f o r e s t . T r o p i c a l hardwoods (e.g., monkeypod), pandanus, t a l l grasses, f e r n s , herbaceous f l o w e r i n g p l a n t s (e.g., o r c h i d s ) , h i b i s c u s , and coconut palms are common. Breadf r u i t , papaya, and banana trees are a l s o widespread.

Most fauna have been introduced, i n c l u d i n g p i g s , dogs, c a t s , deer, mice, and r a t s . Skinks, bats, l i z a r d s , geckos, and toads are u b i q u i t o u s ; no species of snakes have been i d e n t i f i e d . T r o p i c a l b i r d s — l a n d and s e a — a r e common.

Sea l i f e i s abundant i n both v a r i e t y and q u a n t i t y . C o r a l s , mangrove crabs, seaweeds, damselfish, sharks, and p a r r o t f i s h t y p i f y l i f e In the v a r i o u s marine h a b i t a t s . Migratory tuna schools ( p r i m a r i l y y e l l o w f i n and blgeye and t u n a - l i k e f i s h such as s k i p j a c k ) are s u b s t a n t i a l i n number.

H i s t o r y

I t has been estimated that the o r i g i n a l s e t t l e r s of Pohnpei a r r i v e d v i a the G i l b e r t and M a r s h a l l I s l a n d s i n the millenium p r i o r to the C h r i s t i a n Era (1000 B.C. to 0 A.D.). L i t t l e i s known of the c u l t u r e s before the period of European contact although a r c h a e o l o g i c a l work i s i n progress. S e v e r a l s i t e s , i n c l u d i n g Awak and the massive b a s a l t s t r u c t u r e s at Nan Madol, have y i e l d e d a glimpse of the housing, drainage, and a g r i c u l t u r a l p a t t e r n s ; but excavation and analyses are as yet incomplete. The r u i n s at Nan Madol i n c l u d e approximately 90 a r t i f i c i a l i s l a n d s and connecting waterways, representing a f l o u r i s h i n g and s o p h i s t i c a t e d c u l t u r e of the eleventh century. The r u i n s were uninhabited at the time of European contact.

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European contact occurred during the s i x t e e n t h century through the Spanish presence i n the Marianas. During the Spanish period contact remained l i m i t e d to an occasional g a l l e o n and a few p r i e s t s .

German occupation, begun i n 1898, produced major changes because the c o l o n i a l power was i n t e r e s t e d i n e x p l o i t i n g Pohnpei fs resources, mainly copra. Land reform, i n i t i a t e d i n 1912, determined that a l l s u i t a b l e land should be developed ( f o r economic reasons) and that "unused" land belonged to the government. These a c t i o n s , i n e f f e c t , destroyed the t r a d i t i o n a l ownership patterns and considerably lessened the power and a u t h o r i t y of the Pohnpeian n o b i l i t y . During the b r i e f German occupation, roads were b u i l t , and h e a l t h and educational s e r v i c e s were increased (OPS-TTPI: 1979).

The b r i e f German period of domination ended i n 1914 w i t h Japan's s e i z u r e of M i c r o n e s i a . The Japanese occupation, l a s t i n g u n t i l 1945, u t i l i z e d M i c r o n e s i a f o r i t s primary resources f o r prewar Japan. Administ r a t i v e and m i l i t a r y presence was e s t a b l i s h e d , a g r i c u l t u r a l and marine resources were e x p l o i t e d to feed Japan's p o p u l a t i o n , and s e t t l e r s were brought i n as a means to r e l i e v e population pressure i n Japan. By 1938, over 58 percent of Micronesia's t o t a l p o p ulation was of Japanese o r i g i n .

World War I I i n i t s e l f d i d not expose Pohnpei to the harsh, f i g h t i n g that occurred on Saipan i n the Northern Marianas and on P e l e l i u In Palau. There was some naval s h e l l i n g and a e r i a l bombing of the minor Japanese m i l i t a r y i n s t a l l a t i o n s but no major or widespread d e s t r u c t i o n to the i s l a n d . However, as Japan's m i l i t a r y c a p a b i l i t y waned, shipping became l e s s frequent, causing the o v e r e x p l o l t a t i o n of land and marine resources i n order to feed the s e t t l e r p o p ulation (OPS-TTPI: 1979).

At the end of the war, the United States became the a d m i n i s t r a t o r of the United Nations S e c u r i t y Trusteeship of M i c r o n e s i a . U n t i l 1963, M i c r o n e s i a was m i l i t a r i l y I s o l a t e d and thus e f f e c t i v e l y cut o f f from the r e s t of the world. On Pohnpei l i t t l e , i f any, economic development occurred. Even w i t h the end of the p r o h i b i t i o n on f o r e i g n Investment i n 1973, s o c i a l and economic development under the U.S. a d m i n i s t r a t i o n has been minimal. Donald D. McHenry, former U.S. ambassador to the United Nations, s a i d i n h i s book M i c r o n e s i a — A Trust Betrayed (1975) that "United States economic development was a dismal f a i l u r e . "

With the formation of the bicameral Congress of Micronesia i n 1965, a major o b j e c t i v e has been independence from the United S t a t e s . Micrones i a c o n s i s t s of four separate e n t i t i e s : the Commonwealth of the Northern Marianas, the Republic of Belau, the Republic of the M a r s h a l l I s l a n d s , and the Federated S t a t e s of Micronesia (Pohnpei, Yap, Truk, and Kosrae S t a t e s ) .

The FSM i s scheduled to begin a 15-year Compact of Free A s s o c i a t i o n w i t h the United States i n 1985. This w i l l allow the FSM to f u n c t i o n as an independent na t i o n i n a l l respects except f o r c e r t a i n defense and s e c u r i t y i s s u e s . Under the compact, the United States w i l l provide the FSM w i t h

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$60 m i l l i o n annually f o r the f i r s t f i v e years, $51 m i l l i o n a nnually f o r the second f i v e years, and $40 m i l l i o n annually f o r the f i n a l f i v e years (not i n c l u d i n g adjustment f o r i n f l a t i o n ) . During the f i r s t f i v e years, 44.4 percent of the $60 m i l l i o n annual p r o v i s i o n ($26,645 m i l l i o n ) w i l l be spent on c a p i t a l development. Of t h i s share, Pohnpei S t a t e w i l l r e c e i v e 25.45 percent, or $6,781 m i l l i o n , a nnually (OPS-Pohnpei: 1983). A d d i t i o n a l funds w i l l probably be spent by the FSM Government i n Pohnpei State on c a p i t a l development. Wages and s a l a r i e s (funded through the compact) of both Pohnpei State and FSM Government employees w i l l continue to c o n s t i t u t e a major share of the Pohnpei economy.

Thus, as the FSM terminates i t s c o l o n i a l p e r i o d , i t i s assured of r e c e i v i n g considerable f i n a n c i a l a s s i s t a n c e from the United S t a t e s . However, the e f f e c t s of c o l o n i a l r u l e have been v a s t . The subsistence economy has d e t e r i o r a t e d s u b s t a n t i a l l y and has been replaced l a r g e l y by a p u b l i c - s e c t o r bureaucracy and s e r v i c e s (e.g., w h o l e s a l i n g , r e t a i l i n g , and t r a n s p o r t ) that supply the imported goods demanded by those people earning wages and s a l a r i e s . For example, In 1980 the export of goods and s e r v i c e s from the s t a t e ( i n c l u d i n g tourism) was l e s s than l / 1 6 t h the value (f.o.b.) of imports (Pohnpei S t a t e S t a t i s t i c s O f f i c e : 1982). As imports f o r 1982 have increased, an estimated 60 percent (0PS-FSM: 1983), w i t h l i t t l e corresponding change i n exports, t h i s trade r e l a t i o n s h i p has worsened. Thus p o l i t i c a l independence w i l l not Include economic independence In the near f u t u r e .

Pohnpei S t a t e , the other s t a t e s , and the FSM Government are i n the process of preparing development plans. Although these plans attempt to meet both s t a t e and n a t i o n a l needs, they a l s o s a t i s f y the requirement of the U.S. Congress to determine expenditures during the f i r s t f i v e - y e a r p e r i o d of the compact. As such, the plans Include c a p i t a l development p r o j e c t s ranging from I n f r a s t r u c t u r e to h e a l t h s e r v i c e s , s m a l l - s c a l e i n d u s t r i e s , and commercial a g r i c u l t u r e . Even i f these p r o j e c t s are d e t e r mined v i a b l e , Pohnpei's (and the FSM's) small s i z e and d i s t a n t l o c a t i o n w i l l r e q u i r e an implementation machinery c o n s i d e r a b l y greater i n q u a l i t y and q u a n t i t y than the e x i s t i n g mechanisms.

T r a n s p o r t a t i o n and Communication

I n t e r n a t i o n a l t r a n s p o r t a t i o n i s provided by two a i r l i n e s : one f l y i n g from Guam to Honolulu and r e t u r n i n g (three times each way per week); the other f l y i n g from Nauru to Guam and r e t u r n i n g (once each way per week plus a one-way f l i g h t per week). Import of goods Is handled by f r e i g h t e r s a r r i v i n g d i r e c t l y from A u s t r a l i a , Japan, and the West Coast of the United S t a t e s , averaging one shipment per month from each point of o r i g i n . I n t e r i s l a n d t r a n s p o r t i s provided by one small a i r l i n e and government v e s s e l s .

The road system on Pohnpei I s l i m i t e d to paved roads i n K o l o n i a and a poorly maintained and unpaved road that n e a r l y c i r c l e s the I s l a n d . There are few feeder roads, e s p e c i a l l y going i n t o the i n t e r i o r , where

16


access i s gained by f o o t . Yet, w i t h over 1,000 r e g i s t e r e d v e h i c l e s (as of 1980), considerable use i s made of the road network. Although some p r i v a t e v e h i c l e s operate as t a x i s and haulers of f r e i g h t , there i s no p u b l i c t r a n s p o r t a t i o n .

I n t e r n a t i o n a l communication i s operated by a s a t e l l i t e s t a t i o n and the U.S. P o s t a l S e r v i c e . Telephone s e r v i c e i s a v a i l a b l e i n K o l o n i a , and r a d i o communication i s the mode between the outer i s l a n d s .

One AM r a d i o s t a t i o n and one FM s t a t i o n provide l o c a l programming. The t e l e v i s i o n s t a t i o n a v a i l a b l e only i n K o l o n i a imports programs ( i n c l u d i n g advertisements) from the United S t a t e s .

The FSM Government d i s t r i b u t e s a biweekly newsletter In the FSM, f o c u s i n g on p o l i t i c a l news. The only r e g u l a r newspaper Is flown In from Guam three times per week.

S o c i a l S e r v i c e s and Issues

Although most c h i l d r e n under 14 years of age attend s c h o o l , fewer than 20 percent over 14 years of age continue because only two high schools (one p u b l i c and one p r i v a t e ) e x i s t on the I s l a n d (Pham: 1982). In a d d i t i o n , the Community College of M i c r o n e s i a , which o f f e r s a two-year a s s o c i a t e degree, i s located In K o l o n i a and has an enrollment of a p p r o x i mately 100 students.

One h o s p i t a l (92 beds) i s i n K o l o n i a , and 22 d i s p e n s a r i e s are s c a t t e r e d throughout the s t a t e . A s u b s t a n t i a l p o r t i o n of the budget f o r h e a l t h s e r v i c e s i s used f o r p a t i e n t r e f e r r a l s from the outer I s l a n d s to K o l o n i a or from K o l o n i a to overseas f a c i l i t i e s (Onaga: 1982). The government h e a l t h s e r v i c e s charge a minimal fee. T r a d i t i o n a l medicine continues to be important, e s p e c i a l l y In areas d i s t a n t from h e a l t h f a c i l i t i e s (Onaga: 1982). He notes that t r a d i t i o n a l medicines are o f t e n a p p l i e d side-by-side Western-style p r a c t i c e s .

Onaga w r i t e s that I n f e c t i o n s and g a s t r o i n t e s t i n a l and p a r a s i t i c diseases are "major concerns." He adds that these diseases are " l a r g e l y preventable and a s s o c i a t e d w i t h poor s a n i t a t i o n and hygiene, ... inadequate n u t r i t i o n ... and a l a c k of h e a l t h knowledge." He estimates that only 4,800 people (21 percent of the t o t a l population) have some type of protected water supply. Noting that i f water and sewage d i s p o s a l are a l s o considered, he c a l c u l a t e s that only 850 people (4 percent) have access. R e s p i r a t o r y I l l n e s s e s ( i n c l u d i n g t u b e r c u l o s i s and asthma), eye and ear d i s e a s e s , and "unknowns" are common.

The U.S. f e d e r a l programs operating on Pohnpei i n c l u d e the C h i l d N u t r i t i o n Program (U.S. Department of A g r i c u l t u r e ) , Environmental Health (U.S. Department of H e a l t h and Human S e r v i c e s ) , S o c i a l S e c u r i t y Administ r a t i o n , O f f i c e of Aging (U.S. Department of L a b o r ) , and Head S t a r t . A d d i t i o n a l l y , various church and community groups provide s o c i a l s e r v i c e s .

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However, the U.S.-funded and -designed s o c i a l programs have not met g l a r i n g needs such as secure water s u p p l i e s , s a n i t a t i o n , and the development of communities a c t i v e l y i n v o l v e d i n the planning process. The U.S. programs have a l s o had major negative impacts, i n c l u d i n g , as F. Manis (1981) notes from int e r v i e w s w i t h Micronesian l e a d e r s , dependency on government s e r v i c e s and s u b s i d i e s r a t h e r than s e l f - r e l i a n c e , urban b i a s , poor n u t r i t i o n , and a breakdown of t r a d i t i o n a l problem-solving p r a c t i c e s .

Manis a l s o c i t e s examples of the e f f e c t s of c u l t u r a l t r a n s i t i o n ( v i a the c o l o n i a l era) such as the high incidence of drug and a l c o h o l abuse, ( e s p e c i a l l y by young people), increased crime, v i o l e n c e , s u i c i d e r a t e s , and immigration. I n e f f e c t then, Pohnpei would seem to be a P a c i f i c i s l a n d s o c i e t y i n t r a n s i t i o n , one that has imported systems as i t s support base r a t h e r than i t s own t r a d i t i o n s .

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Chapter 3- RURAL ELECTRIFICATION: A CONTEXT

Pohnpei i s t o t a l l y dependent on Imported f u e l s f o r t r a n s p o r t a t i o n and e l e c t r i c i t y . Although no p u b l i c transport system e x i s t s , some p r i v a t e arrangements ( i . e . , p r i v a t e v e h i c l e s used as t a x i s and c a r r i e r s ) p a r t i a l l y meet the demand. Unmetered government consumption accounts f o r 56 percent of the t o t a l e l e c t r i c i t y consumption (DOE: 1982). The commercial and i n d u s t r i a l s e c t o r s account f o r 50 percent of metered consumption. U n t i l r e c e n t l y consumers were l i m i t e d to the area i n and around the c a p i t a l (approximately 25 percent of the p o p u l a t i o n ) . E l e c t r i c i t y t a r i f f rates are approximately one-eighth of the t o t a l cost of production. Because of unmetered consumption and h e a v i l y s u b s i d i z e d t a r i f f r a t e s , revenue from the s a l e of e l e c t r i c i t y amounts to roughly 8 percent of the t o t a l cost of production and d i s t r i b u t i o n .

Where a v a i l a b l e , e l e c t r i c i t y i s used f o r household l i g h t i n g . However, only about 25 percent of the s t a t e ' s p opulation has p h y s i c a l access to e l e c t r i c i t y , and only 10 to 15 percent of households are a c t u a l l y connected. Thus the bulk of the population r e l i e s mainly on kerosene and, to a l e s s e r extent, on benzine lamps. For cooking n e a r l y a l l households use firewood, which i s o f t e n complemented by s m a l l kerosene burners. The Ag Census of 1978-79 estimated that r u r a l households use 2,090 kg of f i r e wood per household per year (248 kg per c a p i t a ) . On the cost basis of $0.03/kg, t h i s firewood has an estimated nonmarket value of $128,000.*

E l e c t r i c i t y production (OPS-FSM: 1981) comes from e i g h t d i e s e l u n i t s : three 800 kw and three 500 kw high-speed C a t e r p i l l a r s and two 750 kw White S u p e r i o r s . Peak demand approximates 2,300 kw, which i s 43 percent of rated c a p a c i t y and 61 percent of f i r m c a p a c i t y . In 1980, 14.8 m i l l i o n kwh were produced, which approximates the production estimated f o r 1983 (S t a t e Department of Resource Conservation and S u r v e i l l a n c e : 1983).

To e s t a b l i s h a b a s e l i n e f o r the study, t h i s chapter b r i e f l y reviews current e l e c t r i c i t y use and proposed energy development In the context of Pohnpei's o v e r a l l development and de f a c t o r u r a l e l e c t r i f i c a t i o n p o l i c y . The a n a l y s i s has been l i m i t e d owing to the l a c k of both data and published p o l i c y d i r e c t i v e s .

*The f i g u r e of $0.03/kg i s from the Ag Census 1978-1979 and i s based on the cost of kerosene to produce an energy (heat) value equivalent to 1 kg of firewood. I t i s not based on market value since "No money i s inv o l v e d i n firewood g a t h e r i n g . " Slwatibau (1978) records costs of firewood i n the Suva ( F i j i ) periurban and urban areas as F$ 8 - l l / t o n n e (1978: F$1.00 = US$1,885. From Slwatibau. Bureau of S t a t i s t i c s f o r 4 t h Quarter 1978 gives F$1.00 o US$1.2200. Bureau of S t a t i s t i c s : 1982). L l o y d et a l . (1982) give F$4/tonne f o r Lautoka ( F i j i ) s a l e s and $3/tonne f o r Drasa F o r e s t r y S t a t i o n (2nd Quarter 1982: F $ l .00 = US$1.0654) (CES Bureau of S t a t i s t i c s : 1982).


S e l e c t e d Data on Current E l e c t r i c i t y Use

I n 1980 the value of a l l imports i n t o Pohnpei was US$12 m i l l i o n , and a l l domestic exports t o t a l e d $0.75 m i l l i o n . The value of a l l petroleum imports was $3 m i l l i o n , of which $1.3 m i l l i o n was f o r d i e s e l f u e l to produce e l e c t r i c i t y (OPS-FSM: 1982). Hence, the cost of f u e l f o r e l e c t r i c i t y p roduction plays a major r o l e i n Pohnpei's trade imbalance.

A l l P a c i f i c I s l a n d nations Import petroleum f u e l s , I n c l u d i n g d i e s e l , to produce e l e c t r i c i t y . None except Pohnpei, however, i s confronted w i t h the s i t u a t i o n where the cost of d i e s e l f u e l to produce e l e c t r i c i t y exceeds the value of a l l domestic exports by 73 percent ( P a c i f i c Energy Program: 1982b). T h i s r a i s e s s e r i o u s questions about how e l e c t r i c i t y has been used i n Pohnpei*s development e f f o r t s and how such a negative trade imbalance (imported d i e s e l f o r e l e c t r i c i t y versus t o t a l domestic exports) could have occurred.

Both questions are d i f f i c u l t to answer d e f i n i t i v e l y , but c e r t a i n data are a v a i l a b l e that imply p o s s i b l e answers. Table 3.1 compares Pohnpei ?s t a r i f f r a t e s w i t h s e l e c t e d P a c i f i c i s l a n d n a t i o n s . As the t a b l e shows, Pohnpei has by f a r the lowest t a r i f f s . This i s because a l l the nations l i s t e d except f o r the Cook I s l a n d s , which charges consumers the t o t a l c o s t , o f f e r l i m i t e d s u b s i d i e s to the consumer ( P a c i f i c Energy Program: 1982b). Pohnpei, on the other hand, h e a v i l y s u b s i d i z e s e l e c t r i c i t y prod u c t i o n , w i t h more than 80 percent of the cost being borne by the s t a t e government. This equates to approximately 21 percent of the s t a t e ' s t o t a l o p e r a t i n g budget (not i n c l u d i n g c a p i t a l development p r o j e c t s ) per year (OPS-FMS: 1981). I t must be stressed that t h i s f i g u r e (21 percent) i s based on f u e l costs ($0.12/kwh) and not on the cost of production ( i n c l u d i n g p l a n t d e p r e c i a t i o n and a l l other Items), which has been estimated to range from $0.21/ kwh ( S t a t e Department of Resource Conservation and S u r v e i l l a n c e ) to $0,248/ kwh ( P a c i f i c Energy Program: 1982a). Thus the a r t i f i c i a l l y low t a r i f f s t r u c t u r e can be viewed as being p r i m a r i l y respons i b l e f o r i n c r e a s i n g the l e v e l s of e l e c t r i c i t y consumption and hence f o r adding to the Import Imbalance.

Another part of the answer can be found i n Table 3.2. The data i n d i c a t e that only 44 percent of the t o t a l e l e c t r i c i t y produced i s b i l l e d to consumers. Apparently the other 56 percent Is consumed by government, both the s t a t e and the n a t i o n a l . As data on consumption l e v e l s f o r each government department and I t s end use are not a v a i l a b l e , i t i s d i f f i c u l t to determine whether e l e c t r i c i t y i s p l a y i n g a major r o l e i n Pohnpei's development e f f o r t s .

However, i t should be noted that uses f o r economic development are l i m i t e d to such consumers as an i c e p l a n t , the a i r p o r t , and the port area. S o c i a l s e r v i c e s — f o r example, the h o s p i t a l and s c h o o l s — a r e a l s o major consumers. Again, without complete data I t I s d i f f i c u l t to assess end use. One observation can be made however: government o f f i c e s have l i g h t s and a i r c o n d i t i o n e r s running when they are unoccupied (e.g., during n i g h t s

20


Table 3*1. E l e c t r i c i t y t a r i f f s i n the P a c i f i c : 1981-82 (US^/kwh)

I s l a n d n a t i o n Night r a t e Commercial/ or s t a t e ( F r . 12 to 6 A.M.) R e s i d e n t i a l I n d u s t r i a l

K i r i b a t i 28 28 Tonga - 19 - 22 19 - 22 Solomon I s l a n d s 19 25 28 Western Samoa - . 24 24 Vanuatu 12 24 16 - 40 Niue - 21 21 F i j i - 18 12 - 19 Cook I s l a n d s - 18 31 Pohnpei - H f o r 1 ,000 kwh/month;

8^ over 1,000 kwh/month

Source: P a c i f i c Energy Program: 1982b. Selected Data from Country Energy M i s s i o n Reports. East-West Center. Honolulu.

Table 3.2. Pohnpei power production—revenue data: 1980-81

Consumers Not kwh kwh Amount Amount

Date Metered met.a produced b i l l e d b i l l e d c o l l e c t e d

1980 Oct. 31 — 1,132,800 603,799 25,582.68 12,730.36 Nov. 30 - - 1,052,000 449,939 21,826.90 16,956.86 Dec. 31 - - 1,057,600 556,327 27,598.60 21,278.30

1981 Jan. 31 698 86 1,496,200 449,884 21,019.63 22,834.78 Feb. 27 711 82 946,000 b 438,232 21,767.30 19,634.67 Mar. 31 713 85 1,051,600 442,549 21,721.83 20,225.22 Apr. 30 667 100 697,000 b 353,987 16,824.51 15,298.39 May 31 669 102 964,400 417,495 13,139.78 18,001.63 Jun. 30 - - - - 13,671.60 —

Average 1,049,700 464,027 20,350.31 18,370.03

Source: OPS-FSM: 1981. Five-Year Energy P l a n . O f f i c e of Pl a n n i n g and S t a t i s t i c s , Federated States of M i c r o n e s i a , Pohnpei.

Notes: a. I n d i c a t e s customers who r e c e i v e estimated monthly consumption b i l l s owing to t h e i r not having meters.

b. Drop i n production caused by severe machinery f a i l u r e s .

21


and weekends)* Although I t i s not p o s s i b l e to q u a n t i f y t h i s s i t u a t i o n due to l a c k of energy a u d i t s ) , our data i n d i c a t e that some s m a l l unmetered government o f f i c e s (e.g., those f o r s i x to ei g h t people) consume 2,000 to 3,000 kwh per month, which can be compared to the approximately 4,000 kwh consumed per month by one of Pohnpei's b u s i e s t r e s t a u r a n t s . (See Table 3.3.)

Thus, unmetered government consumption must assume a major r e s p o n s i b i l i t y f o r current t o t a l consumption l e v e l s . Although some of t h i s consumption i s being used to f a c i l i t a t e Pohnpei's o v e r a l l development, there i s evidence of unnecessary or w a s t e f u l consumption. This does not i n c l u d e any assessment of the energy e f f i c i e n c i e s of government b u i l d i n g s and a p p l i a n c e s , which, i f i n e f f i c i e n t , a l s o r e s u l t i n unnecessary consumption.

Of the 44 percent of the metered consumers, approximately 90 percent of the amount b i l l e d i s c o l l e c t e d . Table 3.3 shows metered consumers by c l a s s i f i c a t i o n of end use and l e v e l s of consumption. The government accounts f o r at l e a s t 20 percent of metered consumption, and records could be incomplete f o r housing and r e n t a l s u n i t s . Of note i s that government employees i n government housing consume, on the average, n e a r l y three times as much e l e c t r i c i t y as p r i v a t e r e s i d e n t i a l consumers. Government housing o f t e n comes furnished w i t h a i r c o n d i t i o n e r s , hot-water heaters, and e l e c t r i c s t o v e s — a p p l i a n c e s that are not owned by the general p o p u l a t i o n (see chapter 4 ) .

The commercial and I n d u s t r i a l group consumes 50.1 percent of the t o t a l metered consumption. T h i s group includes r e s t a u r a n t s , h o t e l s , o f f i c e s , shops, and warehouses. There are no major i n d u s t r i a l users. R e s i d e n t i a l users (26.3 percent) are the next l a r g e s t consumer group. I f the " T o t a l " column (Table 3.3) i s taken i n t o c o n s i d e r a t i o n , the commerc i a l and i n d u s t r i a l group dominates consumption i n the high-consumption rows. However, a number of r e s i d e n t i a l consumers use r e l a t i v e l y l a r g e amounts of e l e c t r i c i t y . I f they were charged the f u l l cost of p r o d u c t i o n , t h e i r monthly b i l l s would w e l l exceed $100 and, In some cases, $200. As i t i s , they pay roughly one-fourth of these amounts.

The preceding data present a p i c t u r e , a l b e i t l i m i t e d , of current e l e c t r i c i t y consumption. In summary, the f o l l o w i n g statements can be made:

• The h e a v i l y s u b s i d i z e d t a r i f f rates play a major r o l e i n Pohnpei* s negative trade imbalance by encouraging consumption that i n some cases i s unnecessary and w a s t e f u l . Given the current wage and s a l a r y l e v e l s , i t i s d o u b t f u l that a r e s i d e n t i a l consumer would pay $100 to $200 per month f o r e l e c t r i c i t y i f charged the f u l l cost of production.

. Unmetered government consumption d i s a l l o w s a c c o u n t a b i l i t y f o r unnecessary and w a s t e f u l consumption.

22


Table 3.3. Number of e l e c t r i c i t y users by average kwh per month consumed and end-use c l a s s i f i c a t i o n (and 1 of to t a l production per c l a s s ) : November 1980 - March 1981

kwh/month by number and average kwh/month Commercial/ Church/ Public Government per user Resldentlal 1ndustrlal mlsslon sector* housing 0* c Total

0 - 100:N Avg kwh/month

40 67.1/

3 70.27

5 71

1 52.8

1 87

50 67.84 0.81


105 158.84

5 157.64

1 107.8

2 158.

I 185.8

114 158.56 4.2*


70 248.09

11 248.96

3 256.87

6 248.57

1 289.3

91 248.97 5.21

300 - 400;N Avg kwh/month

49 344.98

6 343.43

9 360.49

64 347.02 6.11

400 - S00:N Avg kwh/month

24 444.33

11 449.49

1 449

1 463.2

6 446.38

43 446.49 4.41


34 623.21

23 630.10

3 62.5

7 542.63

22 626.65

89 619.56 12.71

750 - 1,000:N Avg kwh/month

1,000 - 1.50O:N Avg kwh/month

U 872.13

10 1.145.6

13 871.11

22 d

1,309.88

1 801

1 1,040

3 872.2

1,242.47

15 902.92

10 1,140.76

43 858.53 8.51

46 1,227.14 13.01

1,500 - 2t000:U Avg kwh/month

2 1,585.3

6 1,751.35

3 1,689.13

10 1,689.05

21 1,694.12 8.21

Table 3.3 (cont.)

kwh/month by number and average kwh/month per user Resident!al

Commercial/ Industrial

Church/ mission

Public sector*

Government housing 0* 0 Total

2,000 - 3,000:N Avg kwh/month

2 2.206.8

14 2,402.4

- 2 2,173.4

2 2.301.85

20 2,349.89 10.81

3.000 - 4,000:N Avg kwh/month

- 8 3,515.7

1 3,213

1 3,009.6

1 3,088.2

11 3,403.31 8.61

4,000 - 5,000:N Avg kwh/month

- 3 4,545

- - - 3 4,545 3.11

5,000>:N Avg kwh/month

9 e

7,291.86 - - - 9

7,291.86 15.11

TOTAL:N Avg kwh/month

347 328.88 26.3%

134 1,618.7

50. U

19 719.94 3.2%

35 659.05 5.31

69 950.7 15. U

604 717.40

1001/99.71

Source: State Department of Resource Conservation and Surveillance: 1983.

Notes: Figures may not sum because of rounding.

a. Public sector Includes consumers l i s t e d with an "FSM' i n the records, presumably i n d i c a t i n g rentals of o f f i c e s by government and other o f f i c e s such as the Post O f f i c e .

b. Average kwh/month based on 5 months (November 1980 to March 1981); except for Government housing, which Is based on 4 months (December 1980 to A p r i l 1981, excluding February 1981).

c. "Government Housing 0.(Section VI In the records) has been used as c l a s s i f i e d In the records. I t i s l i k e l y that there are other end uses than simply housing, given the high consumption rates.

d. Includes 3 meters f o r one consumer (hotel operator), which have been combined.

e. Includes 4 meters for one consumer (hotel operator), which have been combined.

. Given the l a c k of data on government end uses of e l e c t r i c i t y , i t i s d i f f i c u l t to determine the exact r o l e that e l e c t r i c i t y i s p l a y i n g i n Pohnpei fs development. However, the a v a i l a b l e data and personal observations suggest that a planned and e f f i c i e n t use of e l e c t r i c i t y i s l a c k i n g i n the development of i n f r a s t r u c t u r e , s o c i a l s e r v i c e s , and economic resources. I t seems that government consumption i s allowed without d i r e c t i n g end use to p r i o r i t y development s e c t o r s .

. With e l e c t r i c i t y l i m i t e d to K o l o n i a and surrounding areas, only 10 to 15 percent of the s t a t e ' s t o t a l population uses a s e r v i c e ( e l e c t r i c i t y ) that consumes 21 percent of the s t a t e ' s annual operating budget. Thus opportunity costs are high because funds that could otherwise be used f o r o v e r a l l development are d i v e r t e d to produce e l e c t r i c i t y .

. I t may be concluded that the cost of producing e l e c t r i c i t y i s having a negative impact on o v e r a l l development.

Energy Development Goals

Pohnpei State i s p r e s e n t l y preparing I t s f i r s t development p l a n , which includes a d r a f t s t a t e energy p l a n w i t h the f o l l o w i n g primary o b j e c t i v e s (OPS-FSM: 1981):

. To e s t a b l i s h an energy plan that w i l l be i n l i n e w i t h the FSM's n a t i o n a l goals of economic advancement and p o l i t i c a l Independence

• To educate the people of Pohnpei i n the wise use and development of energy through r e a l i s t i c u t i l i t y rates

. To provide f o r the most r e l i a b l e and most e f f e c t i v e c e n t r a l e l e c t r i c i t y energy system by e s t a b l i s h i n g a p u b l i c l y owned and operated e l e c t r i c i t y commission

. To assess and develop Pohnpei's renewable energy resources according to the s t a t e ' s o v e r a l l economic development plan

None of the above o b j e c t i v e s s p e c i f i c a l l y addresses r u r a l e l e c t r i f i c a t i o n . However, the ex t e n t l o n of power l i n e s to r u r a l areas Is c u r r e n t l y a major p r o j e c t . The extension, 13.8 kva l i n e s , i s scheduled to t o t a l 50.7 km at a cost of $1.83 m i l l i o n ($36,095/km). Although o r i g i n a l l y scheduled f o r completion i n January 1982, j u s t over one-half of the extension ( t o the Uh study area) has been completed and energized; and continued extension i s "on hold" as the s t a t e ' s development budget has c o n s t r i c t e d .

Table 3.4 shows s p e c i f i c p r o j e c t s and programs f o r the plan period 1982-87. Again, there i s no s p e c i f i c r u r a l e l e c t r i f i c a t i o n component. However, s e v e r a l components r e f l e c t I n i t i a t i v e s f o r r u r a l communities

25


TABLE 3.4 Pohnpei energy development and resource assessment targeted goals: 1981-87

Goal 1981 1982 1983 1984 1985 1986 1987

1. Petroleum Imports ( m i l l i o n gallons) 3.1 3.3 3.4 3.4 3.3 3.4 3.5

2. Petroleum costs ( m i l l i o n $) 3.9 4.6 5.2 5.7 6.1 7.0 7.9

3. E l e c t r i c i t y production ( m i l l i o n kwh) 15 16.1 16.3 16.4 17 17.7 18.4

4. Production by diesel ( m i l . kwh) Production by hydroelectric ( m i l . kwh) Production by mlcrohydro ( m i l . kwh) Production by blomass (equlv. m i l . kwh) Production by wind (equlv. ml), kwh) Production by solar (equlv. m i l . kwh)

15 16

0.008 0.1 0.002 0,001

16

0.10 0.2 0.002 0.001

16

0.11 0.3 0.004 0.002

14 2.5 0.11 0.4 0.006 0.002

14.5 2.5 0.16 0.5 0.008 0.003

15.0 2.5 . 0.25 0.6 0.01 0.003

5. E l e c t r i c i t y production costs/kwh 18* 19rf 20* 2tf 18* 19* 20*

6. E l e c t r i c i t y rates/kwh

7. Coll e c t i o n s ( m i l l i o n s of $)

3*<1,000 6V>1,000 0.24

5rf<750 10*>75G 0.70

7*<500 12tf>500 1.16

9tf<300 14(f>300 1.62

1U<200 16*>200 2.08

13*<200 18*>2Q0 2.54

15*<200 2Q*>200 3.1

8. Total e l e c t r i c a l prod, costs ( m i l . $) 2.7 3.0 3.0 3.0 2.7 2.9 3.1

Energy resource assessment and development funding ($)

9. Hydro flow gauging stations $ 12k $ 8k $ 3k $ 3k $ 3k $ 3k $ 3k

10. Hydro project grants/loans 0 50k 50k 30k 30k 30k -11. Blomass assessment 0 45k 15k 15k 15k 15k -12. Coconut o i l engine tests 0 10k 10k - - - -13. Producer gas engine/system development 0 0 10k 10k - - -14. Detailed energy usage survey 0 15k 15k - - - -IS. Wind (anemometers) 0 20k 10k 10k 10k 10k -

16. Solar (pyranometers) 0 21k 2k 2k 2k 2k 2k

Totals 12K $194,000 $120,000 $70,000 $60,000 $60,000 -

Source: OPS-FSM: 1981. Five-Year Energy Plan.

Note: Large-scale hydroelectric development may need to be by loan or grant with Incorporated payment systems as In the operation of a private u t i l i t y .

i n c l u d i n g s o l a r p h o t o v o l t a i c systems f o r d i s p e n s a r i e s (increased s o l a r production) and microhydro schemes. I t would appear then that the g r i d extension w i l l continue to be the primary instrument f o r r u r a l e l e c t r i f i c a t i o n .

Given the data and a n a l y s i s on current e l e c t r i c i t y use and proposed energy development, s e v e r a l Issues emerge:

• Without a comprehensive r u r a l e l e c t r i f i c a t i o n p o l i c y , I t Is not c l e a r what the purpose of r u r a l e l e c t r i f i c a t i o n i s beyond the p r o v i s i o n of s e r v i c e .

. Although the p r o v i s i o n of s e r v i c e may j u s t i f y g r i d extension i n i t s e l f (other j u s t i f i c a t i o n might Include economic development and upgraded h e a l t h f a c i l i t i e s ) , the concern should be w i t h the end use of e l e c t r i c i t y and, as noted i n Table 3.3, w i t h the l e v e l s of consumption (given the current t a r i f f r a t e s ) .

• There i s no stated p o l i c y f a c i l i t a t i n g e l e c t r i c i t y use by a l l income groups (e.g., l i f e l i n e r a t e s ) ; hence, the current d i s t r i b u t i o n p o l i c y favors those who can a f f o r d the estimated s i n g l e payment of $25 f o r connection and house w i r i n g .

. As determined by t h i s study (see chapter 5 ) , d e c i s i o n makers are responding to the d e s i r e of the r u r a l population to have e l e c t r i c i t y ; y e t , r e s i d e n t s In the study areas have assigned higher p r i o r i t i e s to secure water, sewage, and upgraded roads as community development needs than they have to e l e c t r i c i t y .

. The targeted t a r i f f r a t e increases (see Table 3.4) through 1983 have not occurred and remain at 1981 l e v e l s , which suggests that the negative e f f e c t that the cost of producing e l e c t r i c i t y has on the balance of trade and on the s t a t e ' s budget w i l l continue i n r e a l terms.

. Although dependent on r e a l i s t i c t a r i f f s , a conservation program seems to be necessary. A primary o b j e c t i v e of an energy p l a n i s to educate people on the "wise use" of e l e c t r i c i t y . The plan has no component to implement t h i s o b j e c t i v e a side from increased t a r i f f s .

Thus the r o l e of e l e c t r i c i t y , and s p e c i f i c a l l y of r u r a l e l e c t r i f i c a t i o n , In Pohnpei's s o c i a l and economic development I s unclear. Although one could argue that p r o v i s i o n of e l e c t r i c i t y to r u r a l areas i s a j u s t i f i a b l e end i n i t s e l f , the a l l o c a t i o n of the budget from resource development, I n c l u d i n g human well - b e i n g and other p r i o r i t i e s (e.g., water) to s u b s i d i z e e l e c t r i c i t y a t very low t a r i f f s has to be questioned. Hence, the context i n which to assess r u r a l e l e c t r i f i c a t i o n Is l i m i t e d by l a c k of data and p o l i c y as p e r t a i n i n g to both o v e r a l l development and r u r a l e l e c t r i f i c a t i o n i n i t i a t i v e s .

27


On the b a s i s of t h i s i n f o r m a t i o n , the focus of t h i s study has been e s t a b l i s h b a s e l i n e data on

- the current users of e l e c t r i c i t y and the purposes f o r which i t i s used,

. a p r o f i l e of p o t e n t i a l consumers i n an area r e c e n t l y connected to the g r i d ,

• the a v a i l a b i l i t y and use of t o t a l resources by i n d i v i d u a l households, and

. the o v e r a l l development p r i o r i t i e s .

28


Chapter 4. SOCIOECONOMIC PROFILE OF STUDY HOUSEHOLDS

Chapters 4 and 5, on household energy, d i s c u s s the data c o l l e c t e d during f i e l d research on Pohnpei. This chapter emphasizes household e c o n o m i c s — f o r example, economic a c t i v i t y , the use of time, and income and expenditure, i n c l u d i n g subsistence production. This method of assessment places household e l e c t r i c i t y and o v e r a l l energy use i n the context of a household's u t i l i z a t i o n of a l l of I t s resources. Germane to the emphasis on household economics Is the point t h a t , I f and when e l e c t r i c i t y t a r i f f s are adjusted, there w i l l be some I n d i c a t i o n as to how households w i l l be a f f e c t e d by t a r i f f i n c r e a s e s .

However, i s o l a t i n g the impact of e l e c t r i c i t y from other Impacts or signs of change can be an almost Impossible task In some Instances. This i s the case on Pohnpei where, on a statewide b a s i s , i t i s p o s s i b l e to demonstrate such negative impacts as a trade imbalance caused In part by the Import of petroleum to f u e l the e l e c t r i c i t y generation system. On a r e g i o n a l basis or even at the l e v e l of a s p e c i f i c community, the task becomes more d i f f i c u l t and the conclusions more ambiguous l a r g e l y f o r the reason that e l e c t r i c i t y has not been used to Increase economic production or to upgrade other community s e r v i c e s such as water and s a n i t a t i o n . But schools and h e a l t h d i s p e n s a r i e s have or w i l l r e c e i v e e l e c t r i c i t y ( v i a g r i d extension or p h o t o v o l t a l c s ) , which should b e n e f i t the community at l a r g e .

Given the absence of a r e l a t i o n s h i p between e l e c t r i c i t y and economic production and the high consumption and undetermined end use by government, the i n d i v i d u a l household has been s e l e c t e d as the b a s i c u n i t f o r an assessment of e x i s t i n g consumption patterns and the o v e r a l l impact of e l e c t r i c i t y on s o c i a l and economic development* I t Is at the household l e v e l where a student s t u d i e s i n the evening, where the p r e s e r v a t i o n of food i s f a c i l i t a t e d and thus household expenditures a m e l i o r a t e d , and where waste Is more obvious.

Having acknowledged t h i s s i t u a t i o n , one can make s e v e r a l key assumptions about the use and consumption of e l e c t r i c i t y by households that have s i g n i f i c a n t p o l i c y I m p l i c a t i o n s . These in c l u d e the f o l l o w i n g :

• That when s e r v i c e s , such as e l e c t r i c i t y , are made a v a i l a b l e , they w i l l be consumed.

. That consumption p o s s i b l y w i l l increase over time but most c e r t a i n l y w i t h a r i s e i n income i f p o l i c i e s are not I n s t i t u t e d to conserve e l e c t r i c i t y through measures such as i n c r e a s i n g block t a r i f f rates and d i f f e r e n t i a l import d u t i e s f o r appliances on the b a s i s of energy e f f i c i e n c y .

. That the uses of e l e c t r i c i t y p o s s i b l y w i l l broaden over time but again most c e r t a i n l y w i t h an increase i n income.


• That "waste" can Increase w i t h income.

Another issue i s that e l e c t r i c i t y i s an introduced technology on Pohnpei; and although i t s use and consumption may be determined by income, i t i s the income earners themselves who determine the a p p l i c a t i o n of the technology. The western-educated c i v i l servant i n d a i l y contact w i t h photocopy machines, a i r c o n d i t i o n i n g , and e l e c t r i c t y p e w r i t e r s w i l l have a d i f f e r e n t perception of e l e c t r i c i t y and i t s uses than w i l l a subsistence farmer who i s more f a m i l i a r with kerosene lamps and battery-powered r a d i o s . Thus i t i s exposure that f a c i l i t a t e s a p p l i c a t i o n and waste.

The two areas included i n the study are as d i f f e r e n t as the c i v i l servant and the subsistence farmer. Sokehs I s l a n d i s adjacent to the c a p i t a l , K o l o n i a , and I s populated by a mixture of c i v i l s e r v a n t s , p r i v a t e -s e c t o r employees, and subsistence farmers. The population g e n e r a l l y c o n s i s t s of o u t e r - i s l a n d immigrants who do not have s u f f i c i e n t land to supply the markets of nearby K o l o n i a . Therefore, an education to secure p u b l i c - s e c t o r employment Is h i g h l y valued.

Uh, a m u n i c i p a l i t y roughly 12 km from the c a p i t a l , on the other hand, i s Pohnpeian and r u r a l , where subsistence a g r i c u l t u r e and f i s h i n g predominate. The road connecting Uh w i t h the c a p i t a l i s used h e a v i l y and the flow of goods, s e r v i c e s , and ideas appears to be i n c r e a s i n g . I t i s an area that has o n l y r e c e n t l y r e c e i v e d e l e c t r i c i t y ( J u l y to August 1983, s e v e r a l weeks p r i o r to the s t u d y ) , whereas Sokehs has had e l e c t r i c i t y f o r approximately four to f i v e years. Thus the two areas are In the vanguard of change on Pohnpei. Perlurban Sokehs i s already c l o s e l y connected to the c a p i t a l , which serves as the entry point f o r ideas and i n n o v a t i o n s . R u r a l Uh, j u s t beginning to e s t a b l i s h s i m i l a r l i n k s , I s experiencing "change" probably as r a p i d l y as any r u r a l area.

Before the r e s u l t s of the study are discussed, reference must be made to two e x c e l l e n t household energy surveys from the P a c i f i c i s l a n d n a t i o n of F i j i . S. Slwatibau (1978) and C.R. L l o y d e t a l . (1982) have focused on energy use and consumption; Slwatibau a l s o considered forms of a l t e r n a t i v e energy. Although the authors d i s c u s s household Income and expenditure, they both emphasize the importance of the household energy s e c t o r . T h i s study d i f f e r s from t h e i r s because i t presents energy and e l e c t r i c i t y use as a v a r i a b l e dependent on income and expenditure patterns and l i f e - s t y l e s .

P o p u l a t i o n

Table 4.1 shows the population of the 52 households (26 i n Uh, 26 on Sokehs) In the study. With respect to the average number of persons per household, Sokehs has 6.54 persons per household; and Uh has 7.15 persons per household. These f i g u r e s are s u b s t a n t i a l l y l e s s than the 1980 Census f i g u r e s that showed Sokehs w i t h 7.68 persons per household and Uh w i t h

30


Table 4.1. Enumerated population by area, sex, and five-year-age groups

Age group

Uh Sokehs T o t a l

Age group M F T M F T M F T

0-4 14 11 25 8 12 20 22 23 45 5-9 12 10 22 7 16 23 19 26 45 10-14 11 9 20 9 10 19 20 19 39 15-19 8 10 18 9 11 20 17 21 38 20-24 9 9 18 7 9 16 16 18 34 25-29 9 5 14 10 9 19 19 14 33 30-34 8 8 16 7 5 12 15 13 28 35-39 10 10 20 2 2 4 12 12 24 40-44 2 2 4 1 3 4 3 5 8 45-49 2 2 4 5 6 11 7 8 15 50-54 3 2 5 1 5 6 4 7 11 55-59 2 0 2 4 3 7 6 3 9 60-64 1 5 6 3 2 5 4 7 11 65+ 5 7 12 3 1 4 8 8 16

T o t a l 96 90 186 76 94 170 172 184 356

Notes: M = Male; F =» Female; T = T o t a l .

9.67 persons per household.* To some extent, the d i f f e r e n c e s might be explained i n Table 4.2, which shows population t o t a l s by major age bands and percent. The study areas 1 have a lower d i s t r i b u t i o n i n the 0- to 14-year-age group than the Pohnpei t o t a l . I f the Pohnpei f i g u r e s are accur a t e , t h i s would suggest that there might have been some underrecording or that some c h i l d r e n were s t a y i n g w i t h r e l a t i v e s . Another p o s s i b i l i t y i s that the study i s accurate. S i m i l a r l y , the dependency r a t i o s * * f o r Pohnpei S t a t e , Uh, Sokehs, and t o t a l sample are 1.92, 1.74, 1.63, and 1.69, r e s p e c t i v e l y . I n other words, fewer c h i l d r e n were recorded i n the study area than at the st a t e l e v e l .

*The survey questionnaire defines household members as those people who eat and sleep i n the household, whereas the census uses " l i v i n g i n the household."

**Dependency R a t i o C h i l d r e n (0-14) + Aged (65+) = : + 1

Adults (15-64)

31


Table 4.2. Po p u l a t i o n d i s t r i b u t i o n by major age groups {%)

Study areas

Pohnpei Age group Uh Sokehs T o t a l t o t a l

0-14 36.0 36.5 36.2 43.9 15-64 57.5 61.2 59.3 52.2 65+ 6.5 2.4 4.5 3.9

T o t a l 100.0 100.1 100.0 100.0

Source: OPS-FSM: 1982. 1981 N a t i o n a l Yearbook of S t a t i s t i c s , O f f i c e of Planning and S t a t i s t i c s . Federated States of M i c r o n e s i a . Pohnpei.

Note: Figures may not sum because of rounding.

With respect to male:female r a t i o s , the s t a t e f i g u r e i s 1.05 males per female, while f o r Uh the f i g u r e i s 1.07; Sokehs, 0.81; and t o t a l samp l e , 0.93. The Sokehs f i g u r e i s s u r p r i s i n g because a higher male:female r a t i o might have been a n t i c i p a t e d on the b a s i s of s i n g l e men s t a y i n g w i t h r e l a t i v e s w h i l e l o o k i n g f o r wage employment i n K o l o n i a . I t should be noted, however, that s e v e r a l l a r g e households (10 or more persons) had d i s p r o p o r t i o n a t e male:female r a t i o s , w i t h females outnumbering males by r a t i o s ranging from 3: to 5:1. In these Instances, the females were e i t h e r young a d u l t s (15 to 29 years of age) or over 60 years of age, i n households w i t h at l e a s t one wage earner. Although these households were few In number (4 out of 26 households w i t h the number of persons per household exceeding 10; the l a r g e s t having 19 persons, of whom 4 were males), I t might i n d i c a t e that females who are not earning wages or seeking jobs are more r e a d i l y accepted Into households than t h e i r male counterparts. The study s i z e i s c l e a r l y i n s u f f i c i e n t to deduce any f i r m c o n c l u s i o n s ; yet I t can be speculated that there could be a th r e s h o l d f o r the number of non-wage-earning males In the r e l a t i v e l y l a n d l e s s households In Sokehs.

Uh m u n i c i p a l i t y had 0.25 percent AAGR between the 1973 Census and the 1980 Census, w h i l e the census enumeration d i s t r i c t used i n t h i s study had an 8.51 percent AAGR. Sokehs m u n i c i p a l i t y had a 1.61 percent AAGR during the i n t e r c e n s a l period as d i d the Sokehs enumeration d i s t r i c t used i n t h i s study. Pohnpei State had a 2.55 percent AAGR between 1973 and 1980. C l e a r l y the 1980 Census f i g u r e s f o r the Uh census enumeration d i s t r i c t (CED 19) used i n the study are much higher than would be expected

32


f o r a r u r a l area. Some questions have already been r a i s e d concerning the 1980 Census, and the 1973 Census was conducted because many people considered the 1970 Census to be i n a c c u r a t e .

M i g r a t i o n has played a prominent r o l e on Sokehs I s l a n d . Although f i g u r e s f o r the i s l a n d are u n a v a i l a b l e , the 1973 Census i n d i c a t e s that roughly one out of every three r e s i d e n t s of Sokehs m u n i c i p a l i t y was born elsewhere. Only K o l o n i a has a higher r a t i o (1:1.4) i n the s t a t e . Given the p r o x i m i t y of Sokehs to K o l o n i a and the presence of communities of former r e s i d e n t s of Mortlock and Pingelap ( o u t l y i n g i s l a n d s ) , i t could be assumed that the r a t i o f o r Sokehs I s l a n d i s higher than that f o r Sokehs m u n i c i p a l i t y . Reasons f o r m i g r a t i o n to Pohnpei proper from the o u t l y i n g i s l a n d s include

• v u l n e r a b i l i t y to n a t u r a l hazards, e s p e c i a l l y typhoons and drought

. h i g h post-World War I I population growth rat e s on the outer Islands and a t o l l s that r e s u l t e d In problems meeting b a s i c needs (hence, emigration)

• presence of education and h e a l t h f a c i l i t i e s i n K o l o n i a

. d e s i r e f o r consumer goods

. formal wage employment, p a r t i c u l a r l y f o r young a d u l t s ( C o n n e l l : 1983).

With respect to Uh, Connell (1983) s t a t e s that "there has been very l i t t l e I n t e r n a l m i g r a t i o n " on Pohnpei as "many commute to work and those who are f a r t h e r away r e t u r n to t h e i r home communities at weekends." Hence, the road between Uh and K o l o n i a provides those In formal employment (e.g., In the p u b l i c sector) w i t h the opportunity to earn wages and s a l a r i e s In the c a p i t a l while r e s i d i n g and p a r t i c i p a t i n g i n t h e i r community.

Economic A c t i v i t y , Education, and the Use of Time

Table 4.3 shows a breakdown of the t o t a l study p o p u l a t i o n by main occupation, sex, and area. As the t a b l e I n d i c a t e s , more females are working In the "Domestic d u t i e s " category (see Table 4.5 f o r a d e f i n i t i o n ) than there are households. This i s a l s o true of male subsistence farmers In the Uh sample but not i n the Sokehs sample, where wage employment i s l a r g e r and, I t could be argued, more Important to the w e l l - b e i n g of the members of a household.

An i n t e r e s t i n g aspect i s the "Student" category. Although Sokehs has a s m a l l e r p o p u l a t i o n , i t has more students than Uh. I f a rough estimate of students per population aged 5 to 19 i s assumed, 84 percent of the Sokehs study population In t h i s age group are students, w h i l e only 75 percent are students i n Uh. This rough estimate does not include students

33


Table 4.3. Main occupation by study area and sex

Domestic Subsistence Area/Sex duties agriculture

Wage earners

Sales/ c l e r i c a l Professional Technical Laborer Student

Preschool Unable c h i l d to work Retired Total

Uh

Male

Female

Total

46

46

35

35

7

3

LO

25

20

45

14

11

25

4

7

11

96

90

186

W h3 &> p> CD O rt • * I Hi

« K-fl) O CD rt M

01 O h-n> ID 3 3 rt a, (D CD

a < l-» O

§ E3

1 O

00 M

Sokehs

Male

Female

Total

Total

Male

Female

Total

47

47

93

93

16

16

51

51

Note: N a 52 households.

11

1

12

18

4

22

9

1

10

25

27

52

50

47

97

9

14

23

23

25

48

5

1

6

9

8

17

76

94

170

172

184

356

attending the community c o l l e g e and over 20 years of age, of whom there are four i n Sokehs and only one i n Uh, nor does i t include two Sokehs students attending high school on Guam. As mentioned above, the r e l a t i v e l y l a n d l e s s immigrants to Sokehs appear to have placed a higher value on education than those i n other areas of the s t a t e . As noted, the presence of e d u c a t i o n a l f a c i l i t i e s i n K o l o n i a Is one of the reasons f o r m i g r a t i o n ( C o n n e l l : 1983).

The emphasis on education i n Sokehs i s a l s o demonstrated by the numbers In the " P r o f e s s i o n a l " category i n Table 4.3 and by Table 4.4. As Table 4.4 shows, approximately 65 percent of those In the study areas having at l e a s t a high school diploma are i n the Sokehs sample. For compar a t i v e purposes, the 1973 Census provides the most recent data. The census data i n d i c a t e that of the Pohnpei State population aged 15 and over, 3.66 percent had attended c o l l e g e ( f o r an u n s p e c i f i e d l e ngth of t i m e ) , compared to 7.93 percent i n the study (9.26 percent i n Sokehs; 6.72 percent i n Uh).

According to Table 4.3, sex a l s o plays a major r o l e i n the occupat i o n a l s t r u c t u r e . Although the number of female students n e a r l y equals male students (and exceeds males i n the Sokehs sample), female wage earners are few. Rather, most women, i n c l u d i n g some who have received high school diplomas, work i n the home. The three female p r o f e s s i o n a l s i n Uh are teachers, and only one i n Sokehs i s i n a managerial (middle-l e v e l ) p o s i t i o n .

Table 4.5 describes the use of time. The d i f f e r e n c e s between the areas are few, other than that i n Uh more time Is spent on non-cash income-generating a c t i v i t i e s (e.g., "Subsistence a g r i c u l t u r e " and "Other work").

L e i s u r e presents another co n t r a s t s i n c e i t i s a l l o t t e d more time on Sokehs. L e i s u r e i s a d i f f i c u l t term because i t r e f l e c t s both respondents 1

and enumerators' perceptions; i t a l s o has c u l t u r a l d e f i n i t i o n s . L e i s u r e i n c l u d e s sakau (kava) d r i n k i n g (by men) i n the evening, which can i n v o l v e d i s c u s s i o n s on community matters and the passing on of t r a d i t i o n s . I t thus could be considered an economic a c t i v i t y when community a f f a i r s and development are discussed, an e d u c a t i o n a l a c t i v i t y when o r a l t r a d i t i o n s are the t o p i c , or simply a time to r e l a x (which a l s o has an economic funct i o n ) . I n the case of Uh, current major t o p i c s during the sakau sessions are the proposed Compact of Free A s s o c i a t i o n w i t h the United S t a t e s , r e l a t i o n s between Pohnpei and the FSM, and s t a t e and l o c a l p o l i t i c s . This form of l e i s u r e i s s i g n i f i c a n t l y d i f f e r e n t from that of the f i v e households on Sokehs w i t h t e l e v i s i o n s , where t e l e v i s i o n i s watched every evening by n e a r l y a l l f a m i l y members. ( T e l e v i s i o n - v i e w i n g hours range from two to four hours; however, i n s e v e r a l of these households, the t e l e v i s i o n I s on f o r up to ei g h t hours per day). I t must a l s o be noted that although c h i l d r e a r i n g i s included under domestic d u t i e s , i t i s a l s o performed during l e i s u r e hours by women. Women a l s o perform other "Domestic d u t i e s " and "Other work," such as weaving and sewing, during s o - c a l l e d l e i s u r e p e riods.

35


Table 4.4. Study population by e d u c a t i o n a l l e v e l s

Highest l e v e l of education completed

Uh Sokehs T o t a l Highest l e v e l of education completed M F T M F T M F T

High school diploma 3 1 4 8 4 12 11 5 16 Some c o l l e g e 2 2 4 2 2 4 4 4 8 Two-year c o l l e g e - 1 1 1 1 2 1 2 3 Bachelor's 2 - 2 1 - 1 2 - 2 + some graduate 1 - 1 1 - 1 2 - 2

Master's 1 1 1 1

Notes: M « Male; F = Female; T = T o t a l .

N s 52 households.

Estimates of the time spent c o l l e c t i n g firewood vary from two or two and one-half hours per week i n a small household (fo u r or fewer persons) to four hours every two to three days i n large households (more than ten persons). Women are the most frequent f u e l - g a t h e r e r s , almost e x c l u s i v e l y i n Uh (two exceptions) and s l i g h t l y l e s s so on Sokehs ( s i x e x c e p t i o n s ) . I f f i g u r e s are used from the Ag Census of 1978-79, 248 kg of firewood per c a p i t a per year (valued at $0.03/kg), the average household c o l l e c t s roughly 8 to 10 kg of firewood per hour spent on t h i s a c t i v i t y , or 30 to 35 kg per week.

Although some mention has been made of the time spent watching TV as contrasted w i t h the more communal sakau d r i n k i n g , f u r t h e r comment i s necessary on s o c i a l changes on Pohnpei. As the t a b l e s on "Main Occupation" and "The Use of Time" I n d i c a t e by omission, there i s no unemployment. I n predominately subsistence or semlsubsistence s o c i e t i e s , I t would be q u i t e d i f f i c u l t to a r r i v e at a c l e a r d e f i n i t i o n of unemployment because everyone works In one c a p a c i t y or another. However, there are people who could be termed "underemployed." "Underemployment" can take many forms, I n c l u d i n g time spent on c e r t a i n community a c t i v i t i e s , as w e l l as on l e s s s o c i a l l y p r o d u c t i v e a c t i v i t i e s . More young people are spending, f o r example, more time p l a y i n g p o o l ; and e l e c t r i c i t y and Increased cash have enabled the spread of t h i s a c t i v i t y to Uh. This i s not to p i n p o i n t e l e c t r i c i t y or money as the d i r e c t cause; rather i t i l l u s t r a t e s that a number of people "hangout." Although t h i s i s not meant as a d i r e c t c r i t i c i s m , what Is important i s that people's l i f e - s t y l e s and use of time are changing q u a l i t a t i v e l y and q u a n t i t a t i v e l y . For example, many forms of t r a d i t i o n a l a r t i s t r y appear to have a l l but disappeared. The s i g n i f i c a n c e of such trends to the future of Pohnpei remains unclear.

36


Table 4.5. Use of time: economically active population by study area, main occupation, and average hours per day per a c t i v i t y

Hales Females Area and ma1n\Act1v1-occupation\ ty

School Subsistence Cash Other study Wages a g r i c u l t u r e a crop work 0 Lei sure

School Subsistence Domestic Other study Wages a g r i c u l t u r e 3 duties Work0 Leisure

CD O rt H* I rti (b O CD rt M

CD d H* ft) (D 0 a

CD

o A) < o •o 0 n> S3 rt O

n

Sokehs Students Wage earners Professional Self-employed (shop-owner)

Subsistence ag r i c u l t u r e

Domestic duties

Uh Students Wage earners Professional Self-employed (shop-owner)

Subsistence agriculture

Domestic duties

8 8

1 8

12

8

0.5 8 8

12

0.5 0.5 0.2

2.5

1 1 0.5

0.5 1

1 1 0.5

5 4 4

2-3

5

8 8

0.5 8

2.5

2.5 2 2

3 2.5 1.5

0.5 3 4 4.5

Notes: N a 40 households.

a. "Subsistence a g r i c u l t u r e " Includes f i s h i n g and c o l l e c t i n g firewood.

b. "Other work" for males Includes house construction and r e p a i r , boat building and repair, and other maintenance

a c t i v i t i e s .

c. "Domestic duties" Include washing clothes, cooking, cleaning of house and compound, and c h i l d rearing.

d. "Other work" f o r females Includes sewing, making handicrafts, and other a c t i v i t i e s .

Income and Expenditure

Table 4.6 shows weekly household income and expenditure f o r the 40 households In the study f o r which data were c o l l e c t e d . As the f i r s t column i n d i c a t e s , there are s i g n i f i c a n t ranges i n income and expenditure among the households. D i f f e r e n c e s between the mean and median columns, e s p e c i a l l y f o r the rows "Tot a l recorded cash expenditure," "Unaccounted cash expenditure," " T o t a l cash expenditure," and most of those under the "Income category," can be explained as being l a r g e l y an e f f e c t of these ranges. Other d i f f e r e n c e s r e f l e c t e d by the ranges are the number of zero observations (e.g., " E l e c t r i c i t y " ) . Some of these data, e s p e c i a l l y " T r a n s p o r t a t i o n " and "Alcohol and tobacco," should be read c a u t i o u s l y because they may a l s o r e f l e c t underreporting. " A l c o h o l and tobacco," gambling, and entertainment (both of the l a t t e r i n c luded under " M i s c e l l a neous" category) can be underreported f o r a v a r i e t y of reasons, i n c l u d i n g the p o s s i b i l i t y that someone might not want to acknowledge how much was spent on these items.

As the t a b l e I n d i c a t e s , e l e c t r i c i t y plays a minor r o l e In expendit u r e . The reasons are that (1) 55 percent of the households do not have e l e c t r i c i t y , (2) e l e c t r i c i t y t a r i f f r a t e s are low, (3) i r r e g u l a r i t y e x i s t s i n reading meters, and (4) not a l l households w i t h e l e c t r i c i t y have the money necessary to purchase e l e c t r i c a l appliances and t o o l s .

Table 4.7 has been i n c l u d e d as a comparison w i t h data from other P a c i f i c i s l a n d n a t i o n s . Again, i t must be s t r e s s e d that no acceptable data have been i d e n t i f i e d from other Micronesian s t a t e s ( e x c l u d i n g the more developed Guam). As the t a b l e shows, there are a number of s i m i l a r i t i e s , i n c l u d i n g expenditures f o r " A l c o h o l and tobacco," "Heating and l i g h t i n g , " "Food," and " P r o t e i n . " A l s o , "Housing" I s roughly between F i j i ' s and American Samoa's CPIs (Consumer P r i c e I n d i c e s ) and F i j i ' s HIES (Household Income and Expenditure Survey). The " T r a n s p o r t a t i o n " category i s c o n s i d e r a b l y lower than the other data, suggesting that underreporting may have been a problem.

The "Heating and l i g h t i n g " category i n c l u d e s expenditures f o r e l e c t r i c i t y , kerosene, and other purchased sources of energy. I t i s i n t e r e s t i n g that both i n F i j i , where the t a r i f f r a t e s are h i g h e r , and i n urban American Samoa, which i s the b a s i s of the CPI, the percentage spent on e l e c t r i c i t y i s l e s s than (although s i m i l a r to) the Pohnpei sample. T h i s can be p a r t i a l l y explained by "economies of s c a l e " because the " T o t a l " category Is higher i n both F i j i and American Samoa.

So that the study data could be more thoroughly analyzed, the 40 households have been disaggregated i n t o f i v e income groups: Upper, Upper-Middle, Middle, Lower-Middle, and Lower. The d i s a g g r e g a t i o n has been based on weekly household cash income as shown i n F i g u r e 4.1. The Lower-Middle income group has been i s o l a t e d on the b a s i s of cash expend i t u r e p a t t e r n s , i n c l u d i n g "Unaccounted expenditure," which although s m a l l i n magnitude, s t i l l show p o s i t i v e f i g u r e s . Whereas In the Lower

38


Table 4.6. Weekly household Income and expenditure f o r the t o t a l sample

Category Range Mean Median Note

Expenditure category

T o t a l food 2.76 - 54.09 25.74 26.86 L o c a l p r o t e i n 0 - 16.49 3.27 2.91 16 zero obs. T o t a l p r o t e i n 0.95 - 36.57 11.87 10.60 L o c a l other food 0 - 11.65 2.54 2.00 10 zero obs. T o t a l other food 1.32 - 27.90 13.93 13.55

A l c o h o l and tobacco 0 - 24.36 2.79 1.69 18 zero obs. T o t a l commercial energy 0.75 - 16.16 2.75 2.35 1 HH i n c l u d e s

a s m a l l s t o r e E l e c t r i c i t y 0 - 3.25 0.78 0 22 zero obs.

Water 0 - 0.75 0.41 0.75 18 zero obs. T r a n s p o r t a t i o n 0 - 10.00 2.93 1.93 11 zero obs. B u i l d i n g 1.92 - 12.82 4.48 3.85 Health and education 0 - 20.75 2.90 1.23 16 zero obs. Consumer durables 0.63 - 26.11 4.92 2.36 Miscellaneous 0 - 12.25 2.88 2,35 1 zero ob. Income taxes 0 - 15.38 4.79 3.68 10 zero obs. T o t a l recorded cash expenditure 12.78 - 201.77 54.59 50.98

Unaccounted cash expenditure ( -19.58) i -•150.91 31.61 15.86 11 negatives

T o t a l cash expenditure 8.00 — 250.00 86.20 61.25

Income category

T o t a l cash income 8.00 - 250.00 86.04 61.25 T o t a l net subsistence production 0.16 - 46.29 19.81 20.93

P r o t e i n 0 - 33.06 6.18 0 22 zero obs. Firewood 0.16 - 1.55 1.00 1.21

Value of s e r v i c e s flows from consumer durables 0.63 - 26.11 4.92 2.36

Imputed rent flows from b u i l d i n g 1.92 - 12.82 4.48 3.85

T o t a l Income 27.75 — 310.40 115.25 85.89

Notes: N a 40: 26 perlurban; 14 r u r a l .

F i g u r e s may not sum because of rounding.

39


Table 4.7. Comparison,of Pohnpei weekly household expenditure patterns with other P a c i f i c island surveys and indices (CPI weights and'percentage weekly expenditure for various categories)

1977 F i j i Household Income and Expenditure Survey

o

fi> tu CO O rt H-s: H. (T> O CO rt M

CO o H* tb Ui 3 2 rt ft. ro co n o

fl> < fD H* O

r| O

00

B

ExpendItureV 1 terns/ \Surveys sections/ \ and categories \ indices

Total Pohnpei sample

F1J1 CPI weights

1979

American Samoa CPI weights

1982

Central d i v i s i o n

subsistence v i l l a g e

Central d i v i s i o n

cash v i l l a g e

Suva-urban F1j1an:1owest

20%

Suva-urban F1j1an:m1ddle

20%

Total national sample

Food 47.07 33.8 46.1 51 33 48 34 31 Protein 21.70 .a 21.7 20 14 20 14 11

Alcohol and tobacco 5.1 5.4 5.8 9 6 4 7 6

Heating and l i g h t i n g 5.0 3.3 4.9 4 b 1° 2 b 3b 3 b

Housing 6.2 15.0 15.0 2 3 2 3 6

Transportation 5.4 13.9 13.2 14 23 12 12 13

Consumer durables 9.0 6.0 .c _c _c _c _c _c

A l l others 20.1 22.6 15.0 20 34 32 41 41 Health education 5.3 .a .a 4 5 3 3 5

Total 99.8 100 100 100 100 100 100 100

Sources: American Samoa CPI figures from OPS-FSM: 1983; F i j i CPI: October 1982; 1977 F i j i Household Income and Expenditure Survey (HIES) taken from Rlzer et a l . : 1982, The Potential Impacts of a Namosl Copper Mine: A Case Study of Assimilation Planning, which c i t e d F i j i ' s Central Planning Office and Bureau of S t a t i s t i c s ' SAM printouts.

Notes: Figures may not sum because of rounding.

Total sample size of 1977 FIJI HIES Is 2,554 households.

a. Not given.

b. Includes a l l u t i l i t i e s (e.g., water).

c. Included In " A l l others" category.

LU

LU a. ui S o a 0) < u a -j o z UI CO

240

220

200

180

160

140

120

100

80

60

40

20

UffiAN

mm.

UPPER INCOME GRpUP N = 8

UPPER MIDDLE. INCOME GROUP

MIDDUg fhCQME GROUP N= 7

LOWCn M(fiDL€ INCOME GROUP 11=9

LOWER INCOME GROUP N = 9

INDIVIDUAL LOWER—HOUSEHOLDS-UPPER

Figure 4.1. Distribution of income levels by households.

41


income group there i s a negative cash flow or negative cash expenditures (see Tables 4.13 and 4.14). The negative cash flow i s presumably o f f s e t by remittances from wage earners i n higher income groups.

Tables 4.8 and 4.9 show mean weekly household income and expenditure by amount (Table 4.8) and percentage (Table 4.9). Of immediate I n t e r e s t i s the r o l e of " T o t a l net subsistence production" f o r the v a r i o u s income groups. For the Upper income group, i t s c o n t r i b u t i o n to " T o t a l income" i s marginal (4.17 p e r c e n t ) . This Increases s l i g h t l y f o r the Upper-Middle (15.59 p e r c e n t ) , Middle (22.52 pe r c e n t ) , and Lower-Middle (26.44 p e r c e n t ) , u n t i l f i n a l l y i t makes a dramatic jump f o r the Lower group (50.53 perc e n t ) . Thus, although subsistence production may e q u a l i z e to an extent the q u a n t i t y of the t o t a l food consumed between income groups, i t does not enable the expenditure options that those w i t h higher cash incomes have and can e x e r c i s e . This Is e s p e c i a l l y true f o r the Upper income group. Again, however, t h i s statement must be q u a l i f i e d on the b a s i s of the negative cash flows f o r the "Unaccounted expenditure" category of the Lower income group, which could I n d i c a t e that one expenditure o p t i o n e x e r c i s e d by higher income l e v e l s i s the remittance of cash income to the lower income groups (thus, r e s u l t i n g In a net balance or more p o s i t i v e cash f l o w ) . This t r a n s f e r i n f a c t may be somewhat d i f f e r e n t from what i s n u m e r i c a l l y s t a t e d , but I t does occur, as do other t r a n s f e r s of goods and s e r v i c e s that are more problematic to i d e n t i f y and q u a n t i f y . Even w i t h recorded and major unrecorded t r a n s f e r s , a l l things are not equal, and there are i n e q u i t i e s i n the d i s t r i b u t i o n of goods and s e r v i c e s and i n the access to them.

A s i g n i f i c a n t aspect inadequately defined by the t a b l e s Is the r o l e of l o c a l p roduction. I n an e a r l i e r s e c t i o n , reference was made to the f a c t that people i n r u r a l areas were the main producers and consumers of l o c a l goods. Although t h i s has been noted to an extent i n the d i s c u s s i o n on subsistence production, i t d i d not deal w i t h cash expenditure items such as " T o t a l food expenditure." In t h i s category, 26.2 percent of the Upper Income group's purchases are of l o c a l products. T h i s d e c l i n e s from 24.5 percent f o r the Upper-Middle, to 21.1 percent, f o r the M i d d l e , to 19.3 percent f o r the Lower-Middle, to 12.8 percent f o r the Lower income group. However, the amounts are r e l a t i v e : the Upper group may consume l o c a l products at a rate more than double that of the Lower group on a percentage b a s i s , but i t a l s o consumes more than two and one-half times more imported food than the Lower group i n d o l l a r terms. I f " T o t a l recorded cash expenditure" ( i n c l u d i n g taxes) i s considered, the Upper group Imports i n d o l l a r terms three and one-half times more than the Lower group. C l e a r l y , those who produce to b o l s t e r t h e i r t o t a l income, i n c l u d i n g s u b s i s t e n c e , Import l e s s . This f a c t o r Is s i g n i f i c a n t f o r Pohnpei, where Imports exceed domestic exports by a f a c t o r approximating 20.

In both Tables 4.8 and 4.9, e l e c t r i c i t y has a minor r o l e . What can be determined i s t h a t , as expected, expenditure on e l e c t r i c i t y and t o t a l commercial energy increases w i t h income. This Is a f u n c t i o n of the higher

42


Table 4.8. Mean weekly household Income and expenditure by income group and amount

Upper- Lower-Category Upper Middle Middle Middle Lower T o t a l

Group category

T o t a l food 37.78 28.05 29.84 23.25 12.55 25.74 L o c a l p r o t e i n 6.15 3.82 3.62 2.72 0.54 3.27 T o t a l p r o t e i n 19.06 10.59 14.79 10.01 6.47 11.87 L o c a l other food 3.75 3.05 2.68 1.77 1.07 2.54 T o t a l other food 18.72 17.46 14.98 13.24 6.08 13.93

A l c o h o l and tobacco 4.54 0.61 4.12 1.88 2.80 2.79 T o t a l commercial energy 4.23 2.84 3.02 2.28 1.62 2,75

E l e c t r i c i t y 1.71 1.07 0.92 0.36 0.06 0.78 Water 0.47 0.54 0.32 0.58 0.17 0.41 T r a n s p o r t a t i o n 6.19 1.84 4.07 1.72 1.22 2.93 B u i l d i n g 5.99 5.36 4.04 4.17 3.09 4.48 Health and education 4.60 4.79 3.39 2.00 0.44 2.90 Consumer durables 14.51 4.16 2.05 1.73 2.42 4.92 Miscellaneous 5.31 2.15 3.33 2.20 1.60 2.88 Income taxes 12.10 6.51 3.96 2.16 0.25 4.79 T o t a l recorded cash expenditure 95.72 56.85 58.14 41.97 26.16 54.59

Unaccounted expenditure 93.98 51.58 11.36 3.98 (-5.33) 31.61 T o t a l cash expenditure 199.38 108.43 69.50 45.94 20.83 86.20

Income category

T o t a l cash Income 199.38 108.43 69.50 45.94 20.83 86.20 T o t a l net subsistence production 9.56 21.78 21.97 18.63 26.90 19.81

P r o t e i n 2.96 5.81 8.23 1.56 ,12.34 6.18 Firewood 1.02 1.07 1.26 1.24 1.40 1.00

Value of s e r v i c e s flows from consumer durables 14.51 4.16 2.05 1.73 2.42 4.92

Imputed rent flows from b u i l d i n g 5.99 5.36 4.04 4.17 3.09 4.48

T o t a l Income 229 .48 139.73 97.56 70.47 53.24 115.41

Number of households 8 7 7 9 9 40 Perlurban 5 6 4 8 3 26 R u r a l 3 1 3 1 6 14

Note: Figures may not sum because of rounding.

43


Table 4-9. Mean weekly household income and expenditure by income group and percentage 3

Upper- Lower-Category Upper Middle Middle Middle Lower T o t a l

Group category

T o t a l food 39.47 49.34 51.32 55.40 47.97 47.13 L o c a l p r o t e i n 6.42 6.72 6.23 6.48 2.06 5.99 T o t a l p r o t e i n 19.91 18.63 25.44 23.85 24.73 21.73 L o c a l other food 3.92 5.36 4.61 4.22 4.09 4.65 T o t a l other food 19.56 30.71 25.77 31.55 23.24 25.50

A l c o h o l and tobacco 4.74 1.07 7.09 4.48 10.70 5.11 T o t a l commercial energy 4.42 5.00 5.19 5.43 6.19 5.03

E l e c t r i c i t y 1.79 1.88 1.58 0.86 0.23 1.43 Water 0.49 0.95 0.55 1.38 0.65 0.75 T r a n s p o r t a t i o n 6.47 3.24 7.00 4.10 4.66 5.36 B u i l d i n g 6.26 9.43 6.95 9.94 11.81 8.20 Health and education 4.81 8.43 5.83 4.77 1.68 5.31 Consumer durables 15.16 7.32 3.53 4.12 9.25 9.01 Miscellaneous 5.55 3.78 5.73 5.24 6.12 5.27 Income taxes 12.64 11.45 6.81 5.15 0.96 8.77 T o t a l recorded cash expenditure 100.1 100.0 100.0 100.0 99.99 99.94

T o t a l recorded cash expenditure^ 48.01 52.43 83.65 91.36 125.59 63.48

Unaccounted expenditure 47.14 47.57 16.35 8.66 -25.59 36.74 T o t a l cash expenditure 100.5 100.0 100.0 100.0 100.0 100.2

Income category

T o t a l cash Income 86.88 77.60 71.24 65.19 39.12 74.66 T o t a l net subsistence production 4.17 15.59 22.52 26.44 50.53 17.18

P r o t e i n 1.29 4.16 8.44 2.21 23.18 5.36 Firewood 0.44 0.77 1.29 1.76 2.63 0.87

Value of s e r v i c e s flows from consumer durables 6.32 2.98 2.10 2.45 4.55 4.27

Imputed rent flows from b u i l d i n g 2.61 3.84 4.14 5.92 5.80 3.89

T o t a l income 99.98 100.0 100.0 100.0 100.0 100.0

Number of households 8 7 7 9 9 40 Perl u r b a n 5 6 4 8 3 26 R u r a l 3 1 3 1 6 14

44


Table 4.9 (cont.)

Notes: Figures may not sum because of rounding. a. Percentages f o r disaggregated categories are derived from

T o t a l recorded cash expenditure, not T o t a l cash expenditure. b. Upper group on the basis of Table 4.10 T o t a l recorded cash

expenditure excluding $85.00 spent by one household on transport ( f u e l f o r f i s h i n g ) .

income groups' a b i l i t y to purchase the t o o l s and appliances that use commercial energy sources. On the other hand, the lower income groups s t i l l purchase commercial energy, p r i m a r i l y f o r l i g h t i n g . Thus on a percentage b a s i s , more of the Lower group's cash i s used to purchase kerosene f o r b a s i c n e c e s s i t i e s (e.g., l i g h t i n g ) , whereas the Upper group consumes more e l e c t r i c i t y f o r both n e c e s s i t i e s and productive a c t i v i t i e s , as w e l l as r e c r e a t i o n and energy-intensive a p p l i a n c e s .

Tables 4.10 through 4.14 d e t a i l the income and expenditure patterns of the f i v e income groups* As noted, the value of "Net subsistence production" Increases w i t h decreasing income l e v e l s . A l so as noted, the amount of "Unrecorded cash expenditure" and "Income taxes" r i s e s w i t h income.

The f i v e Income groups f o l l o w a b a s i c a l l y s i m i l a r and p r e d i c t a b l e p a t t e r n f o r the v a r i o u s expenditure and income c a t e g o r i e s . Exceptions i n c l u d e (1) "Al c o h o l and tobacco" where the Lower Income group has mean expenditures exceeding those of the lower-middle and upper-middle groups and (2) " T o t a l recorded cash expenditure," where the Upper-Middle group has a mean expenditure l e s s than the Middle group's. I n both Instances the major r e s p o n s i b i l i t y can be a t t r i b u t e d to the s m a l l sample s i z e ; or at l e a s t I t should be u n t i l a l a r g e r study Is conducted.

A major concern to developing nations i s c a p i t a l formation, which proved h i g h l y d i f f i c u l t to assess q u a l i t a t i v e l y and by value. Savings accounts were few, and the range was s i g n i f i c a n t and of t e n i r r e s p e c t i v e of income. Thus, what i s given under "Consumer durables" i s the best approximation f o r the formation of household c a p i t a l i n c l u d i n g goods (but excluding s a v i n g s ) . These f i g u r e s , which f o l l o w a n t i c i p a t e d expenditures ( I . e . , r i s i n g w i t h income, s i g n i f i c a n t l y so f o r the Upper income group), are rule-of-thumb measurements at best and. are c l o s e l y c o r o l l a t e d w i t h the t a b l e s on "Household possessions."

However, the d e p r e c i a t i o n g u i d e l i n e s were not e a s i l y a s c e r t a i n e d . Some government o f f i c i a l s reported that p u b l i c - s e c t o r v e h i c l e s had expected l i f e spans of 18 to 24 months, p r i v a t e - s e c t o r v e h i c l e s exceeding t h i s p e r i o d by 50 percent. Although these f i g u r e s could be p e s s i m i s t i c but would d e f i n i t e l y and perhaps u n r e a l i s t i c a l l y skew the r e s u l t s ,

45


s t r a i g h t - l i n e d e p r e c i a t i o n was employed on the b a s i s of an estimated mean purchase value and a more conservative l i f e span (which i n the case of v e h i c l e s was assumed to be f i v e y e a r s ) . Admittedly, the f i g u r e s w i l l be f a r too low f o r some households ( e s p e c i a l l y upper income groups), but they are the study's best "mean" estimate. A f i n a l point on c a p i t a l formation i s t hat many imported items that could a s s i s t cash-generating a c t i v i t i e s (e.g., outboard engines and v e h i c l e s ) or socioeconomic f u n c t i o n s (e.g., food r e f r i g e r a t i o n ) appear to operate u n t i l they break down, at which time t h e i r value becomes $0.

Table 4.10. Weekly household income and expenditure—Upper income group



T o t a l food 20.14 - 54.09 37.78 38.73 L o c a l p r o t e i n 2.00 - 13.50 6.15 6.19 T o t a l p r o t e i n 7.75 - 32.04 19,06 17.83 L o c a l other food 0 - 11.65 3.75 3.00 1 zero ob. T o t a l other food 9.25 - 22.09 18.72 19.08

A l c o h o l and tobacco 0 - 24.36 4.54 1.20 4 zero obs. T o t a l commercial energy 2.60 - 16.16 4.23 3.38 1 HH i n c l u d e s

a s m a l l s t o r e E l e c t r i c i t y 0 - 3.25 1.71 2.13 2 zero obs.

Water 0 - 0.75 0.47 0.75 3 zero obs. T r a n s p o r t a t i o n 0 - 10.00 6.19 7.25 2 zero obs.

(85.00) & 1 obv. w i t h $85.00 f o r f i s h i n g adjusted to $10.00

B u i l d i n g 3.85 - 12.82 5.99 5.20 He a l t h and education 0 - 15,00 4.60 4.00 3 zero obs. Consumer durables 4.78 - 26.11 14.51 15.44 Miscellaneous 2.25 - 12.25 5.31 4.55 Income taxes 8.40 - 15.38 12.10 12.00 T o t a l recorded cash expenditure 85.05 -- 201.77 95.72 92.32 ($106.37 i f

a l l t r a n s p o r t a t i o n c o s t s included)

Unaccounted expenditure 48.23 -• 150.91 93.98 87.74 (+$10.65 f o r transport a t i o n )

T o t a l cash expenditure 140.00 - 250.00 199.38 200.00

46


Table 4.10 (cont.)


Income category

T o t a l cash income 140.00 - 250.00 199.38 200.00 T o t a l net subsistence production 0.16 - 21.20 9.56 5.71




T o t a l income 180.25 - 310.40 229.48 228.65

Notes: N = 8: 5 perlurban; 3 r u r a l . F i gures may not sum because of rounding.

Comparison of Sokehs and Uh

Although the sample s i z e i s not large enough to enable s t a t i s t i c a l comparison of r u r a l and urban areas, an attempt has been made to d i f f e r e n t i a t e between Sokehs (perlurban) and Uh ( r u r a l ) . F igure 4.2 shows the mean weekly household income f o r the two areas. The t o t a l s , $117.33 In Sokehs and $117.37 In Uh, Include d e f i c i t cash expenditures that would not be added i n a cash-flow chart and could represent e i t h e r c r e d i t (from a neighborhood store) or cash received from wage-earning r e l a t i v e s . However, d e f i c i t cash expenditures i n d i c a t e the t o t a l resources a v a i l a b l e to a household.

As the f i g u r e suggests, cash income has a l a r g e r r o l e on Sokehs, wh i l e subsistence production i s greater i n Uh. Other sources of income such as s e r v i c e flows from consumer durables are s l i g h t l y higher i n Uh. This i s somewhat s u r p r i s i n g s i n c e i t i s d i r e c t l y r e l a t e d , f o r the most p a r t , to cash income. However, the values of s e r v i c e flows and Imputed rent Include government-subsidized housing and r e h a b i l i t a t i o n programs that have increased the amount f o r Uh. With the e x c l u s i o n of d e f i c i t cash expenditures, the mean t o t a l resources a v a i l a b l e to a household are nearly I d e n t i c a l f o r the two areas.

F i g u r e 4.3 compares r u r a l and perlurban areas by income group. The f i g u r e tends to support F i g u r e 4.2: cash income i s higher i n Sokehs and subsistence production i s higher i n Uh. The exceptions f o r cash income are the upper and lower income groups, where Uh ranks higher; and the exceptions f o r subsistence production are the upper and lower-middle income groups, where Sokehs ranks higher.

47


Table 4.11. Weekly household income and expenditure—Upper-Middle income group



T o t a l food 12.14 - 36.50 28.05 31.35 L o c a l p r o t e i n 0 - 16.49 3.82 1.25 3 zero obs. T o t a l p r o t e i n 6.00 - 21.92 10.59 10.35 L o c a l other food 0 - 8.44 3.05 2.75 1 zero ob. T o t a l other food 8.73 - 25.87 17.46 18.41

A l c o h o l and tobacco 0 - 4.28 0.61 0 6 zero obs. T o t a l commercial energy 0.75 - 5.00 2.84 3.00

E l e c t r i c i t y 0 - 2.50 1.07 0.75 2 zero obs. Water 0 - 0.75 0.54 0.75 2 zero obs. T r a n s p o r t a t i o n 0 - 5.00 1.84 1.85 2 zero obs. B u i l d i n g 1.92 - 9.62 5.36 4.81 Health and education 0 - 20.75 4.79 1.75 2 zero obs. Consumer durables 0.95 - 8.65 4.16 4.32 Miscellaneous 0 - 3.50 2.15 2.15 1 zero ob. Income taxes 5.55 - 7.50 6.51 6.60 T o t a l recorded cash expenditure 40.36 - 72.99 56.85 60.09

Unaccounted expenditure 46.45 - 57.88 51.58 49.91 T o t a l cash expenditure 92.50 — 125.00 108.43 110.00

Income category

T o t a l cash Income 192.50 — 125.00 108.43 110.00 T o t a l net subsistence p r o d u c t i o n 8.15 - 34.98 21.78 22.33

P r o t e i n 0 - 25.16 5.81 0 c > zero obs Firewood 0.16 - 1.55 1.07 1.21



T o t a l income 115.37 164.04 139.73 140.94

Notes: N a 7: 6 perlurban; 1 r u r a l . F i gures may not sum because of rounding.

48


Table 4.12. Weekly household income and e x p e n d i t u r e — M i d d l e income group



T o t a l food 7.13 - 49.07 29.84 30.10 L o c a l p r o t e i n 1.25 - 9.55 3.62 2.48 2 zero obs • T o t a l p r o t e i n 1.25 - 36.57 14.79 11.46 L o c a l other food 0 - 7.15 2.68 2.00 2 zero obs • T o t a l other food 5.88 - 27.90 14.98 12.50

A l c o h o l and tobacco 0 - 10.35 4.12 5.18 2 zero obs. T o t a l commercial energy 1.80 - 7.60 3.02 2.55

E l e c t r i c i t y 0 - 1.00 0.92 0 4 zero obs. Water 0 - 0.75 0.32 0 4 zero obs. T r a n s p o r t a t i o n 0 - 9.50 4.07 2.50 3 zero obs • B u i l d i n g 2.88 - 8.13 4.04 2.88 Health and education 0 - 17.00 3.39 0 4 zero obs • Consumer durables 0.88 - 5.65 2.05 1.03 Miscellaneous 1.70 - 4.00 3.33 2.75 Income taxes 2.10 - 4.80 3.96 4.41 T o t a l recorded cash expenditure 40.16 - 75.50 58.14 55.00

Unaccounted expend i t u r e (-9.91) -- 28.81 11.36 8.03 2 negatives

T o t a l cash expenditure 59.50 • 80.00 69.50 73.50

Income category

T o t a l cash income 59.50 - 80.00 69.50 73.50 T o t a l net s u b s i s tence production 6.11 - 44.27 21.97 18.85

P r o t e i n 0 - 33.06 8.23 3.30 1 zero ob. Firewood 1.21 - 1.55 1.26 1.21



T o t a l Income 71.67 — 118.52 97.56 100.54

Notes: N = 7: 4 perlurban; 3 r u r a l . Figures may not sum because of rounding.

- 4 9


Table 4.13. Weekly household income and expenditure—Lower-Middle income group



T o t a l food 7.59 - 33.17 23.25 21.84 L o c a l p r o t e i n 0 - 7.93 2.72 2.33 4 zero obs. T o t a l p r o t e i n 4.50 - 14.54 10.01 10.90 L o c a l other food 0 - 3.83 1.77 1.50 2 zero obs. T o t a l other food 3.09 - 20.62 13.24 14.30

A l c o h o l and tobacco 0 - 5.45 1.88 2.50 4 zero obs. T o t a l commercial energy 0.75 - 4.00 2.28 1.90

E l e c t r i c i t y 0 - 1.50 0.36 0 6 zero obs. Water 0 - 0.75 0.58 0.75 2 zero obs • T r a n s p o r t a t i o n 0 - 3.00 1.72 1.50 1 zero ob. B u i l d i n g 2.88 - 9.62 4.17 3.85 He a l t h and education 0 - 7.25 2.00 1.50 1 zero ob. Consumer durables 0.63 - 5.31 1.73 1.00 Miscellaneous 1.45 - 3.67 2.20 2.14 Income taxes 0 - 3.00 2.16 2.76 2 zero obs. T o t a l recorded cash expenditure 19.72 - 54.88 41.97 41.52

Unaccounted expenditure (-13.63) - 25.28 3.98 5.16 2 negatives T o t a l cash expenditure 41.25 — 50.00 45.94 46.00

Income category

T o t a l cash income 41.25 — 50.00 45.94 46.00 T o t a l net subsistence production 5.31 - 28.17 18.63 21.46




T o t a l Income 59.26 — 81.51 70.47 71.85

Notes: N = 9: 8 perlurban; 1 r u r a l . F i gures may not sum because of rounding.

50


Table 4*14. Weekly household income and expenditure—Lower income group



T o t a l food 2-76 - 27.81 12.55 11.38 L o c a l p r o t e i n 0 - 2.80 0.54 0 7 zero obs. T o t a l p r o t e i n 0.95 - 16.90 6.47 5.60 L o c a l other food 0 - 3.11 1.07 1.00 4 zero obs. T o t a l other food 1.32 - 10.91 6.08 6.48

A l c o h o l and tobacco 0 - 6.22 2.80 1.95 2 zero obs. T o t a l commercial energy 1-00 - 2.15 1.62 1.46

E l e c t r i c i t y 0 - 0.50 0.06 0 8 zero obs. Water 0 -. 0.75 0.17 0 7 zero obs -Tr a n s p o r t a t i o n 0 - 5.00 1-22 0.50 3 zero obs. B u i l d i n g 1.92 - 5.77 3.09 2.88 Health and education 0 - 1.50 0.44 0 6 zero obs. Consumer durables 0.86 - 14.20 2.42 1.00 Miscellaneous 0.75 - 3.22 1.60 1.45 Income taxes 0 - 2.25 0.25 0 8 zero obs. T o t a l recorded cash expenditure 12.78 - 57.08 26.16 22.24

Unaccounted expenditure (-19.58) - 20.22 (-5.33) (-6-79) 7 negatives T o t a l cash expenditure 8.00 — 37.50 20.83 20.00

Income category

T o t a l cash Income 8.00 — 37.50 20.83 20.00 T o t a l net subsistence production 15.83 - 46.29 26.90 27.63

P r o t e i n 3.75 - 22.36 12.34 12.80 Firewood 1.21 - 1.55 1.40 1.55



T o t a l income 27.75 — 88.28 53.24 54.03

Notes: N => 9: 3 perlurban; 6 r u r a l . F i gures may not sum because of rounding.

51


Sokehs Iperi-urban] = $117.33 Uh (rural) = $117.37 N=26 N = 14

I I Deficit expenditure

Other (imputed) income

( I Subsistence production

I1MMI Cash income

Figure 4.2. Comparison of rural and periurban: mean weekly household income and resources.

250

225

200

175

£15 O o c

2 125

(0 100

>> 2 <1> 75

50

25

S= Sokehs U = Uh

I I Deficit (cashl expenditure

=1 Other |imputed| income

J Subsistence production

Cash income

UPPER UPPER MIDDLE LOWER LOWER TOTAL MIDDLE MIDDLE

Income Group

Figure 4.3. Mean weekly household income by location and income group.

53


I n t e r e s t i n g l y , however, f o r a l l income groups the t o t a l resources a v a i l a b l e to a household are higher In uh than i n perlurban sokehs. Again, considerable c a u t i o n should be used In reading these f i g u r e s because the sample s i z e Is sm a l l . I t i s a l s o too small to e x t r a p o l a t e y e a r l y gross income per c a p i t a v a l u e s , $923 per person per year on Sokehs and $826 In Uh ( e x c l u d i n g d e f i c i t cash expenditures), to higher l e v e l s of aggregation such as Pohnpei State as a whole.

Even I f the data were accepted as being r e p r e s e n t a t i v e (hence supporting conclusions such as r u r a l households make more use of t h e i r r e s o u r c e s ) , the main issue revolves around the q u a n t i t y and q u a l i t y of the resources a v a i l a b l e . Whether i n r u r a l Uh or perlurban Sokehs, households i n the lower income groups do not have s u f f i c i e n t cash income or t o t a l income resources to provide many options to t h e i r expenditure behavior. In other words, cash expenditures are r e l a t i v e l y f i x e d , w i t h few s u b s t i t u -t a b i l i t y o p t ions. This has s i g n i f i c a n t i m p l i c a t i o n s w i t h respect to an introduced technology such as e l e c t r i c i t y that r e q u i r e s considerable cash expenditures i f a household Is to maximize end-use o p t i o n s .

D i s t r i b u t i o n of Income

Figure 4.4 and Table 4.IS present data on the d i s t r i b u t i o n of income between income groups. As both the Lorenz Curve and the ta b l e i n d i c a t e , the Upper income group re c e i v e s a d i s p r o p o r t i o n a t e share of cash income. The Lower income group r e f l e c t s the Inverse of t h i s r e l a t i o n s h i p . Only the Upper-Middle group and, to a l e s s e r extent, the Middle group have s i m i l a r percentages of cash income and p o p u l a t i o n . Owing to the l i m i t e d s i z e of the Uh sample, measurement has been l i m i t e d to the t o t a l sample.

The G l n i c o e f f i c i e n t of 0.47 i s somewhat higher than expected. Jackson (1981), i n h i s study of income d i s t r i b u t i o n i n Papua New Guinea, determined that a l l geographical areas and employment sectors had c o e f f i c i e n t s of l e s s than 0.4000. Stavenuiter (1983) adjusted F i j i ' s Household Income and Expenditure Study (HIES) (see Table 4.7) to r e f l e c t more accur a t e l y unreported business Income, which r e s u l t e d In a c o e f f i c i e n t of 0.482 f o r urban areas, the only c l a s s i f i c a t i o n approximating that f o r Pohnpei. However, i t must be stres s e d that the measure f o r Pohnpei could be misleading because I t i s based on cash income and does not r e f l e c t remittances or t r a n s f e r s of cash between income groups. Given the la r g e amounts of unaccounted cash expenditure f o r the higher income groups and the d e f i c i t expenditures f o r the lower, t r a n s f e r s could be s u b s t a n t i a l .

As a s i m p l i s t i c measure of the d i s t r i b u t i o n of oppor t u n i t y , higher education (high school diploma and above) has been r e l a t e d to income groups i n Table 4.16. The data c l e a r l y show that the upper income groups have a d i s p r o p o r t i o n a t e share of those a t t a i n i n g higher e d u c a t i o n a l l e v e l s . Without a d i s c u s s i o n on which i s the cause and which i s the e f f e c t (income or education), i t could be concluded that the upper groups are In a b e t t e r p o s i t i o n to maintain t h e i r incomes and to capture f u t u r e o p p o r t u n i t i e s . As an i n c r e a s i n g number of persons w i t h higher education

54


100

C u m u l a t i v e % o f T o t a l Income

90 100

Cumulative % of Total Population

Figure 4.4. Lorenz Curve of income distribution.

55


Table 4.15. D i s t r i b u t i o n of cash income by income group

Mean weekly % of T o t a l Mean weekly % of T o t a l HH cash Income

Income group ($) P o p u l a t i o n Cash income

Upper 199.38 17.23 46.35 Upper-Middle 108.43 24.37 22.05 Middle 69.50 18.49 14.14 Lower-Middle 45.94 20.59 12.01 Lower 20.83 19.33 5.45

T o t a l 86.04 100.01 100.00

Note: G i n i c o e f f i c i e n t » 0.4702.

Table 4.16. Income l e v e l s and higher education

HHS Po p u l a t i o n w i t h T o t a l Persons/ high school

Income group Uh Sokehs T o t a l P o p u l a t i o n HH diploma and over

Upper 3 5 8 41 (17.2%) 5.1 9 (36.0%) Upper-Middle 1 6 7 58 (24.4%) 8.3 9 (36.0%) Middle 3 4 7 44 (18.5%) 6.3 3 (12.0%) Lower-Middle 1 8 9 49 (20.6%) 5.4 2 (8.0%) Lower 6 3 9 46 (19.3%) 5.1 2 (8.0%)

T o t a l 14 26 40 238 (100.0%) 6.0 25 (100.0%)

56


enter the job market and as more technologies (e.g., microcomputers) are introduced, higher education w i l l become i n c r e a s i n g l y important.

Other Household C h a r a c t e r i s t i c s

The value of household possessions i s given i n Table 4.17. As the ta b l e i n d i c a t e s , the value r i s e s w i t h Income l e v e l . The exceptions to t h i s r u l e are found In the Lower income group. These households have received a s s i s t a n c e from a f e d e r a l l y funded (U.S.) r e h a b i l i t a t i o n program or from r e l a t i v e s . Those persons i n the higher value ranges o f t e n possess a v e h i c l e , a r e f r i g e r a t o r , an outboard engine, or a st e r e o . A household i n the Lower income group may own as l i t t l e as $50 worth of kitchenware and c u t l e r y , whereas those i n the Upper may own hundreds of d o l l a r s ' worth of these items.

Table 4.18 shows the number of households r e p o r t i n g v a r i o u s items. As the t a b l e suggests, e l e c t r i c a l appliances are found i n the area that has had e l e c t r i c i t y f o r s e v e r a l years, that i s , Sokehs. The radios reported i n Uh are b a t t e r y powered. Regardless of the power source, r a d i o s are the s i n g l e most popular item, followed by kerosene lanterns and kerosene stoves. Sewing machines are a l s o f a i r l y common, e s p e c i a l l y i n r u r a l Uh.

Table 4.19 describes the type of house c o n s t r u c t i o n by income group. As i s shown, as income r i s e s , imported m a t e r i a l s become more common, w i t h concrete block c o n s t r u c t i o n being the most popular i n the upper groups. For those i n the lower groups w i t h concrete block houses, i t must be noted that these houses have been financed v i a a U.S. old-age program.

The t y p i c a l house has from one room f o r a nahs ( t r a d i t i o n a l house made from indigenous m a t e r i a l s ) to three or four rooms f o r a concrete s t r u c t u r e . Almost a l l houses have separate cook houses or sheds. S i m i l a r l y , a l l (except two) w i t h piped water have outside shower-type bathing f a c i l i t i e s . Every house has outside t o i l e t f a c i l i t i e s , u s u a l l y located i n the mangroves.

Piped water i s u s u a l l y outside the house. Although common i n Sokehs, i t i s rare i n Uh where rainwater and w e l l s are more common as potable sources. In both areas streams play major r o l e s In the washing of c l o t h e s , as w e l l as f o r bathing In Uh. Wastewater d i s p o s a l i s on the ground.

The t o i l e t f a c i l i t i e s are b a s i c a l l y outhouses (benjo) i n the mangrove swamps, fl u s h e d by t i d a l a c t i o n . In the more densely populated Sokehs, t h i s could pose s e v e r a l major h e a l t h problems; and I t should be added that there Is cholera In the State of Truk. Mangroves and t i d a l f l a t s are a l s o r e p o s i t o r i e s f o r rubbish d i s p o s a l . I n a d d i t i o n , households have a nearby area In which to dispose of rubbish.

57


Table 4.17. Value of household possessions by income group and study area

Nunfcer of households Averages, value of\lncooe household^ group possessions^ area

Upper Upper-Middle Middle Lower-Middle Lower Total Averages, value of\lncooe household^ group possessions^ area Uh Sokehs Total Uh Sokehs Total Uh Sokehs Total Uh Sokehs Total Uh Sokehs Total Uh Sokehs Total

Less than $500 - - - 1 1 2 2 2 4 1 6 7 4 2 6 8 11 19

$501 - $2,000 1 1 2 3 3 1 2 J 2 2 - 1 1 2 9 a

12,001 - $3,500 - 1 1 1 1 - - 1 - 1 1 2 3

$3,501* 2 3 5 1 1 - - 1 - 1 3 4 7

Total 3 5 8 1 6 7 3 4 7 1 8 9 6 3 9 14 26 40

Table 4.18. Household possessions

Number of households r e p o r t i n g s e l e c t e d items

Item Uh Sokehs T o t a l %

Kerosene l a n t e r n 26 8 34 65 Kerosene stove 19 12 31 60 E l e c t r i c hot p l a t e - 2 2 4 E l e c t r i c stove - 5 5 10 Radio 18 17 35 67 Stereo 1 5 6 12 T e l e v i s i o n - 5 5 10 Sewing machine 15 6 21 40 E l e c t r i c r e f r i g e r a t o r - 9 9 17 Kerosene r e f r i g e r a t o r 4 - 4 8 E l e c t r i c f r e e z e r 1 — 1 2 Kerosene f r e e z e r 1 - 1 2 E l e c t r i c fan - 6 6 12 A i r c o n d i t i o n e r - 2 2 4 E l e c t r i c washer - 2 2 4 Canoe 5 6 11 21 Boat 4 2 6 12 Outboard motor 5 3 8 15 Motorcycle - 2 2 4 B i c y c l e 1 - 1 2 V e h i c l e 8 4 12 4

Note: N = 52.

Lot s i z e seems to depend more on l o c a t i o n than income. On Sokehs, l o t s are r e l a t i v e l y small and landholdings are at the most one acre. R u r a l Uh has l a r g e r l o t s , and landholdings can be up to f i v e acres. A database on landholdings and land use i s being developed but Is s t i l l u n a v a i l a b l e . This f a c t , together w i t h the c u l t u r a l c h a r a c t e r i s t i c of not d i s c u s s i n g or d i s c l o s i n g the l o c a t i o n and type of a g r i c u l t u r a l land use, e l i m i n a t e d the opportunity f o r d e t a i l e d a n a l y s i s .

59


Table 4.19. Type of housing construction by Income group and study area

Upper Upper-Middle Middle Lower-Middle Lower Total

fii fb qq o rt H-J. C H* ft O CO rr M CD o »-• to ai rr o< (D CO •1

O ft) CD O 5 R> 0

O OQ

o

Type \ l i of house\

Income group Uh Sokehs Total Uh Sokehs Total Uh Sokehs Total Uh Sokehs Total Uh Sokehs Total Uh Sokehs Total

Nans ( t r a d i t i o n a l ) - - - - 1 1 2 2 4 - 4 4 6 2 8 8 9 17

Wood and t i n 1 2 3 - 3 3 - 1 1 - 3 3 I 9 10

Concrete 2 3 5 1 2 3 1 1 2 1 1 2 - 1 1 5 8 13

Total 3 5 8 1 6 7 3 4 7 1 8 9 6 3 9 14 26 40

Chapter 5- HOUSEHOLD ENERGY

This chapter presents household energy data i n the framework of the two study areas, Uh and Sokehs, and the f i v e income groups d e t a i l e d i n chapter 4. With respect to assessing the impact of e l e c t r i c i t y on c u l t u r e and socioeconomic development, the data are i n c o n c l u s i v e . This i s due to the heavy s u b s i d i z a t i o n received by e l e c t r i c i t y consumers and to the l i m i t e d g eographical, and hence economic, area near the c a p i t a l that has been provided w i t h e l e c t r i c i t y . The consumption patterns that have been I d e n t i f i e d are not s u r p r i s i n g and appear to be c l o s e l y l i n k e d to income l e v e l s .

End-use (of e l e c t r i c i t y ) patterns appear s i m i l a r l y to be l i n k e d to income. This trend i s no t i c e a b l e as no connection seems to e x i s t between e l e c t r i c i t y and socioeconomic development. I n any r e l a t i o n s h i p that might appear, i t has not been p o s s i b l e t o i s o l a t e e l e c t r i c i t y from a host of other f a c t o r s i n c l u d i n g educational achievement and Income l e v e l s , nor to e s t a b l i s h a cause and e f f e c t r e l a t i o n s h i p . Thus the data suggest that e l e c t r i c i t y , e s p e c i a l l y at a r t i f i c i a l l y low r a t e s , may f a c i l i t a t e the purchase of consumer goods, such as stereos and t e l e v i s i o n s , which a l s o have comparatively low import d u t i e s . This could be the major impact on c u l t u r e , although e l e c t r i c i t y cannot be determined as the cause.

The f i r s t s e c t i o n of t h i s chapter discusses energy used f o r cooking. This i s follo w e d by a s e c t i o n on household l i g h t i n g . The t h i r d and f o u r t h s e c t i o n s h i g h l i g h t household energy use and e l e c t r i c i t y consumption i n Sokehs.

Cooking

Table 5.1 In d i c a t e s that most households use a v a r i e t y of f u e l sources. Nearly a l l of the households use the t r a d i t i o n a l uhmw (an earthen oven, s i m i l a r to the F i j i a n lovo and Hawaiian imu), u s u a l l y during the weekend and f o r f e a s t s . Wood Is used to b o l l water (e.g., f o r r i c e and b r e a d f r u i t ) , w i t h the cash expenditure sources (kerosene and e l e c t r i c i t y ) reserved f o r the meal's main dishes. Only three households had the convenience of not having to c o l l e c t firewood or to b u i l d and tend a f i r e ; In other words, they cooked only w i t h e l e c t r i c i t y or kerosene, which had p r i o r i t y over reduced cash expenditure.

Cooking w i t h wood commonly Is done over an open f i r e that i s surrounded by rocks arranged i n such a manner as to enable the use of pots and pans. As described e a r l i e r , 8 to 10 kg of firewood are c o l l e c t e d per person per hour w i t h 30 to 35 kg of firewood c o l l e c t e d per household per week. I n l a r g e r households, the amount c o l l e c t e d per week can e a s i l y double.

Weekly expenditures on kerosene f o r cooking u s u a l l y range from $1.80 to $3.80, or 1 to 2 g a l l o n s , per week. Kerosene costs $1.80 per g a l l o n on


y

Table 5.1. Number of households by energy source f o r cooking

Energy source Uh Sokehs T o t a l

E l e c t r i c i t y + kerosene + wood + uhmw - 2 2 E l e c t r i c i t y + wood + uhmw - 2 2 E l e c t r i c i t y + uhmw - 3 3 Kerosene only 1 - 1 Kerosene + wood + uhmw 19 10 29 Wood only 1 1 2 Wood + uhmw 5 8 13

T o t a l 26 26 52

Sokehs and $1.90 In Uh. The cost of the common one-burner stoves ranges from $75.00 to $86.00 at the three most popular major r e t a i l o u t l e t s . Kerosene stoves can a l s o be given as g i f t s or as a f a m i l y or t r a d i t i o n a l o b l i g a t i o n , or simply passed on among f a m i l y members.

E l e c t r i c stoves range i n p r i c e at r e t a i l o u t l e t s from $500 to $865, although one household reported a $300 c o s t . The average e l e c t r i c stove uses approximately 100 kwh per month (Smith: 1983) or costs $3.00 per month to operate at the current t a r i f f . This value i s r e l a t i v e l y s i m i l a r to that of the average 120 to 140 kg of firewood c o l l e c t e d per month per household, which, when valued at $0.03/kg gives a nonmarket value of $3.60 to $4.20 per month. The s l i g h t d i f f e r e n c e between the e l e c t r i c stove and the use of firewood i n operating costs can be accounted f o r by the present t a r i f f r a t e s . A l s o , those without s u b s t a n t i a l cash income can a f f o r d n e i t h e r to purchase nor to pay f o r the operating cost of a stove. Hot p l a t e s , ranging i n p r i c e from $47.50 to $88.24, are a l s o u t i l i z e d but to a l e s s e r extent than e l e c t r i c stoves ( t h r e e households had hot p l a t e s and f i v e had s t o v e s ) .

Table 5.2 describes energy used f o r cooking by income group. Noticeable i s that e l e c t r i c i t y as an energy source f o r cooking i s predomi n a t e l y used by the higher income groups, although these groups In Uh use kerosene. The middle and lower Income groups a l s o use kerosene, but a number of households use only firewood.

As I t could be argued that e l e c t r i c i t y i s an i n e f f i c i e n t form of cooking i n Pohnpei, two questions a r i s e :

62


Table 5.2. Energy source for cooking by income group, study area, and number of households

o OQ 3

Upper Upper-Middle Middle Lower-Middle Lower Total \Income r r v v

EnergyX group — source \ a r e a Uh Sokehs Total Uh Sokehs Total Uh Sokehs Total Uh Sokehs Total Uh Sokehs Total Uh Sokeh Total

01 pi CD O rt h* I Hi aa H-(D O CO ft M

CO n (T> 0) rt (D CD

n> < M O •a B to 3

ON

E l e c t r i c i t y • kerosene + wood + uhmw

E l e c t r i c i t y + wood + uhmw

E l e c t r i c i t y • uhmw

Kerosene only

Kerosene + wood

Kerosene + wood + uhmw

Wood only

Wood + uhmw

Total

1 - 1

1 4 5

1

1 1

1 3 4

4 4

1 8

3 3

1 - 1

1 - 1

8 10 18

1 1

4 8 12

14 26 40

1. With the increased d i s t r i b u t i o n of, or access t o , e l e c t r i c i t y , w i l l those i n the higher income group i n the r u r a l areas switch to cooking w i t h e l e c t r i c i t y i f conservation measures such as increased t a r i f f s are not implemented?

2. I f wood i s a more d e s i r a b l e cooking f u e l from a macroperspective, what i s being done to f a c i l i t a t e I t s e f f i c i e n t use?

Although the data g e n e r a l l y i n d i c a t e that a range of f u e l sources i s u t i l i z e d , i t should be apparent that only c e r t a i n Income groups are using e l e c t r i c i t y f o r cooking. For example, people i n the upper income groups who cook w i t h e l e c t r i c i t y have a t t a i n e d higher educational l e v e l s , have o f t e n t r a v e l e d beyond Pohnpei and the FSM, and are o f t e n employed i n the p u b l i c s e c t o r , which means exposure to a i r c o n d i t i o n i n g , photocopy machines, e t c . Even though these general patterns can be a s c e r t a i n e d , i t i s d i f f i c u l t to assess why an i n d i v i d u a l household would decide to use e l e c t r i c i t y f o r cooking. None of the people of the households i n the survey l i v e s i n confined apartments. For those w i t h access to e l e c t r i c i t y who do not use i t f o r cooking, the reason appears more o b v i o u s — i n s u f f i c i e n t money.

L i g h t i n g

On Sokehs the most common energy source f o r l i g h t i n g i s e l e c t r i c i t y . Of the nine households using kerosene, seven f a l l Into the lower income groups. I t should a l s o be noted that four households using e l e c t r i c i t y have run extension cords from neighboring residences or b u i l d i n g s .

I f the Uh and Sokehs f i g u r e s given i n Table 5.3 are compared, I t could be assumed that Uh r e s i d e n t s w i l l use e l e c t r i c i t y i n a manner s i m i l a r to that i n Sokehs. However, as Uh i s a r u r a l area w i t h fewer cash income-earning o p p o r t u n i t i e s , w i l l they? Again, i t i s d i f f i c u l t to a c c u r a t e l y a s c e r t a i n or p r e d i c t an i n d i v i d u a l household's consumption behavior. Comments such as "not enough money" have to be considered i n l i g h t of a $10 charge f o r hookup, $10 to $15 f o r minimum w i r i n g (e.g., one or two l i g h t b u l b s ) , and a monthly b i l l of $1 to $2. As the Income and expenditure data presented i n chapter 4 suggest, there might not be enough money. Other reasons could be present such as la c k of f a m i l i a r i t y w i t h , or exposure to, e l e c t r i c i t y .

Energy Use on Sokehs

Table 5.4 r e s t a t e s data from the preceding two se c t i o n s concerning Sokehs. As i n d i c a t e d , e l e c t r i c i t y i s the primary source f o r l i g h t i n g . For cooking, kerosene i s common to a l l but the Lower Income group's, and use of wood predominates here. E l e c t r i c i t y , as a source f o r cooking, i s found only i n the upper income groups, w i t h one exception.

Other uses of e l e c t r i c i t y are r e f l e c t e d i n Tables 4.17 and 4.18 on household possessions. T y p i c a l l y , a household w i l l have only one or

64


Table 5.3. Household energy source f o r l i g h t i n g by area and number of households

Energy source Uh Sokehs T o t a l

E l e c t r i c i t y 1 17 18 Kerosene 25 9 34

T o t a l 26 26 52

Table 5.4. Sokehs energy use by Income group and number of households

Energy\ Main Upper- Lower-use \ source Upper Middle Middle Middle Lower T o t a l

Cooking With e l e c t r i c i t y 4 2 0 1 0 7 With kerosene 1 2 4 3 0 10 With wood 0 2 0 4 3 9

T o t a l 5 6 4 8 3 26

L i g h t i n g With e l e c t r i c i t y 5 5(E) 3 3(2E) K E ) 17 With kerosene 0 1 1 5 2 9

T o t a l 5 6 4 8 3 26

Notes: E D extension cord; hence (2E) means that two of the ! three house-holds were s u p p l i e d w i t h e l e c t r i c i t y from neighbors; s i m i l a r l y (E) means that one of the households shown i s su p p l i e d w i t h e l e c t r i c i t y by a neighbor.

two o u t l e t s ; yet some households have as many as eight o u t l e t s . One a n t i c i p a t e d b e n e f i t of e l e c t r i c i t y i s an increase i n studying by students. Data on the use of time tend to support t h i s premise, as Sokehs's students appear to study more than Uh students. But i s t h i s a r e s u l t of e l e c t r i c i t y , the higher value given to educational achievement i n Sokehs, g e n e r a l l y higher l e v e l s of educational achievement on Sokehs, or a combination of a l l of these? I t seems impossible to separate these and to s t a t e w i t h c e r t a i n t y that e l e c t r i c i t y (or any of the others) i s the s o l e cause.

65


Most radios continue to be batt e r y powered, although t h i s i s changing on Sokehs. T e l e v i s i o n s and other appliances such as fans have a l s o gained acceptance. E l e c t r i c r e f r i g e r a t o r s are found i n 35 percent of the Sokehs households, compared to 15 percent w i t h kerosene r e f r i g e r a t o r s i n Uh. Kerosene f o r a r e f r i g e r a t o r costs approximately $8.00 per week, a s i g n i f i c a n t l y higher operating cost than f o r e l e c t r i c models at approximately $0.75 per week.

The cost of purchasing an e l e c t r i c r e f r i g e r a t o r ranges from $399 to $745. Kerosene r e f r i g e r a t o r s cost from $600 to $850. Although the current t a r i f f rates skew the a n a l y s i s , given the wide d i f f e r e n c e between both operating and purchase c o s t s , the use of e l e c t r i c i t y f o r r e f r i g e r a t i o n would seem a l o g i c a l choice by the consumer.

E l e c t r i c i t y Consumption on Sokehs

An attempt was made to assess e l e c t r i c i t y consumption In the study areas. I n Uh, which was r e c e n t l y connected, there was only one consumer, a combination small store and pool h a l l , which used roughly 330 kwh/month. On Sokehs past meter records (from November 1980 to March 1981) d i d not always match corresponding monthly b i l l s . Some households a l s o had major v a r i a t i o n s In t h e i r monthly b i l l s . Given these c o n s t r a i n t s , the data presented below should be treated as an i n d i c a t i o n of the magnitude of consumption.

Table 5.5 shows average monthly consumption f o r a l l metered consumers f o r the pe r i o d November 1980 to March 1981 (the most recent records a v a i l a b l e ) . On the average, the 67 metered consumers used 222.8 kwh/month. When the four businesses, two churches, and one m u l t i p l e residence are excluded, the mean i s 194.9 kwh/month. The businesses are small r e t a i l s t o r e s , a laundromat, and a small cinema, w i t h one meter s e r v i n g , f o r example, both a r e t a i l s t o r e and the cinema. As the f i g u r e s i n d i c a t e , 50.8 percent of the consumers use between 150 to 299 kwh/month. This range i s s i m i l a r to that f o r a l l r e s i d e n t i a l consumers i n Pohnpei S t a t e (Table 3.3). Ll o y d et a l . (1982) found only 11.9 percent of consumers i n the Nadi-Lautoka ( F i j i ) study i n t h i s range, w h i l e F i j i E l e c t r i c i t y A u t h o r i t y records showed 10.6 percent ( c i t e d by L l o y d et a l . ) . Most Nadi-Lautoka consumers use l e s s than 100 kwh/month. This co n t r a s t probably r e f l e c t s the d i f f e r e n c e i n t a r i f f r a t e s between F i j i and Pohnpei.

Table 5.6 shows the e l e c t r i c i t y consumption f o r study households on the b a s i s of monthly b i l l s . Mean consumption I s 211.8 kwh/month, which Is c o nsiderably l e s s than the Pohnpei State mean f o r r e s i d e n t i a l consumers (328.9 kwh/month), but somewhat s i m i l a r to Sokehs Ts f i g u r e s (222.8 kwh/ month f o r a l l consumers and 194.9 kwh/month f o r r e s i d e n t i a l consumers o n l y ) .

As the ta b l e I n d i c a t e s , e l e c t r i c i t y consumption g e n e r a l l y increases w i t h income. The Middle group i s an exception because mean consumption i s below that of the Lower-Middle group. However, the ta b l e a l s o shows

66


Table 5.5. Mean monthly e l e c t r i c i t y consumption on Sokehs I s l a n d : November 1980 - March 1981

kwh/month N Mean Notes

0 - 49 2 (3.0%) 41.4 50 - 99 10 (19.9%) 77.9

100 - 149 6 (9.0%) 127.8 150 - 199 20 (29.9%) 184.1 200 - 299 14 (20.9%) 235.1

300 - 399 11 (16.4%) 341.5 400 - 499 2 (3.0%) 420.8 500 + 2 (3.0%) 863.9

T o t a l 67 (100.1%) 222.8

Business = 289.8; 2 churches = 274.8, 205.8

2 businesses = 345.6, 390.6

Business =» 1,065.4; m u l t i p l e residence D 662.4

4 businesses s 522.9; 2 churches s

240.3; m u l t i p l e residence a 662.4; excluding these 7 consumers* mean = 194.9.

Source: State Department of Resource Conservation and S u r v e i l l a n c e : 1983. Raw Data from Records. Pohnpei.

that there Is a considerable range of consumption l e v e l s w i t h i n an Income group. Thus, i t would appear that given current t a r i f f s , the choice by the i n d i v i d u a l household to consume e l e c t r i c i t y at v a r y i n g l e v e l s (e.g., 100 or 200 kwh/month) may be nearly as important a f a c t o r as income In determining use.

F i g u r e 5.1 shows the r e l a t i o n s h i p between the value of a l l household possessions* and e l e c t r i c i t y use. As i n d i c a t e d , there i s a general trend Income. For the Lower group, the value of household possessions i s low but higher than that of the next two income groups. This could r e f l e c t s o c i a l w e l f a r e programs (e.g., r e h a b i l i t a t i o n of an i n j u r e d worker who

^Household possessions i n c l u d e a l l consumer durables, whether, f o r example, an e l e c t r i c a l a p p l i a n c e , an outboard motor, or f u r n i t u r e .

67


cannot r e t u r n to h i s previous job and has been given a boat and motor f o r f i s h i n g ) , which skew the data. I t could a l s o r e f l e c t a d e c i s i o n by households, f o r example, In the Middle group, to d i r e c t cash expenditures to other items such as education and t r a n s p o r t .

The Lower income group has the lowest l e v e l of e l e c t r i c i t y consumption. The end use i s p r i m a r i l y f o r l i g h t i n g . For the other groups, e l e c t r i c i t y use and the value of household possessions appear to have a p a r a l l e l r e l a t i o n s h i p that begins to converge w i t h higher incomes. Those w i t h higher incomes o f t e n own major items such as v e h i c l e s , which do not use e l e c t r i c i t y .

Table 5.6. E l e c t r i c i t y use by income group (kwh/month)

Income group N Range Mean Median

Upper 5 135.9 - 464.1 320.1 357.0 Upper-Middle 5 107.1 - 357.0 214.3 142.7 Middle 3 107.1 - 142.7 130.8 142.7 Lower-Middle 3 107.1 - 214.3 154.7 142.7 Lower 1 71 .6 71.6 71.6

T o t a l 17 71.6 - 464.1 211.8 142.7

68


Figure . Value of household possessions and kwh consumed per month by

weekly household cash income.

Chapter 6. POLICY QUESTIONS

This chapter discusses major p o l i c y questions i d e n t i f i e d by t h i s study. S e v e r a l key Issues are present throughout:

. H e a v i l y s u b s i d i z e d t a r i f f r a t e s

• Absence of c l e a r e l e c t r i f i c a t i o n p o l i c y and o b j e c t i v e s

. No i d e n t i f i a b l e r e l a t i o n s h i p between e l e c t r i c i t y and socioeconomic development

. An apparently emerging s t r a t i f i c a t i o n of s o c i e t y based on the a b i l i t y to consume ( I . e . , to purchase imported consumer goods and e l e c t r i c i t y )

The f i r s t p o l i c y question concerns what the community perceives as i t s p r i o r i t y needs and the community's r o l e i n determining that need. On Sokehs, which i s becoming more densely populated, s a n i t a t i o n has to be a high p r i o r i t y . There are simply too many people i n too small an area not to have a sewer system. The experience w i t h c h o l e r a i n Truk, 300 m i l e s d i s t a n t , should not be ignored. In l e s s densely populated Uh, t i d a l f l u s h may s t i l l be a p p r o p r i a t e . However, as Table 6.1 i n d i c a t e s , i n both Uh and Sokehs, s a n i t a t i o n was perceived by r e s i d e n t s as a high p r i o r i t y (number two on Sokehs, number three i n Uh).

Water was described as the number one p r i o r i t y i n Uh and number three p r i o r i t y on Sokehs. Although some could argue that these values r e f l e c t the recent and severe drought, area r e s i d e n t s are a l s o s t a t i n g a r e a l i t y : Pohnpei has a high rate of r a i n f a l l and yet experiences periods of water s c a r c i t y . Furthermore, i t i s a matter of not only q u a n t i t y but a l s o q u a l i t y as Uh does not g e n e r a l l y have secure water s u p p l i e s .

Improvement of roads was the f i r s t p r i o r i t y i n Sokehs and f o u r t h i n Uh. Community cooperation was perceived as the t h i r d p r i o r i t y i n Uh. Three households In Uh i n d i c a t e d that there was no need f o r a d d i t i o n a l community p r o j e c t s , w h i l e f i v e households had no response to the question.

What p r i o r i t y was given to e l e c t r i c i t y ? Only two households (out of 52) i n Sokehs included e l e c t r i c i t y as one of the three highest p r i o r i t y needs f o r t h e i r community. These households are e l e c t r i c i t y consumers. As the t a b l e shows, the study population perceived community needs to be other than e l e c t r i c i t y .

Regarding community p a r t i c i p a t i o n and input i n t o the planning process, one of the study enumerators, a l i f e l o n g r e s i d e n t of Uh, commented that h i s community had never had open community-wide d i s c u s s i o n s of i t s development needs. On the other hand, d i s c u s s i o n s have been held In Sokehs during recent years on i s s u e s such as a water-supply system.


T h i s p o i n t s toward a s i t u a t i o n where the d e c i s i o n to e l e c t r i f y i s by c e n t r a l government agencies, w i t h only l i m i t e d input by those who w i l l be u l t i m a t e l y a f f e c t e d .

The second p o l i c y question deals w i t h education on the use of e l e c t r i c i t y . Comments by the study population such as " i t ' s dangerous r e f l e c t l a c k of f a m i l i a r i t y w i t h e l e c t r i c i t y .

Table 6.1. P r i o r i t y community needs as perceived by study households (% of households)

1st p r i o r i t y 2nd p r i o r i t y 3rd p r i o r i t y T o t a l

Area and Wl t h W/ out Wi t h W/ out Wi th W/ out Wi t h W/ out p r i o r i t y needs e l e c t , e l e c t , e l e c t , e l e c t , e l e c t , e l e c t , e l e c t , e l e c t . T o t a l

Sokehs Road 47 67 25 0 17 0 34 32 33 S a n i t a t i o n 24 11 58 43 33 33 37 26 33 Water 18 22 8 43 50 33 20 32 24 E l e c t r i c i t y 12 0 0 0 0 0 6 0 4 Housing 0 0 8 14 0 0 3 5 4 Communication 0 0 0 0 0 33 0 5 2

T o t a l 101 100 99 100 100 100 100 100 100 Number 17 9 12 7 6 3 35 19 54

Uh Water 94 14 0 62 Housing 0 0 25 3 S a n i t a t i o n 6 14 0 7 Cooperation 0 29 25 10 Road 0 14 25 7 Education 0 14 0 3 Youth center 0 14 0 3 Reduce speeding 0 0 25 3

T o t a l 100 99 100 98 Number 18 7 4 29 No p r o j e c t s needed - no. 3 3

No response needed - no. 5 5

72 P a c i f i c I s l a n d s Development Program East-West Center

Table 6.1 (cont.)

1st p r i o r i t y 2nd p r i o r i t y 3rd p r i o r i t y T o t a l

Area and With W/out With W/out With W/out With W/out p r i o r i t y needs e l e c t , e l e c t , e l e c t , e l e c t , e l e c t , e l e c t , e l e c t , e l e c t . T o t a l

T o t a l Road 32 15 15 24 Water 50 19 31 37 S a n i t a t i o n 14 42 23 24 Cooperation 0 8 8 4 Housing 0 8 8 4 Education 0 4 0 1 E l e c t r i c i t y 5 0 0 2 Youth center 0 4 0 1 Communication 0 0 8 1 Reduce speeding 0 0 8 1

T o t a l 101 100 101 99 Number 44 26 13 83 No p r o j e c t s -needed no. 3 3

No response -needed no. 5 5

To date, the only de f a c t o education campaign has co n s i s t e d l a r g e l y of the "demonstration e f f e c t " : people f o l l o w i n g i n the fo o t s t e p s of those who have e l e c t r i c i t y . Those who have had e l e c t r i c i t y f o r longer periods of time are i n the higher income groups, often s e n i o r c i v i l servants or e x p a t r i a t e s i n government housing (which i n c l u d e s hot-water heaters, a i r c o n d i t i o n e r s , and e l e c t r i c s t o v e s ) . Is t h i s the des i r e d model? When someone i s given an u n f a m i l i a r t o o l or job, I t Is u s u a l l y accompanied by some t r a i n i n g . This has not occurred with e l e c t r i c i t y as the emphasis has been given to supply.

A t h i r d p o l i c y question concerns t a r i f f r a t e s . At present the population of the e n t i r e s t a t e i s s u b s i d i z i n g upper Income consumers w h i l e no more than 25 percent of the s t a t e ' s population have p h y s i c a l access to e l e c t r i c i t y and only 10 to 15 percent are a c t u a l consumers. The opport u n i t y costs to the development of economic resources (e.g., human and n a t u r a l ) and the p r o v i s i o n of p r i o r i t y s e r v i c e s (e.g., secure water and sewage) are high and w i l l i ncrease w i t h g r i d extension i f t a r i f f s are not r a i s e d s u b s t a n t i a l l y .

73


I f t a r i f f s are i n c r e a s e d , a subset of questions emerges concerning the e f f e c t s on various user groups. The commercial s e c t o r would presumably pass on t a r i f f increases to the shopper, which would l i m i t the purchasing power of lower Income groups, e s p e c i a l l y i n cash-poor r u r a l areas. Because s t o r e owners would have higher expenditures, they might have to l i m i t c r e d i t i n order to maintain s u f f i c i e n t cash f l o w s .

With respect to r e s i d e n t i a l consumers, the lower income groups could b e n e f i t from l i f e l i n e r a t e s . New low Income consumers could a l s o b e n e f i t i f b a s i c r e t i c u l a t i o n (hookup and w i r i n g ) c o s t s were recovered over a 12-month period r a t h e r than paid at one time. This would a l s o make e l e c t r i c i t y more a t t r a c t i v e than kerosene f o r l i g h t i n g as weekly cash expend i t u r e would be reduced. Without such measures to a s s i s t lower Income groups, i t might be d i f f i c u l t f o r them to become e l e c t r i c i t y consumers.

Fi g u r e 6.1 considers the impact of a t a r i f f r a t e of $0.248/kwh on unaccounted cash expenditure and d e f i c i t cash expenditure. Although the i n d i v i d u a l consumer could choose to d i v e r t expenditures from other items (e.g., food and entertainment), which i m p l i e s a l t e r e d expenditure p a t t e r n s , a c o n s i d e r a t i o n of the impact on unaccounted cash expenditure provides a gross i n d i c a t i o n of how much current patterns w i l l have to change. As the f i g u r e shows, the higher income groups have s u f f i c i e n t unaccounted cash so that current expenditure patterns would probably not be a f f e c t e d . The Middle income group would have i t s purchasing power s u b s t a n t i a l l y reduced, as would the Lower-Middle group. Given that the lower groups would have d e f i c i t expenditures, what adjustments would they make?

Se v e r a l options are a v a i l a b l e to the lower income groups i n c l u d i n g d i v e r t i n g funds from other expenditure items, reducing e l e c t r i c i t y use, and f i n d i n g a d d i t i o n a l sources of funds or c r e d i t . Although t h i s study has not been able to adequately i d e n t i f y t r a n s f e r s of cash, goods, and s e r v i c e s among income groups, i t could be assumed that a p o r t i o n of the higher Income groups' unaccounted cash expenditure Is t r a n s f e r r e d to r e l a t i v e s I n the lower income groups, e s p e c i a l l y to those i n r u r a l areas. I f t h i s assumption i s c o r r e c t and i f t a r i f f r a t e s are i n c r e a s e d , t h i s would mean that only the two higher Income groups would be able to continue to t r a n s f e r cash without a l t e r i n g current expenditure p a t t e r n s .

With respect to e q u i t y , i t would appear then t h a t , g iven the l i m i t e d cash resources of lower income groups, the l i f e l i n e r a t e s and recovery of b a s i c r e t i c u l a t i o n costs over a longer p e r i o d , say 12 months, are necessary. I f these (or s i m i l a r ) steps are not taken, those i n the lower income groups w i l l have to change t h e i r expenditure patterns and those i n the higher Income groups might a l s o have to change t h e i r s . These changes could a f f e c t t r a n s f e r s of cash. Although t h i s may seem to c o n t r a d i c t the statement that upper Income groups have s u f f i c i e n t funds so that t h e i r current expenditure patterns would not have to change to meet increased e l e c t r i c i t y c o s t s , i t i s not n e c e s s a r i l y a c o n t r a d i c t i o n because those i n the higher income groups may be asked to provide more cash to lower income

74


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income group.

r e l a t i v e s . In a d d i t i o n , i f p r i c e s f o r other items are a l s o increased (e.g., the shop owner passing on t a r i f f i n c r e a s e s ) , the combined e f f e c t ( i . e . , increased e l e c t r i c i t y costs plus higher r e t a i l costs) could f o r c e changes i n expenditure p a t t e r n s .

A f o u r t h p o l i c y question concerns whether or not e l e c t r i c i t y consumption patterns should be changed. The s t a t e has proposed s e v e r a l renewable energy p r o j e c t s that could s t a b i l i z e the cost of producing e l e c t r i c i t y , i n c l u d i n g the import b i l l f o r d i e s e l f u e l to generate power. With respect to reducing costs through co n s e r v a t i o n , there does not appear to be an implementation program to meet the o b j e c t i v e "to educate the general people of Pohnpei i n the wise use ... [of e l e c t r i c i t y ] " (OPS-FSM: 1981). The absence of an implementation program i s cause f o r concern because conservation measures could provide immediate and long-term savings that are as important as the renewable energy p r o j e c t s . Although t h i s cannot be q u a n t i f i e d at present, s e v e r a l observations can be s t a t e d :

. A number of households seem to leave l i g h t s on and appliances running without apparent reason.

. Only a few energy a u d i t s have been made of commercial and p u b l i c -s e c t o r consumers and t h e i r end uses of e l e c t r i c i t y . Thus data on which to base conservation p o l i c y are l i m i t e d .

. Present and proposed import t a r i f f s do not r e f l e c t consumption by e l e c t r i c a l a ppliances. Thus an appliance such as an e l e c t r i c stove, which can be both a high and an i n e f f i c i e n t user of e l e c t r i c i t y , n e g a t i v e l y a f f e c t s the trade imbalance through i t s i n i t i a l Import and through i t s added use and misuse of e l e c t r i c i t y . This can a l s o a f f e c t the i n d i v i d u a l household that may not be aware of the p o t e n t i a l savings made p o s s i b l e by energy e f f i c i e n t a p p l i a n c e s . To address t h i s problem, c o n s i d e r a t i o n should be given to d i f f e r e n t i a l t a r i f f s f o r v a r i o u s types of appliances based on mean consumption (e.g., one t a r i f f f o r e l e c t r i c stoves and another f o r r a d i o s ) , or t a r i f f s based on the energy e f f i c i e n c y of a p a r t i c u l a r a p p l i a n c e .

Any conservation program w i l l be dependent on r e a l i s t i c e l e c t r i c i t y t a r i f f s . A p u b l i c education campaign through the school system and on the ra d i o could a l s o f a c i l i t a t e c o n servation. The cost of Implementing a conservation program could be low and the p o t e n t i a l savings s u b s t a n t i a l . Unless such measures accompany g r i d extension, i t might be assumed that the c u r r e n t l y unproductive patterns of e l e c t r i c i t y use w i l l a l s o occur over a l a r g e r geographic area.

A f i n a l p o l i c y question i s who receives the e l e c t r i c i t y . Beyond the g r i d extension, I t Is not c l e a r what the p o l i c y i s on r u r a l e l e c t r i c i t y : Should the extension of g r i d around the main i s l a n d be continued? Should a l l households have access to the g r i d ? Should systems be e s t a b l i s h e d on the outer i s l a n d s ? To what end w i l l e l e c t r i c i t y be used?


As p r e v i o u s l y discussed, the study communities perceived p r i o r i t i e s h igher than that of e l e c t r i c i t y . However, the communities d i d i n d i c a t e that they l i k e d or wanted e l e c t r i c i t y . Thus d e c i s i o n makers have r e s ponded a f f i r m a t i v e l y to people's a s p i r a t i o n s even i f community input has been l i m i t e d . I t i s not c l e a r , however, what other development p r o j e c t s people would be w i l l i n g to give up i n order to obtain e l e c t r i c i t y ; nor i s i t c l e a r how they intend to use e l e c t r i c i t y .

I f , f o r i n s t a n c e , the p o l i c y I s to provide a l l Income groups w i t h access to the g r i d through l i f e l i n e t a r i f f s , then presumably the Intended end use would be p r i m a r i l y f o r household l i g h t i n g . S i m i l a r l y , I f economic development i s an intended o b j e c t i v e of r u r a l e l e c t r i f i c a t i o n , w i l l t a r i f f i n c e n t i v e s need to be offered?

With these types of questions unanswered, i t i s d i f f i c u l t to determine what the impact of e l e c t r i c i t y has been and w i l l be beyond the data that i n d i c a t e that higher Income groups consume more e l e c t r i c i t y . Under the current t a r i f f s t r u c t u r e , lower income groups bear t h i s cost because of the d i v e r s i o n of development funds.

The data a l s o suggest that those w i t h the means (e.g., cash Income and education) to use e l e c t r i c i t y do so. However, there does not appear to be a d i r e c t cause and e f f e c t between, say, e l e c t r i c i t y and higher l e v e l s of e d u c a t i o n a l achievement. Th i s statement i s s i m i l a r to the c o n c l u s i o n by the A s i a n Development Bank (ADB: October 1983) that cause and e f f e c t r e l a t i o n s h i p s are unclear and that attempts to r e l a t e , f o r example, r u r a l e l e c t r i f i c a t i o n to socioeconomic development have not been completely s u c c e s s f u l . In s h o r t , too many f a c t o r s are at play i n a dynamic s i t u a t i o n , and i t i s not p o s s i b l e to I s o l a t e them s u c c e s s f u l l y .

The statement that "those w i t h the means to use e l e c t r i c i t y do so" i s , i n one sense, s t a t i n g a t r u i s m . From another p e r s p e c t i v e , however, an i m p l i c i t statement i s being made that s t r a t i f i c a t i o n e x i s t s i n Pohnpei S t a t e , that i s , some people do not have s u f f i c i e n t Income. I t appears that l e v e l s of e l e c t r i c i t y consumption r e f l e c t access to cash-earning o p p o r t u n i t i e s and consumption l e v e l s of consumer Items, few of which are used to increase economic production or the q u a l i t y of l i f e (although t h i s i s arguable, e.g., an e l e c t r i c stove could make l i f e " e a s i e r " ) . E l e c t r i c i t y may not be the cause, but i t s low cost f a c i l i t a t e s purchase of consumer goods by upper income groups.

S t r a t i f i c a t i o n on the basis of consumption l e v e l s could w e l l be exacerbated without, f o r example, Increased e l e c t r i c i t y t a r i f f s and higher d u t i e s or imported n o n e s s e n t i a l goods. However, I t a l s o seems that p o l i c i e s to Improve l i f e f o r lower income groups i n the r u r a l areas are necessary and should i n c l u d e e l e c t r i c i t y w i t h respect to s p e c i f i c end uses such as l i g h t i n g . Policymakers have to weigh the consumption by upper income groups against the improvement of the q u a l i t y of l i f e f o r the m a j o r i t y of the population of Pohnpei State.

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Appendix A: THE ECONOMY

Pohnpei's and the FSM's economy can best be described as being dominated by p u b l i c - s e c t o r wage and s a l a r y employment, by the import and d i s t r i b u t i o n of consumer items ( i n c l u d i n g food), and by unknown s u b s i s tence production. Thus the economy could be termed " d u a l i s t i c " or " f a l s e . " The f a l s e nature of the economy i s r e f l e c t e d by the f a c t that almost no l o c a l production e x i s t s , except f o r the u n q u a n t i f i e d subsistence s e c t o r . I t i s a l s o Indicated by the comment made by Nevin (1977, as c i t e d i n C o n n e l l , 1983): "One of the l e a s t developed nations on e a r t h has been encouraged to see i t s e l f i n terms of the r i c h e s t , most h i g h l y developed on e a r t h . . . . This u n r e a l i t y ... i s at the heart of the M i c r o n e s i a dilemma."

In most developing P a c i f i c I s l a n d n a t i o n s , I t i s p o s s i b l e to conduct both d e s c r i p t i v e and c r i t i c a l analyses of a nation's economy on the basis of data that have been generated by, f o r the most p a r t , l o c a l I n i t i a t i v e s or a s s i s t a n c e from i n t e r n a t i o n a l agencies such as the A s i a n Development Bank, the I n t e r n a t i o n a l Monetary Fund, and the South P a c i f i c Commission. T h i s i s not the case w i t h the FSM and Pohnpei S t a t e . Data on the value and q u a n t i t y of s e c t o r a l production and i n f l a t i o n , f o r example, are not a v a i l a b l e ; moreover, complementary analyses of such things as the impact of the U.S. i n f l a t i o n rates have not been conducted. In other words, the " f a l s e " and " u n r e a l " notions mentioned above are f a c i l i t a t e d and exacerbated by the l a c k of a database that Is common to other I n d u s t r i a l i z e d and developing n a t i o n s . The reason f o r the l a c k of data Is moot. What Is s i g n i f i c a n t i s that an emerging independent n a t i o n has to make major d e c i s i o n s on economic p o l i c y and the a l l o c a t i o n of l i m i t e d resources and to chart I t s development " b l i n d " to i t s past successes and f a i l u r e s , I t s strengths and weaknesses, and i t s o p p o r t u n i t i e s . The absence of data should be considered as one of the c r i t i c a l economic issues of a nation's f i r s t decade.*

The Monetized Sector

Table A . l estimates the value of monetary Income In Pohnpei f o r 1980 on the b a s i s of the best a v a i l a b l e data. As the t a b l e demonstrates, wages and s a l a r i e s , l a r g e l y financed through U.S. s u b s i d i e s and grants, are the major source of monetary income. Although wage and s a l a r y Income are concentrated i n a m i n o r i t y of the population (urban), remittances

*Barry Shaw's "Smallness, Islandness, Remoteness and Resources" i n Regional Development In Small I s l a n d Nations (UNCRD: 1982) discusses the advantage that Small I s l a n d Nations (SINs) have In developing s t a t i s t i c a l bases and making d e c i s i o n s because of t h e i r smallness. Shaw a l s o p o i n t s out that I t i s c r u c i a l f o r SINs to have adequate databases I f they are to be able to respond q u i c k l y to s i t u a t i o n s that could be d e s t a b i l i z i n g or could increase t h e i r v u l n e r a b i l i t y .


and exchanges w i t h non-money-earning f a m i l y members ( r u r a l ) could be cons i d e r a b l e . Wage and s a l a r y rates are high i n the U.S.-financed p u b l i c s e c t o r and could be dampening the development of a p r i v a t e sector as s k i l l e d personnel seek p u b l i c s e c t o r employment ( f o r higher wages). T h i s deprives the p r i v a t e s e c t o r of an e s s e n t i a l resource, a s k i l l e d work f o r c e .

Table A . l . Money income: 1980 (US$)

Source Amount T o t a l

Wages and s a l a r i e s Micronesian E x p a t r i a t e 3

11,581,171 1,053,448

12,634,619

Business p r o f i t s * * 1,153,984

Exports (f.o.b.) Copra Coconut manufacturers H a n d i c r a f t s 0

Pepper Trochus s h e l l

469,223 111,755 239,873 10,790

- no season -

831,641

L o c a l a g r i c u l t u r a l production** 85,163

T o t a l 14,705,400

Sources: OPS-Pohnpei: 1983. D r a f t . Pohnpei State Development Pla n ; Pohnpei State S t a t i s t i c s O f f i c e : 1982. 1981 Pohnpei State S t a t i s t i c s Yearbook. Author's estimates.

Notes: Some e f f o r t was given to developing an accounts summary (e.g., Gross Domestic Expenditure or Gross Domestic Product) without success due to the l a c k of data or, i n s e v e r a l i n s t a n c e s , p o s s i b l e i n a c c u r a c i e s .

a. E x p a t r i a t e s earned $2,106,896.00 i n 1980, spending an estimated 50% of income i n Pohnpei.

b. Business p r o f i t s based on an estimated 15.2% of Gross Business Revenue being r e t a i n e d w i t h i n Pohnpei.

c. No assessment i s p o s s i b l e of sa l e s of h a n d i c r a f t s l o c a l l y , i n c l u d i n g l o c a l purchase by t o u r i s t s .

d. Value of l o c a l l y produced vegetables and f r u i t s paid to producers f o r items to be s o l d i n K o l o n i a .

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L o c a l a g r i c u l t u r a l production i s considerably higher than shown i n the t a b l e because the value of purchase by r e t a i l e r s outside of K o l o n i a i s not Included. Also not recorded are the l o c a l s a l e s of f r e s h f i s h and other marine and f o r e s t r y products- To some extent, these f a c t o r s have been compensated f o r by the "Business p r o f i t s " category. As the t a b l e i n d i c a t e s , the value and range of exports from Pohnpei are l i m i t e d . Aside from h a n d i c r a f t s and coconut manufactures such as soap ($99,438.00 i n 1980; OPS-Pohnpei: 1983), forward processing i s n e g l i g i b l e . Of note, however, i s that the s o - c a l l e d " v i l l a g e economy" i s the source f o r almost a l l of the value of export production. Thus, a s i t u a t i o n e x i s t s whereby the r e l a t i v e l y low-paid and low-import consuming " v i l l a g e economy" produces f o r export, whereas the high-paid and high-import consuming wage and s a l a r y ( l a r g e l y p u b l i c ) s e c t o r produces nothing f o r export. This i s a major equity issue as a large p o r t i o n (wages and s a l a r i e s ) of the p u b l i c s e c t o r ' s expenditure i s i n d i r e c t l y a l l o c a t e d to nonproductive import consumption causing a high opportunity cost to the productive s e c t o r s . In t h i s v e i n , the Western Samoan economist Ian F a i r b a i r n (1982) discusses both the c o n t i n u i n g s t r e n g t h of the r u r a l s e c t o r ( " v i l l a g e economy") i n P a c i f i c nations and i t s neglect by urban-biased planners. He s p e c i f i c a l l y notes that i n Guam, New Caledonia, and American Samoa, a l l under the c o n t r o l of I n d u s t r i a l i z e d n a t i o n s , " r u r a l neglect i s conspicuous." The FSM economy should be considered from that p e r s p e c t i v e .

The " V i l l a g e " Economy

Table A.2 describes data taken from what i s commonly r e f e r r e d to as the Ag Census 1978-1979 (1981). Although these are the o n l y , and hence best, data a v a i l a b l e on r u r a l p r oduction, they must be used w i t h considerable c a u t i o n f o r the f o l l o w i n g reasons:

. The survey estimated that there were 1,905 r u r a l households i n the State of Pohnpei.

• The survey attempted to Include 140 households (approximately 7.5 percent of the t o t a l ) .

. The survey of 120 households (roughly 6.5 percent of the t o t a l ) was considered to be more than adequate.

• In the end, the survey included a t o t a l of only 14 households ( l e s s than 0.7 percent).

. Comprehensive Income and expenditure data were obtained from only s i x households.

Thus the f i g u r e s f o r the e n t i r e s t a t e have been ext r a p o l a t e d on the b a s i s of a l e s s than s a t i s f a c t o r y sample s i z e .

However, the f i g u r e s are probably I n d i c a t i v e of the r o l e of the " v i l l a g e , " " t r a d i t i o n a l , " "subsistence," and " r u r a l " economy. As shown

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Table A.2. Value of consumption of the t r a d i t i o n a l - s e c t o r State of Pohnpei: 1980

T o t a l Per household Per person Item ($) % (5) (?)

Own-produced goods 7,542,312 62.4 3,686 438 Purchased goods 4,104,216 34.0 2,006 238 Other and USDA 435,768 3.6 213 25

T o t a l 12,082,296 100.0 5,905 701

Source: Ag Census 1978-1979: 1981. OPS-TTPI.

Notes: " T r a d i t i o n a l s e c t o r " and " v i l l a g e economy" are used interchangeably. USDA = United States Department of A g r i c u l t u r e .

i n Table A.3, the Ag Census gave the f o l l o w i n g values to nonmarketed production by r u r a l households:

The production of nonmarketed goods probably leads to s i g n i f i c a n t exchanges between r u r a l f a m i l i e s and wage and s a l a r y earners. Data are not a v a i l a b l e , but i t could be assumed (see chapters 4 and 5 f o r d i s c u s sions on t r a n s f e r s ) that cash Inflows are considerable from those employed In the monetized s e c t o r to r u r a l areas, as w e l l as the outflow of non-marketed products to the monetized urban area. This r e l a t i o n s h i p benef i t s both secto r s as wages and s a l a r i e s are augmented by l o c a l l y produced goods, e s p e c i a l l y food Items; In a d d i t i o n , people In r u r a l areas have increased purchasing power.

Imports Rather Than Trade

The value of t o t a l and s e l e c t e d commodity imports i n t o Pohnpei are shown i n Tables A.4 and A.5, r e s p e c t i v e l y . As expected of a non-petroleum-producing n a t i o n , m ineral f u e l s (31.2 percent i n 1982) c o n s t i tute the l a r g e s t s i n g l e import group (SITC s e c t i o n ) .

The percentage share of food i n the import b i l l (26.2 percent In 1982) when compared to other P a c i f i c nations such as F i j i (14 percent i n 1981; CES: October 1982) and the Solomon I s l a n d s (10.7 percent i n 1981; ADB: A p r i l 1983) r e f l e c t s the low l e v e l s of l o c a l production r e f e r r e d to above. Table A.5 shows the r o l e of s e l e c t e d commodities i n the Food SITC s e c t i o n , e s p e c i a l l y f o r m i l l e d r i c e . Frozen and canned p r o t e i n items are a l s o major commodities f o r which, to an extent, l o c a l products could be s u b s t i t u t e d . Beverages and tobacco (SITC s e c t i o n 1) a l s o c o n s t i t u t e a

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Table A.3. Value of nonmarketed p r o d u c t i o n — r u r a l households: 1978-79

Source Amount

A g r i c u l t u r e F i s h i n g

3,649,000 3,818,000

Quarrying F o r e s t r y Imputed net rent

C o n s t r u c t i o n lab o r

F u e l gathering Boat b u i l d i n g

L i v e s t o c k 178,000 128,000 68,000

167,000 72,000 36,000

739,000

T o t a l 8,775,000

Source: Ag Census 1978-1979: 1981. OPS-TTPI.

higher share of Imports i n t o Pohnpei (9.8 percent i n 1982) than i n other P a c i f i c n a t i o n s such as the Cook I s l a n d s (5.7 percent In 1981; ADB: A p r i l 1983) and Tonga (5.6 percent In 1981; ADB: A p r i l 1983).

Machinery and v e h i c l e s (SITC s e c t i o n 7) are s i g n i f i c a n t to the import b i l l from the perspective not only of t o t a l value or percentage share but a l s o In terms of the c l i m a t i c and road c o n d i t i o n s and maintenance schedules that l e a d to a l i f e span of from 18 to 24 months f o r government v e h i c l e s and approximately 50 percent longer f o r those In the p r i v a t e s e c t o r . Despite an annual average Increase of 6.7 percent (1978 to 1980) i n the number of v e h i c l e r e g i s t r a t i o n s (Pohnpei State S t a t i s t i c s O f f i c e : 1982), the number of v e h i c l e s per c a p i t a has d e c l i n e d (from 22.9 to 21.6 per thousand). Thus the increased import expenditures on v e h i c l e s are not n e c e s s a r i l y a i d i n g the development of road t r a n s p o r t , which I s a n e c e s s i t y f o r r u r a l development and resource u t i l i z a t i o n .

The o r i g i n of imports i s given i n Table A.6. As to be expected, the United States ( w i t h i t s possessions) i s the major source, followed by Japan, the P h i l i p p i n e s , and A u s t r a l i a . Japan i s a l s o the d e s t i n a t i o n f o r 97 percent of l o c a l exports (Pohnpei State S t a t i s t i c s O f f i c e : 1982).

F i n a l l y , i t should be noted that r e c e i p t s from abroad t o t a l e d $13.2 m i l l i o n i n f i s c a l year (FY) 1980 (OPS-Pohnpei: 1983). With imports approximating $14.7 m i l l i o n , the balance of payments shows a

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Table A.4. Commercial and state government Imports Into Pohnpei: 1982

Commodity section SITC 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr 1982

Food 0 836,592 1,178,740 1,308,824 907,927 4,232,083

Beverages and tobacco 1 316,586 418,888 461,755 385,823 1,583,052

Crude materials 2 37,288 79,475 6,382 31,646 154,791

Mineral fuels 3 N.A. N.A. N.A. N.A. 5,048,026*

Animal and vegetable fats 4 544 - 839 1,527 2,910

Chemicals 5 68,734 185,401 177,439 191,501 623,075

Manufactured goods 6 187,729 377,292 349,629 377,015 1,291,665

Machinery and transport equipment 7 367,807 323,068 446,430 783,883 1,921,188

Miscellaneous manufactures 8 270,146 309,246 290,912 434,303 1,304,607

Commodities 9 2,455 5,251 - 22 7,728

Total without mineral fuels 2,087,881 2,887,361 3,042,210 3,113,647 11,121,099

Total with mineral fuels N.A. N.A. N.A. N.A. 16,169,125

Sources: Pohnpei State S t a t i s t i c s O f f i c e , FSM D i v i s i o n of Revenue; FSM Olv l s l o n of S t a t i s t i c s .

Notes: These values are derived form prices paid In port of shipment (f.o.b.).

CIF figures are unavailable; gross estimate by FSM-OPS Is CIF 20 percent higher than f.o.b.

a. ° Estimate for government purchases of mineral fuels has been added to commercial purchases.

Table A.5. Imports of selected commodities Into the State of Pohnpei (US$>

Commodlty SITC 1982 1979 1977

Frozen chicken 011.40 439,776 114,467(7) 206,853

Frozen beef 011.75 185,404 98.602 68,716

Canned meat 014.90 396,030 309,549 232,610

Canned f i s h 037.10 387,263 378,718 342,981

H i l l e d r i c e 042.20 892,032 449,446(7) 542,981

Wheat f l o u r 046.01 238,132 113,277(7) 132,184

H i l l e d sugar 061.20 119,646 45,647(7) 103,445

Sweets 062.10 224,601 90,616(7) 127,115

Soft drinks 111.02 225,105 454,884(7) 154,169

Beer 112.30 726,194 473,758 180,742

Cigarettes 122.20 602,540 240,364(7) 315,238

Lumber 248.21 74,675 16,787 11.427

Plywood 634.50 101,787 197,248 118,715

Cement 661.20 115,724 41,081 53,776

Outboard engines 713.31 96,247 119,897 82,990

Hotor vehicles 781.00 990.551(10) 720,698 535,774

Motor vehicle parts 784.00 83,708(1) 123,255 17,766

Footwear 851.00 233,045 75,339 74,362

Toys 894.55 132,473 35.063 37,548

Sources: OPS-FSM: 1983; OPS-TTPI: March 1979.

Notes: Only two of the commodities l i s t e d above—motor vehicles and motor vehicle parts—were Imported by the state government In 1982. The percentage share of the government Is shown In parentheses.

These figures do not Include tax-exempt Imports under foreign a i d programs.

Question mark Indicates questionable data as designated by the FSM.

Figures are f.o.b.; for CIF, Increase value by an estimated 20%.

Figures may not agree with the preceding table; however, those In this table are the most recent.

Table A.6. Summary of commercial Imports Into Pohnpei State by SITC and country or area of o r i g i n : 1977 {% Indicates the o r i g i n of commercial Imports from each country or area)

SITC Description

Pohnpei Imports

U ) U.S.

mainland Guam*

Country or area of o r i g i n of Imports [%)

Hawaii A u s t r a l i a Japan Philippines Others

CD a*

to Oi a o rt p. I Hi C H* fD O CD rt M CD O M fD CD d cj rt a.

(0 CD o fD < fD >-* O

ft D

o TO

0 Food

1 Beverages and tobacco

2 Crude materials

3 Petroleum products

4 Animal and vegetable

fats

5 Chemicals

6 Manufactured goods 7 Machinery and

vehlcles 8 Miscellaneous

manufactures

9 Items n.e.c.

Pohnpei

Imports (%)

100

100

100

100

100

100

100

100

100

100

100

33

35

71

74

54

21

10

17

100

23

59

15

6

13

25

13

25

15

26

1

Source: Pohnpei State S t a t i s t i c s O f f i c e : 1982.

Mote: a. Includes re-exports f o r Items Imported from U.S. mainland and Japan.

29

4

9

15

25

41

73

37

31

100

15

$1.5 m i l l i o n d e f i c i t . However, only $831,000 of the $13.2 m i l l i o n was generated by l o c a l exports, the remainder being o f f s e t by i n f l o w s of a i d .

P u b l i c Finance

P u b l i c expenditures, (not i n c l u d i n g c e r t a i n U.S. f e d e r a l programs and p r o j e c t s f o r f i s c a l year (October) 1980, t o t a l e d $11,905,200 (0PS-Pohnpei: 1983), of which 22.9 percent went to education, 20.3 percent to h e a l t h , and 28.9 percent to community s e r v i c e s such as water and e l e c t r i c i t y . Wages and s a l a r i e s accounted f o r 61 percent of the t o t a l p u b l i c expenditure.

During the period 1972 to 1980, the s t a t e government spent $31.5 m i l l i o n on c a p i t a l p r o j e c t s (Pohnpei State S t a t i s t i c s O f f i c e : 1982). Major p r o j e c t s included paving roads i n the K o l o n i a area ($11.3 m i l l i o n ) ; extension and upgrading of the a i r f i e l d ($4.1 m i l l i o n ) i n K o l o n i a ; s a n i t a t i o n i n K o l o n i a ($4.8 m i l l i o n ) ; e l e c t r i f i c a t i o n i n northern Pohnpei, p r i n c i p a l l y K o l o n i a ($3.6 m i l l i o n ) ; and the extension and upgrading of K o l o n i a * s port f a c i l i t i e s ($1.7 m i l l i o n ) . Thus, during the p e r i o d 1972-80, more than 81 percent of c a p i t a l expenditures were concentrated i n the K o l o n i a area, where roughly 25 percent of the s t a t e ' s population l i v e s . These expenditures have been deemed necessary and may y i e l d s i g n i f i c a n t r e turns i n the f u t u r e . Yet f u t u r e returns remain d i s t a n t as s o c i a l and i n f r a s t r u c t u r e development p r o j e c t s tend to have long, and perhaps u n c e r t a i n , g e s t a t i o n periods and the r u r a l and productive s e c t o r s have been neglected.

Of the $11.9 m i l l i o n expenditure i n FY 1980, 20.8 percent ( a p p r o x i mately $2.57 m i l l i o n ) of the t o t a l came from l o c a l revenue sources (OPS-FSM: 1982). Sources f o r l o c a l revenue i n c l u d e the business gross revenue tax , 41.4 percent or $1.02 m i l l i o n ; personal income taxes, 32.1 percent or $0.79 m i l l i o n ; import taxes, 23.2 percent; f u e l excise taxes, 1.9 percent; and nontax revenues, 1.4 percent.

With the Compact of Free A s s o c i a t i o n w i t h the United S t a t e s , Pohnpei State w i l l have $6.8 m i l l i o n per year to spend on c a p i t a l p r o j e c t s f o r the f i r s t f i v e - y e a r period of the compact (OPS-Pohnpei: 1983). A c o n s i d e r a b l e p r o p o r t i o n of expenditures during t h i s period i s scheduled to develop productive s e c t o r s , i n c l u d i n g those i n r u r a l areas. Other expend i t u r e s are scheduled to improve the q u a l i t y of l i f e i n r u r a l areas. Thus the "neglect" mentioned above could be r e c t i f i e d . However, any a m e l i o r a t i o n of the s i t u a t i o n w i l l occur i n the context of (1) r u r a l -urban d i s p a r i t i e s , i n c l u d i n g wage r a t e s ; (2) an " I d e a l i z e d " urban sector that has a propensity to import and consume; and (3) the remnants of the c o l o n i a l p e r i o d : an a d m i n i s t r a t i v e i n f r a s t r u c t u r e and p h y s i c a l p l a n t (e.g., h o s p i t a l and roads) that are inadequate and use Imported systems from I n d u s t r i a l i z e d n a t i o n s . For example, rec u r r e n t expenditures f o r wages and s a l a r i e s , the operating costs of the h o s p i t a l , and maintenance costs of the e l e c t r i c i t y power pla n t w i l l probably be higher than estimated, thus f o r c i n g r e a l l o c a t i o n of resources.

87


The Development of an Economy

Any summation of the preceding would tend toward the p e s s i m i s t i c , s t a r t i n g w i t h the d i s c u s s i o n of a " f a l s e " economy, c o n t i n u i n g w i t h the absence of a data base to serve as a " y a r d s t i c k " f o r d e c i s i o n making, and having the f o l l o w i n g s t r u c t u r a l c h a r a c t e r i s t i c s :

. The nondevelopmental use of t r a d e — t h a t i s , the bulk of imports (value) i s f o r nonproductive (consumption) purposes.

. Imports could a i d i n the development of I n f r a s t r u c t u r e , s e r v i c e s , and production and could maintain r a t h e r than i n c r e a s e e x i s t i n g l e v e l s of development.

• Imports (value) are nearly equal to guesstlmated Gross Domestic Expenditure and c e r t a i n l y w e l l In excess of the value of l o c a l production; thus the economy i s one of the most open In the world.

• Gross Domestic Expenditure i s almost e n t i r e l y financed by f o r e i g n grants and s u b s i d i e s ; hence the (money) economy i s one of the most dependent In the world.

. With imports exceeding exports (value) by a r a t i o of n e a r l y 20:1, the balance of trade i s among the world's worst.

Yet the people of Pohnpei (and the FSM) are not p e s s i m i s t i c ; r a t h e r , they are l o o k i n g forward to being able to decide t h e i r f u t u r e . The proposal to s h i f t expenditure a l l o c a t i o n s to the productive s e c t o r s and r u r a l areas i s a p o s i t i v e common-sense measure and one that should have occurred years ago. The development of a database ( i n c l u d i n g n a t u r a l resources) i s p r e s e n t l y under way. In a d d i t i o n , contacts and cooperation are i n c r e a s i n g w i t h other P a c i f i c nations that can provide v a l u a b l e experience i n development of p o l i c i e s and p r o j e c t s .

However, these and other p o s i t i v e a c t i o n s , such as the tax agreement whereby FSM c i t i z e n s working i n the United States pay FSM taxes and the Compact revenue ($755 m i l l i o n over 15 y e a r s ) , do not guarantee development by any d e f i n i t i o n . The r e a l i t y of the economies of Pohnpei, the FSM, and the other former T r u s t T e r r i t o r i e s i s that they are beginning from a disadvantaged p o s i t i o n , coping not only w i t h development but a l s o w i t h a t r a g i c c o l o n i a l past.

88


Appendix B: POPULATION

Table B . l shows population f i g u r e s f o r the period 1973-80. The AAGRs f o r the FSM (2.36 percent) and Pohnpei State (2.55 percent) f o r t h i s period are somewhat s i m i l a r to those f o r the period 1948-70: 2.70 and 2.45 percent f o r the FSM and Pohnpei S t a t e , r e s p e c t i v e l y . These f i g u r e s would tend to I n d i c a t e a s t a b i l i z i n g or s l i g h t l y d e c l i n i n g (FSM) or i n c r e a s i n g (Pohnpei) growth r a t e ; however, t h i s i s not the case.

P o p u l a t i o n p r o j e c t i o n s (on the basis of the 1973 Population Census: see Tables B.2 and B.3), which employed the cohort component method, I n d i c a t e i n c r e a s i n g growth rates e s p e c i a l l y In c e r t a i n age groups (Table B.2). S p e c i f i c a l l y , the p r o j e c t i o n s show more young a d u l t s , who w i l l undoubtedly have f a m i l i e s , and more people who are 65 years of age or o l d e r , presumably because of Increased l i f e expectancy. Hence, Pohnpei State's p o p u l a t i o n has been.projected to have a 3.18 percent AAGR f o r the period 1973- 88. Given the age "bulges" and t h e i r causes and e f f e c t s (noted above), i t i s q u i t e p o s s i b l e that t h i s growth trend could continue i n t o the next century.

Table B . l shows that K o l o n i a , the c a p i t a l , has had a lower AAGR than Pohnpei as a whole during the 1973-80 p e r i o d . This i m p l i e s e i t h e r that most of the s t a t e ' s growth has occurred i n r u r a l areas other than those shown or that K o l o n i a has p h y s i c a l l y spread i n t o areas formerly c l a s s i f i e d as r u r a l ; the l a t t e r i s more l i k e l y . * Thus, a key Issue I s whether proj e c t e d p o p u l a t i o n growth w i l l occur more evenly, and thus In r u r a l areas, or be concentrated I n the c a p i t a l . According t o the p r o j e c t i o n s (Table B.3), growth w i l l be concentrated i n K o l o n i a : (3.47 percent AAGR 1973-88 versus 3.03 percent f o r the s t a t e ) and i t s environs ( i . e . , Nett M u n i c i p a l i t y ) . A major determinant of whether the p r o j e c t i o n s w i l l be r e a l i z e d w i l l be the a v a i l a b i l i t y of employment and s e r v i c e s i n the c a p i t a l . E v i dence from other P a c i f i c i s l a n d nations suggests that u r b a n i z a t i o n w i l l occur and that as a r e s u l t the a l l o c a t i o n of scarce resources w i l l be concentrated In the c a p i t a l , thus p o s s i b l y f u r t h e r i n g concentration v i a m i g r a t i o n . Other major demographic c o n s i d e r a t i o n s are

. Male:Female R a t i o (Table B.2) Although Imbalances f o r c e r t a i n age groups have decreased, Pohnpei State's population i s i n c r e a s i n g f a s t e r f o r males than i t i s f o r females, thus r a i s i n g questions on male emigration and p o s s i b l y m a r i t a l and f a m i l y s t r u c t u r e and p r a c t i c e s .

*See C o n n e l l (1983) f o r a more d e t a i l e d a n a l y s i s of u r b a n i z a t i o n on Pohnpei.


Table B . l . Population growth 1973-80: Federated States of Micronesia, Pohnpei State, and select areas on Pohnpei Island

1973 Population Census 1977 S k i l l and occupation survey 1980 Population Census 4

Area No. of households

Population No. of households

Population No. of households

Population 6 AAGR(l) 1973-80

Area No. of households M F T

No. of households M F T

No. of households

Population 6 AAGR(l) 1973-80

Federated States of Micronesia t o t a l 8,743 32,128 30,603 62,371 8,981 37,086 34,881 71,967 10,665 73,444 2.36

Pohnpei State t o t a l 3,654 9,906 9,352 19,258 2,795 11,807 10,717 22,524 3,302 22,968 2.55

Kolonia (Capital) 674 2,413 2,382 4,795 781 3,131 2.878 6.009 813 5,550 2.11

Sokehs Municipality t o t a l 418 1,661' 1,555 3,216 435 1,889 1,727 3,616 524 3,663 1.88

Sokehs Enumeration D i s t r i c t 52 88 348 328 676 Not av a i l a b l e 104 756 1.61

Uh Municipality t o t a l 228 922 915 1,837 207 813 822 1.635 261 1.869 0.25

Uh Enumeration O i s t r i c t 19 31 170 141 311 Not av a i l a b l e 57 551 8.51

Sources: 1973 Population Census; 1980 Population Census preliminary data: 1981; 1981 FSM National Yearbook of S t a t i s t i c s : 1982; 1981 Pohnpei State S t a t i s t i c s Yearbook: 1982.

Notes: M * male; F ° female; T » t o t a l .

a. There has been some question of accuracy f o r the 1980 Population Census. Some government personnel believe there has been underenumeratlon In c e r t a i n d i s t r i c t s , whereas i n others, there might have been double-counting of c e r t a i n households.

b. Preliminary data for the 1980 Population Census do not disaggregate by sex or age* groups.

Table B.2. Pohnpei State and o f f i c i a l population estimates by age group and sex: 1973-80

1973 1980 AAGR (%)

Age group No. Hale:female r a t i o No. Male:female r a t i o 1973-80

0-14 Male 4,670 1.12 5,270 1.05 1.74 Female 4.180 1.00 5,030 1.00 2.68

Total 8,850 10.300 2.17

15-64 Male 4,720 0.98 6,270 1.05 4.14 Female 4.810 1.00 5,990 1.00 3.18

Total 9,530 12,260 3.65

65+ Male 330 1.06 460 1.00 4.86 Female 310 1.00 460 1.00 5.80

Total 640 920 5.32

Total Male 9,720 1.04 12,000 1.05 3.06 Female 9,310 1.00 11,480 1.00 3.04 Total 19,030 23,480 3.05

Source: TTPI Population Projections: 1973-2003 (based on 1973 Census) as given 1n Pohnpei State S t a t i s t i c s O f f i c e : 1982.

Notes: The 1980 figures d i f f e r from those of the 1980 Population Census because the 1980 Census figures have not yet been accepted.

Figures may not sum because of rounding (as given In 1981 Yearbook).

Population projections are rounded to nearest ten.

91


Table B.3. Pohnpei State o f f i c i a l population projections: 1973-88 (mid-year)

Area 1973 1983 AAGR: 1973-83 it) 1988 AAGR: 1973-88 (I)

Pohnpei Island (excluding Kolonia) 12,460

Kolonia 4,800

Outer Islands 2,000

Pohnpei State t o t a l 19,260

FSM (Including Pohnpei State) 62,731

16,350

6,740

2,620

25,710

85.285

2.75

3.45

2.74

3.04

3.12

19,490

8.010

3,080

30,820

101.155

3.03

3.47

2.92

3.18

3.28

Source: TTPI Population Projections: 1973-2003 (based on 1973 Census) as given In 1981 Pohnpei State S t a t i s t i c s O f f i c e : 1982 and 1981 OPS-FSM: 1982.

Notes: Population projections are rounded to nearest ten.

Figures may not sum because of rounding and because some people In the 1973 Population Census did not Identify with a s p e c i f i c area.

. Crude B i r t h Rate The reported Crude B i r t h Rate (per 1,000) was estimated to be 35.6 i n 1973 and 40-3 In 1980 f o r Pohnpei S t a t e ; and 31.5 and 33.5 f o r the FSM i n 1973 and 1980, r e s p e c t i v e l y . These rates imply support f o r the above argument that population growth ra t e s are i n c r e a s i n g and that they could remain high f o r a number of years.

. Crude Death Rate The reported Crude Death Rate (per 1,000) f o r both the FSM and Pohnpei State has approximated 4.0 and 5.0 f o r the period 1973-80.

. Infant M o r t a l i t y Rate The reported I n f a n t M o r t a l i t y Rate ( i n f a n t deaths per 1,000 l i v e b i r t h s ) f o r Pohnpei State was 28.2 i n 1973 and 26.4 i n 1980; f o r the FSM, i t was 24.3 i n 1973 and 37.9 i n 1980.

In summation, i f the preceding data are c o r r e c t , the 1983 population f o r both the FSM and Pohnpei S t a t e w i l l double In roughly 22 years and K o l o n i a 1 s w i l l double i n s l i g h t l y more than 20 years. Although I t could be argued that the I s l a n d of Pohnpei can accommodate the pro j e c t e d growth at c u rrent w e l f a r e l e v e l s ( q u a l i t y of l i f e or standard of l i v i n g ) In the near term, some question could be r a i s e d regarding I t s a b i l i t y to s u s t a i n a s s i m i l a t i o n over a longer p e r i o d . An even more immediate p o l i c y question concerns the demands and expectations of the growing po p u l a t i o n ; how they w i l l be met and where: i n K o l o n i a w i t h i t s urban consumption p a t t e r n s , i n the r u r a l areas, or through emigration?

93


Appendix C: THE LABOR FORCE

The s i z e of Pohnpei's labor force r e f l e c t s both population f i g u r e s when aggregated at the s t a t e l e v e l (Pohnpei State has roughly 32 percent of the n a t i o n a l t o t a l s f o r population and the l a b o r force) and the c o n c e n t r a t i o n of wage and s a l a r y earners i n and around the s t a t e c a p i t a l . T h i s suggests that a vast m a j o r i t y of the more than 3,800 wage and s a l a r y earners (1979: 32.6 percent of the t o t a l l a b o r f o r c e ) work i n the K o l o n i a area. T h i s concentration a l s o r e f l e c t s the p u b l i c s e c t o r ' s dominate r o l e i n wage and s a l a r y employment (see Table C I ) : roughly 60 percent of wage and s a l a r y earners are employed by the p u b l i c s e c t o r In Pohnpei and Truk S t a t e s , r i s i n g to 65 percent and over i n l e s s populous Kosrae and Yap S t a t e s .

P r i v a t e - s e c t o r wage and s a l a r y employment Is concentrated i n wholesaling and r e t a i l i n g , t r a n s p o r t a t i o n and d i s t r i b u t i o n . Pohnpei a l s o has considerable employment i n c o n s t r u c t i o n and p r i v a t e schools (which, to some, may not be considered a " t r u e " p r i v a t e - s e c t o r a c t i v i t y , but r a t h e r a nongovernmental p u b l i c - s e c t o r or n o n p r o f i t c l a s s i f i c a t i o n ) . However, a major p r i v a t e - s e c t o r a c t i v i t y i n terms of the t o t a l numbers of people earning wages and s a l a r i e s i s " U n c l a s s i f i e d and Unknown."

Data c o n s t r a i n t s are shown more c l e a r l y i n Table C.2, which I s based on the 1973 P o p u l a t i o n Census, o f f i c i a l p o p u lation p r o j e c t i o n s using the 1973 Census, a 1982 employment development proposal that u t i l i z e d 1979 data (Pham: 1982), and the author's estimates. As the t a b l e i n d i c a t e s , wage and s a l a r y employment Increased a t an estimated AAGR of s l i g h t l y more than 9 percent during the period 1973-79. Although the r a t e has probably f a l l e n s l i g h t l y , t h i s increase suggests a major enlargement of the p u b l i c s e c t o r . The p u b l i c s e c t o r , as the main growth v e h i c l e , has t r i g g e r e d some expansion In the p r i v a t e s e c t o r .

Because the t a b l e r e f l e c t s "best guesstimates," c e r t a i n assumptions had to be made that s i g n i f i c a n t l y a f f e c t the v a l i d i t y of the f i g u r e s presented. Those assumptions Include, f o r example, that the " v i l l a g e economy" (term used by the 1973 P o p u l a t i o n Census) grew at an AAGR equal to that f o r the p o p u l a t i o n aged 15 to 64 and that the "unemployed" category (1973 P o p u l a t i o n Census), e s p e c i a l l y males, decreased s i g n i f i c a n t l y because i t was the major source f o r workers e n t e r i n g wage and s a l a r y employment. Both of these assumptions could be f a l l a c i o u s e i t h e r i n part or i n t o t a l . They a l s o Include c e r t a i n value judgments concerning the "unemployed" category u t i l i z e d In the 1973 P o p u l a t i o n Census. Concise d e f i n i t i o n s and analyses of t h i s category were u n a v a i l a b l e to the author. The author f i n d s i t d i f f i c u l t to b e l i e v e the accuracy of the 1973 data (17.5 percent of the t o t a l l a b o r f o r c e was "unemployed"*) given both the r o l e and the opportunity f o r production i n the subsistence or " v i l l a g e economy" s e c t o r .

* C u r r e n t l y not working but a c t i v e l y seeking employment.


Table C . l . Wage and salary earners and average annual earnings by type of economic a c t i v i t y : 1979

Type of economic a c t i v i t y Number

Avg. annual earnings

Type of economic a c t i v i t y Number

Avg. annual earnings

0> Co CD O rt H-I K H-(D O CO rt M

CO O l-» fl> CD 0 0 rt P-(D CO

< (0 t-1

O

§ rr •tf rt O OQ rt

1. A g r i c u l t u r e , f o r e s t r y , and f i s h i n g

2. Mining and quarrying

3. Manufacturing FSM c i t i z e n s U.S. c i t i z e n s Other c i t i z e n s

Total

4. E l e c t r i c i t y , gas. and water FSM c i t i z e n s U.S. c i t i z e n s Other c i t i z e n s

Total

Construction FSM c i t i z e n s U.S. c i t i z e n s Other c i t i z e n s

Total

6a. Wholesale and r e t a i l Trade FSM c i t i z e n s U.S. c i t i z e n s Other c i t i z e n s

Total

163 5 8

171

40

60

100

476 7 2

485

1,700

1,700

3,000 8.600 8,400

3,300

1,500

3,800

2,900

1,400 7,400 900

1,500

6b. Hotels and restaurants FSM citl2ens 55 U.S. c i t i z e n s Other c i t i z e n s 2

Total

7. Transportation, storage, and communication FSM c i t i z e n s 367 U.S. c i t i z e n s Other c i t i z e n s 7

Total 374 8. F i n a n c i a l , insurance, real

estate, and business services FSM c i t i z e n s 17 U.S. c i t i z e n s Other c i t i z e n s

Total 17

9. Community, s o c i a l , and personal services FSM c i t i z e n s 2,214 U.S. c i t i z e n s 66 Other c i t i z e n s 36

TOTAL 2,316

A l l a c t i v i t i e s FSM c i t i z e n 3.651 U.S. c i t i z e n s 82 Other c i t i z e n s 121

Total 3,854

1,100

4,700

571,200

500

3,000

500

4,600

4,600

2,900 13,700 5,100

3,200

2,300 12,600 4,200

2,600

Source: Pohnpei State S t a t i s t i c s O f f i c e : 1982.

Table C.2. Structure of the Pohnpei State labor force: 1973-79

Year/Sex

Wage salary earners

V i l l a g e economy

Home-maker Students Unemployed

Mot economically

ac t i ve Hot

stated Armed Forces Total

1973 N 1.839 1,146 0 733 884 116 5 11 4,736

Hale % 38.8 24.2 15.5 18.7 2.4 0.1 0.2 99.9%

Female N %

452 9.7

564 12.1

2,338 50.1

426 9.1

764 16.4

123 2.6

4 0.1.

- 5,671 100.1%

Total H %

2.291 24.4

1,712 18.2

2,338 24.9

1,159 12.3

1,648 17.5

239 2.5

9 0.1

11 0.1

9,407 100%

1979

Hale H %

3,094 51.2

1,441 23.9

0 1,114 18.4

227 3.8

146 2.4

6 0.1

12 0.2

6,040 100%

Female N %

760 13.2

708 12.3

2,888 50.1

641 11.1

614 10.6

154 2.7

5 0.1

- 5,770 100.1%

Total N %

3,854 32.6

2,149 18.2

2,888 24.5

1,755 14.9

841 7.1

300 2.5

11 0.1

12 0.1

11,810 100%

AAGR (%) 1973-79

Hale 9.06 3.86 0 7.22 -20.3 3.91 - - 4.14

Female 9.05 3.86 3.58 7.05 -3.68 3.82 - - 3.58

Total 9.06 3.86 3.58 7.16 -10.71 3.86 3.86

Sources: 1973 Population Census: Pohnpei State S t a t i s t i c s O f f i c e : 1982; Pham: 1982; author's estimates.

The quasl-subsistence or " v i l l a g e economy" sector i s shown i n Table C.3. The t a b l e i s not completely accurate as i t does not i n d i c a t e the r o l e of persons aged 65 years and over nor of those aged 15 years and under. A l s o only the main a c t i v i t i e s are shown, which does not i n d i c a t e the v a r i e t y of a c t i v i t i e s performed by a s i n g l e person. S i m i l a r l y , the r o l e of females i n productive a c t i v i t i e s commonly r e f e r r e d to as "housework" or "domestic d u t i e s " i s not I n d i c a t e d . However, the t a b l e assumes that "Food growing" p r i m a r i l y f o r subsistence or personal consumption i s the main absorp t i o n a c t i v i t y f o r employment and I s thus i n c r e a s i n g more r a p i d l y than the other c a t e g o r i e s . These other c a t e g o r i e s can g e n e r a l l y provide the i n d i v i d u a l w i t h more opportunity to earn cash than "Food growing."

The preceding data only describe the obvious: that the " v i l l a g e economy" continues to be a major source f o r employment; that wage and s a l a r y earners are concentrated i n and around K o l o n i a ; that wage and s a l a r y employment and i t s high growth r a t e during the 1970s are dominated by the p u b l i c sector; and that p r i v a t e - s e c t o r wage and s a l a r y employment are concentrated i n the d i s t r i b u t i o n of goods and s e r v i c e s r a t h e r than i n production (or resource u t i l i z a t i o n ) a c t i v i t i e s . Beyond the data, c e r t a i n key work force problem areas have a l s o been i d e n t i f i e d and i n c l u d e the f o l l o w i n g :

• The educational system i s based on that of the United S t a t e s .

. There i s a high r e l i a n c e on f e d e r a l (U.S.) funding of the p u b l i c sector that r e s u l t s i n a short-term perspective on the work f o r c e development.

. The maintenance l e v e l of educational f a c i l i t i e s i s low and the r e q u i s i t i o n of s u p p l i e s i s poor ( i . e . , there are management problems).

. There i s a l a c k of i n s t r u c t i o n a l m a t e r i a l s , and those that are a v a i l a b l e are from the United S t a t e s .

. The q u a n t i t y and q u a l i t y of l o c a l and e x p a t r i a t e teachers are i n s u f f i c i e n t .

. Students have low performance l e v e l s i n E n g l i s h ( t h e i r second language and the language of i n s t r u c t i o n ) , which a f f e c t o v e r a l l performance.

. The q u a l i t y of education a v a i l a b l e i s l i m i t e d , e s p e c i a l l y at the secondary l e v e l , and e i t h e r i s concentrated i n K o l o n i a or i s an option open only to those w i t h s u b s t a n t i a l f i n a n c i a l resources (Pham: 1982).

Pham (1982), who i d e n t i f i e d the above problem areas a l s o presented work f o r c e requirements f o r c e r t a i n key sectors or i n d u s t r i e s , p r i m a r i l y


Table C.3. Structure of the v i l l a g e economy labor force aged 15 to 64: 1973-79

Main productive a c t i v i t y

Year/Sex Food

growing Fishing Copra Livestock Handicraft Other Not

stated Total

1973: Hale 793 163 125 40 12 13 2 1,148

Female 235 70 17 27 165 a 1 523

Total 1,028 233 142 67 177 21 3 1,671

1979: Hale 995 205 157 50 15 16 3 1.441

Female 295 88 21 34 207 10 1 657

Total 1,291 293 178 84 222 26 4 2.098

Sources: 1973 Population Census: Pohnpei State S t a t i s t i c s O f f i c e : 1982; author's estimates.

i n the p u b l i c s e c t o r . These in c l u d e increases i n the number of personnel i n , f o r example, the h e a l t h s e c t o r , telecommunications maintenance, teaching, a d m i n i s t r a t i o n , and s a l e s . These p r o j e c t i o n s , however, only r e f l e c t the current employment s t r u c t u r e and planned increases i n s p e c i f i c s e r v i c e s , such as a d d i t i o n a l telephones and extension of the e l e c t r i c i t y g r i d . The projected l a b o r requirements do not i n c l u d e

. d i s c u s s i o n on the r a p i d l y growing s i z e of the l a b o r f o r c e ,

. a n a l y s i s of the q u a n t i t a t i v e and q u a l i t a t i v e requirements of increased economic production,

. the e f f e c t of q u a l i t a t i v e and q u a n t i t a t i v e increases of s k i l l e d l a b o r ,

. the c o n s t r a i n t s on continuing p u b l i c - s e c t o r growth,

. the d e s i r a b i l i t y of s h i f t i n g the employment s t r u c t u r e away from the p u b l i c s e c t o r , and

. the cost of such a r e s t r u c t u r i n g .

The employment development and t r a i n i n g plan r e f e r r e d to above (Pham: 1982) does discus s r i s i n g expectations ( e s p e c i a l l y by younger people), a widening generation gap, and s t a t i s t i c s such as a s u i c i d e r a t e of 200 per 100,000 people i n the 15- to 25-year-age group i n M i c r o n e s i a as a whole (de s c r i b e d as "among the world's h i g h e s t " ) . However, as i m p l i e d by the above omissions i n the a n a l y s i s , key Issues are c l e a r l y s k i r t e d : f o r example, a r a p i d l y Increasing p o p u l a t i o n , r i s i n g e x p e c t a t i o n s , l i m i t e d o p p o r t u n i t i e s to s a t i s f y these ex p e c t a t i o n s , and open m i g r a t i o n to the United S t a t e s . Taken together, these is s u e s suggest that the FSM could a n t i c i p a t e a s i t u a t i o n s i m i l a r to that found i n s e v e r a l South P a c i f i c n a t i o n s , such as the Cook I s l a n d s .

The Cook Isl a n d s has a d e c l i n i n g population In absolute numbers; but more important, those i n the working-age group, e s p e c i a l l y s k i l l e d l a b o r , who r e s i d e i n the Cook Islands are v a s t l y outnumbered by emigrants to New Zealand. This would mean that as people are t r a i n e d i n Pohnpei and the FSM, they w i l l emigrate to the United S t a t e s . This does not suggest that the FSM w i l l not r e c e i v e c e r t a i n b e n e f i t s from t h i s r e l a t i o n s h i p , espec i a l l y i n remittances of income. I t does i n d i c a t e that scarce resources u t i l i z e d to t r a i n FSM c i t i z e n s w i l l be c o n t r i b u t i n g to the s k i l l e d l a b o r pool In the United S t a t e s . To a major extent, t h i s Issue has been d e a l t w i t h i n a unique manner by the Compact of Free A s s o c i a t i o n : FSM c i t i z e n s working i n the United States w i l l pay FSM taxes rather than U.S. f e d e r a l taxes (d u r i n g the compact p e r i o d ) , and that f a c t ensures some compensat i o n f o r past FSM expenditures and l o s t revenue. Regardless of b e n e f i t s , an hourglass age s t r u c t u r e could be a n t i c i p a t e d , which i m p l i e s that s k i l l e d personnel w i l l continue to be a scarce resource, even w i t h a most aggressive t r a i n i n g and s k i l l development program.

100


Appendix D: SELECTED ENERGY DATA

A d d i t i o n a l data not discussed i n the text are presented i n the f o l l o w i n g t a b l e s and f i g u r e :

Table D . l . Petroleum imports i n the P a c i f i c : 1980

Table D.2. Commercial imports of petroleum products i n t o Pohnpei: 1979-82

Table D.3. Power generation output: FY 1975-84

Figure D . l . Pohnpei s t a t e power p l a n t s — l o a d curves

Table D.4. Pohnpei's load growth and f u e l c o s t s : FY 1979-89

Table D.5. Revised plans f o r Pohnpei 1s energy development: FY 1981-89

The l a s t t a b l e i s an update (1984) of Table 3.4. discussed i n the t e x t .

Table D . l . Petroleum imports i n the P a c i f i c : 1980

Values of petroleum imports

L o c a t i o n Value As % of As % of domes-(US$ m i l l i o n ) imports t i c exports

K i r i b a t i 3.8 N.A. N.A. Tonga 5.2 12 66 Solomon I s l a n d s 14.6 19 22 Western Samoa 8.8 13 94 Niue 0.6 17 188 F i j i 129.3 23 35 Cook I s l a n d s 2.7 11 65 Papua New Guinea (1977-78) 218.5 20 26 Vanuatu (1979) 7.0 13 55 Pohnpei 3.0 25 401

Source: P a c i f i c Energy Program: 1982b. Selected Data from Country Energy M i s s i o n Reports. East-West Center. Honolulu.


Table 0.2. Commercial imports of petroleum products into Pohnpei: 1979-82 (USSf.o.b.)

1979 1980 1981 1982

Commodlty Tax Value Tax Value Tax Value Tax Value

Gasoline 9,324 310,819 12,613 420,455 32,663 1,088,789 30,285 1,009,532

Diesel 5,129 170,973 16,107 536,922 40,434 1,347,822 27,965 932,197

J e t fuel 3,537 117,918 8,698 289,953 26,860 895,365 21,942 731,410

Lube o i l 752 25,091 1,491 49,718 6,702 22,341 4,270 142,346

Kerosene 497 16,587 1,112 37,073 4,032 134,413 3,942 131,410

Aviation gas 3,578 125,273 1,325 44,182 2,826 94,216 2,977 99,233

Solvent 2 76 21 708 57 1.900 56 1,898

Total 22,999 766,737 41,367 1,379,011 113,574 3,584,846 91,437 3,048,026

o ro

o> CD CD o rt p. I Hh C H-fl> o CO rt M

CO O I-1

0 0 Sources: Pohnpei State S t a t i s t i c s O f f i c e : 1982; OPS-FSM: 1983; Pohnpei State S t a t i s t i c s Office: 1983. fD CD rt ̂ Notes: The figures for 1979 and 1980 cover only the period from August 1 to December 31.

fD < Does not Include government Imports. In 1982 government purchased an estimated (OPS-FSM) $2 m i l l i o n , ^

of which $1.3 m i l l i o n was for diesel for e l e c t r i c i t y generation. o

T> 0 <T> 0 rt

rt o OQ rt

Table D.3. Power generation output: FY 1975-84 (thousand kwh)

F i s c a l Year Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June July Aug. Sept. Total

1975 973.2 607.2 687.0 737.7 645.9 726.4 1,041.8 610.4 764.4 760.4 778.0 823.2 9,155.6

1976 884.2 654.6 987.6 1,015.8 779.8 843.0 770.0 964.2 962.2 825.6 830.4 883.8 1,0351.2

1977 984.4 764.4 935.8 803.4 876.2 883.0 748.4 1,082.2 864.0 811.0 965.2 854.0 1,0572.0

1978 889.8 925.4 991.4 958.0 880.6 1041.4 1,026.0 1,066.8 1,141.6 900.2 905.6 908.6 1,1635.4

1979 812.8 819.8 1,118.2 1,029.2 1,040.8 1,064.2 1,206.8 1,064.0 1,136.8 1,229.8 115.6 1,310.0 1,2948.0

1980 1,154.6 875.2 1,012.0 1,181.6 1,025.0 1,211.4 1,388.0 740.4 1,477.6 1,424.0 1,019.6 1,261.8 1,3771.2

1981 1,132.8 1,052.0 1.057.8 1,226.2 1,012.4 1,051.6 697.0 964.4 1,005.2 981.8 1,068.4 1,097.0 1,2346.6

1982 1,269.6 1,193.2 1,164.8 1,373.6 946.0 952.4 885.8 869.7 935.0 10,245.4 1,246.0 1,266.6 1.3145.7

1983 1,074.6 1,177.4 990.0 910.0 1,631.2 1,107.4 1,235.8 2,782.6 995.8 a 1,417.8D 1,324.6 14,647.2

1984 ' 1,378.0 1,310.8 1,526.0

Source: State Department of Resource Conservation and Surveillance: 1984.

Notes: a. Does not include CAT 398 production.

b. Included CAT 398 kwh production from June to August.

o

td *v CD O rr H-I Hi

n> o CD rt n

CO O H* fD (0 0 P rt a. ro co * o

fD < (D O

TJ

ro 3

* o OQ H

M>M> fUflytS, (saccico OAKS)

15 o 8 o I 1 1 I I ! I I ! I § !

TIME OF DAY (Ilour)

Figure D.l . Pohnpei State power plants-load curves.

Source: OPS - I SM. 1981.

o o Ox CM €*J s a a

Table D.4. Pohnpei's load growth and f u e l c o s t s : FY 1979-89

F i s c a l Year

Demand (mwh) 10%/yr Peak (kw)

F u e l ( m i l . g a l / y r )

F u e l cost ( i n c l . 5%/gal)

T o t a l POL cost

( $ m i l l i o n )

1979 12.95 2,120 1.16 0.53/0.82 0.77 1980 12.80 2,252 1.17 0.82/1.23 1.27 1981 12.35 2,360 1.02 1.22/1.36 1.54 1982 13.15 2,490 1.20 1.26/1.29 1.58 1983 14.65 2,530 1.40 1.26/1.29 1.60 1984 a 16.15 2,836 1.50 1.20 1.68 1985 a 17.80 3,126 1.62 1.07 1.76 1986 a 19.62 3,446 1.16 1.12 1.85 1987 a 21.64 3,800 1.66 1.18 1.94 1988 a 23.85 4,189 1.80 1.24 2.04 1989 a 26.30 4,619 1.84 1.30 2.14

Source: S t a t e Department of Resource Conservation and S u r v e i l l a n c e : 1984. Pohnpei.

kwh/year Notes: Peak demand =

8,760 - load f a c t o r

Load f a c t o r = 0.60 - 0.75 h i s t o r i c a l l y the t a b l e peak values use a 0.65 load f a c t o r .

a. P r e d i c t i o n s based on about 10% load growth trend and F i r s t quarter FY 1984 expenditures.

105


Table D.5. Revised plans for Pohnpei's energy development: FY 1981-89

Item

F i s c a l Y e a r

Item 1981 1982 1983 1984 1985 1986 1987 1988 1989

1. Petroleum for power plants (million gallons)" 1.54 1.30 1.40 1.50 1.62 1.60 1.61 1.80 1.84

2. Petroleum costs ((million)* 12.80 1.58 1.60 1.68 1.76 1.85 1.94 2.04 2.14

3. Elec t r ic i ty production (mwh)D 12.90 13.15 14.65 16.15 17.80 19.62 21.64 23.83 26.30

4. a. Production by diesel (mwh) 13.15 14.65 16.15 17.80 17.61 17.62 19.83 20.25 b. Production by hydroelectrlcity (mwh) - - - - - 2.01 c 4.02° 4.02 c 6.45 c

c. Production by mlcrohydroelectrlc (mwh) - 0.80 - 0.07 d 0.070 0.355 e 0.355 0.375 0.375 d. Production by (1) blomass (senile t

coconut, etc.) and (2) gaslflers - - - - - 0.073 f 0.256 0.256 e. Production by w1nd9 0.002 0.002 0.002 0.002 0.004 0.004 0.006 0.006 f. Production by solar - 0.001 0.003 0.005

5. Elec t r ic i ty production cost/kwhn - 0.240 0.230 0.220 0.220 0.210 0.210 0.210 0.200

6. Electr1clty rates/kwh: res1denti a1/ 3*<1,000 3*<1.000 3(1 < 1.000 commercial government - 8* > 1,000 U> 1.000 8tf> 1.000 commercial government

- 23tf>10,000

7. Collection (Smllllon) 0.197 0.186 0.156

8. Total electrical production cost (Smllllon)

Source: Pohnpei State Department of Resource Conservation and Surveillance: 1984.

Notes: a. Assuming fuel cost Increase at 5% per year.

b. Trend of load growth has been sl ight ly over 10%.

c. Assuming Nanpil Hydroelectric Plant comes on line end of FY 1986 and Lehnmesl Hydro end of FY 1988.

d. Hand Hydro on line 1984.

e. Sokehs (PTA Quarry site)) and Fred Yoma's systems are on l ine .

f. A 10-kw Gasifler Demonstration Project. Blomass Power Plant near PATS is scheduled for completion In 1989.

g. Demonstration of 1.5 kw wind system.

h. Assuming 11 kwh/gallon as the trend has been.

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EAST-WEST CENTER The East-West Center is a public, nonprofit educational institution with an international board of governors. Some 2,000 research fellows, graduate students, and professionals in business and government each year work with the Center's international staff in cooperative study, training, and research. They examine major issues related to population, resources and development, the environment, culture, and communication in Asia, the Pacific, and the United States. The Center was established in 1960 by the United States Congress, which provides principal funding. Support also comes from more than 20 Asian and Pacific governments, as well as private agencies and corporations.

Situated on 21 acres adjacent to the University of Hawaii's Manoa Campus, the Center's facilities include a 300-room office building housing research and administrative offices for an international staff of 250, three residence halls for participants, and a conference center with meeting rooms equipped to provide simultaneous translation and a complete range of audiovisual services.

PACIFIC ISLANDS DEVELOPMENT PROGRAM The Pacific Islands Development Program helps meet the special development needs of the islands through cooperative research, education, and training. Its analytical research provides Pacific island leaders with detailed information on alternate strategies for reaching development goals.

PIDP also serves as the secretariat for the Pacific Islands Conference, a regional heads of government organization, and its Standing Committee, composed of eight island leaders. PIDP initiates its activities in direct response to requests from the Standing Committee and works in close cooperation with the Pacific island governments, ensuring that the focus of each project addresses the islands' needs.

Since 1980, PIDP has conducted research in eight project areas: energy, disaster preparedness, aquaculture, government systems, nuclear waste disposal, indigenous business development, roles of multinational corporations, and regional cooperation.

RESOURCE SYSTEMS INSTITUTE The Resource Systems Institute (RSI) carries out policy-oriented research on issues in energy and minerals resource assessment, development policy, trade, and economic growth in the Asia and Pacific region. RSI's projects are conducted within the context of three major programs: Energy, Minerals Policy, and Development Policy and International Studies. The current research agenda includes projects on regional energy security, technical and economic assessment of land and marine resources, rural development, and trade and investment patterns. Projects are also under way that examine Pacific Basin economic cooperation, ASEAN regional cooperation, and international relations issues.

Research and related activities are undertaken by RSI project teams consisting of an international research staff, invited scholars, and graduate students. These project teams, working in cooperation with regional research groups, help realize the Center's goals of promoting better relations and understanding among the nations of the region through cooperative study, training, and research.

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