Pohnpei : Household Income, Expenditure and the Role of Electricity

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Pohnpei : Household Income, Expenditure and the Role of Electricity POHNPEI: HOUSEHOLD INCOME, EXPENDITURE, AND THE ROLE OF ELECTRICITY by James P. Rizer August 1985 Pacific Islands Development Program Resource Systems Institute East-West Center 1777 East-West Road Honolulu, Hawaii 96848, USA JAMES P. RIZER is a Research Fellow with the Pacific Islands Development Program (PIDP) at the East-West Center. He has conducted planning studies for a number of development projects in the Pacific region. Before joining PIDP, Rizer worked for the government of Fiji and the University of the South Pacific. The Pacific Islands Development Program is publishing this report for use by Pacific island governments. To ensure maximum dissemination of the material contained in the report, it is not copyrighted and island governments are encouraged to copy the report or portions of it at will. PIDP requests, however, that organizations, Institutions, and individuals acknowledge the source of any material used from the report. I CONTENTS Page No. List of Figures v List of Tables vi Foreword ix Preface xi Acknowledgments xiii List of Abbreviations xiv EXECUTIVE SUMMARY 1 Chapter 1. DEVELOPMENT OF THE STUDY 5 Identifying a Site 5 Focus of the Study 5 The Questionnaires 10 Planning the Study 11 Chapter 2. POHNPEI: AN OVERVIEW 13 Location 13 Physical Characteristics 13 Flora and Fauna 14 History 14 Transportation and Communication 16 Social Services and Issues 17 Chapter 3. RURAL ELECTRIFICATION: A CONTEXT 19 Selected Data on Current Electricity Use 20 Energy Development Goals 25 Chapter 4. SOCIOECONOMIC PROFILE OF STUDY HOUSEHOLDS 29 Population 30 Economic Activity, Education, and the Use of Time 33 Income and Expenditure 38 Comparison of Sokehs and Uh 47 Distribution of Income 54 Other Household Characteristics 57 Chapter 5. HOUSEHOLD ENERGY 61 Cooking 61 Lighting 64 Energy Use on Sokehs 64 Electricity Consumption on Sokehs 66 Chapter 6. POLICY QUESTIONS 71 iii Pacific Islands Development Program East-West Center APPENDIXES A: The Economy 79 B: Population 89 C: The Labor Force 95 D: Selected Energy Data 101 REFERENCES 107 iv Pacific Islands Development Program East-West Center LIST OF FIGURES 1.1. Map of the new Pacific 6 1.2. Map of Pohnpei Island 7 1.3. Map of Uh study area 8 1.4. Map of Sokehs study area 9 4.1. Distribution of income levels by households 41 4.2. Comparison of rural and periurban: mean weekly household income and resources 52 4.3. Mean weekly household income by location and income group 53 4.4. Lorenz Curve of income distribution • 55 5.1. Value of household possessions and kwh consumed per month by weekly household cash income 69 6.1. Impact of electricity costs on unaccounted cash expenditure by income group 75 D.l. Pohnpei State power plants—load curves 104 v Pacific Islands Development Program East-West Center LIST OF TABLES 3.1. Electricity tariffs in the Pacific: 1981-82 (US^/kwh) 21 3.2. Pohnpei power production—revenue data: 1980-81 21 3.3. Number of electricity users by average kwh per month consumed and end-use classification (and % of total production per class): November 1980 - March 1981 23 3.4. Pohnpei energy development and resource assessment targeted goals: 1981-87 26 4.1. Enumerated population by area, sex, and five-year- age groups • * 31 4.2. Population distribution by major age groups (%) 32 4.3. Main occupation by study area and sex 34 4.4. Study population by educational level 36 4.5. Use of time: economically active population by study area, main occupation, and average hours per day per activity 37 4.6. Weekly household income and expenditure for the total sample 39 4.7. Comparison of Pohnpei weekly household expenditure patterns with other Pacific island surveys and indices (CPI weights and percentage weekly expenditure for various categories) 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 percentage3 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 expenditure—Middle 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. Distribution of cash income by income group 56 4.16. Income levels 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 construction by income group and study area 60 5.1. Number of households by energy source for cooking 62 5.2. Energy source for cooking by income group, study area, and number of households 63 vi Pacific Islands Development Program East-West Center List of Tables (cont.) 5.3. Household energy source for lighting by area and number of households 65 5.4. Sokehs energy use by income group and number of households 65 5.5. Mean monthly electricity consumption on Sokehs Island: November 1980 - March 1981 67 5.6. Electricity use by income group (kwh/month) 68 6.1. Priority community needs as perceived by study households (% of households) 72 A.l. Money income: 1980 (US$) 80 A.2. Value of consumption of the traditional-sector State of Pohnpei: 1980 82 A.3. Value of nonmarketed production—rural households: 1978-79 83 A.4. Commercial and state government imports into Pohnpei: 1982 84 A.5. Imports of selected commodities into the State of Pohnpei 85 A. 6. Summary of commercial imports Into Pohnpei State by SITC and country or area of origin: 1977 (% indicates the origin of commercial imports from each country or area) 86 B. l. Population growth 1973-80: Federated States of Micronesia, Pohnpei State, and select areas on Pohnpei Island 90 B.2. Pohnpei State and official population estimates by age group and sex: 1973-80 91 B. 3. Pohnpei State official population projections: 1973-88 (mid-year) 92 C. l. Wage and salary earners and average annual earnings by type of economic activity: 1979 96 C.2. Structure of the Pohnpei State labor force: 1973-79 97 C. 3. Structure of the village economy labor force aged 15 to 64: 1973-79 99 D. l. Petroleum imports in the Pacific: 1980 101 D.2. Commercial imports of petroleum products into Pohnpei: 1979-82 (US$f.o.b.) 102 D.3. Power generation output: FY 1975-84 (thousand kwh) 103 D.4. Pohnpei*s load growth and fuel costs: FY 1979-89 105 D.5. Revised plans for Pohnpei's energy development: FY 1981-89 106 vii Pacific Islands Development Program East-West Center FOREWORD During the 19th century, the Pacific islands were net exporters of energy. Times have changed, however, as the export of whale oil has given way to the Import of fossil fuels. Although wood is commonly used for cooking and some of the larger island nations have developed hydroelectric schemes, imported fossil fuels provide the bulk of the energy used for transport, manufacturing, and electricity. With fossil fuels commonly representing 20 to 25 percent of a nation's total import bill, the devel• opment of the Pacific islands is constrained by the use of scarce finan• cial resources to the purchase of imported energy and is thus vulnerable to both its price fluctuations and basic supply. Recognizing the impact of imported fuels on their nation's economies, the need to more fully exploit indigenous resources, and the necessity of cost-effective uses of fossil fuels, Pacific island leaders at the March 1980 Pacific Islands Conference directed that a comprehensive Pacific energy program be established to provide policy advice, training, and technical assistance to regional governments. The Pacific Energy Program is supported by the United Nations Development Programme (UNDP), the European Economic Community (EEC), the South Pacific Bureau for Economic Co-operation (SPEC), and the East-West Center (EWC). The EWC portion of the program is principally concerned with four policy areas: . Petroleum security . Planning and policy advice to Micronesian Governments . Rural electrification • Energy education/curriculum development Within the four areas of emphasis, the East-West Center Energy Program has two objectives: (1) to provide decision makers with infor• mation and methodological tools for analyzing domestic energy problems and (2) to assist with the formulation of energy policy alternatives that can be considered within a framework of regional cooperation. To ensure that the EWC project is responsive to the needs of the island states, liaison is maintained with other participating organizations and, through the Pacific Islands Development Program (PIDP), directly with political leaders from the region. This study of rural electrification in the State of Pohnpei, Federated States of Micronesia (FSM), is especially valuable because it describes how electricity is used by people in their overall development efforts. The Pacific island nations are experiencing considerable social changes as people migrate to urban areas and the Impact of Western culture increases. Pacific cultures, however, are based on traditional systems ix Pacific Islands Development Program East-West Center of support and exchange, with their roots in rural villages. As Mr. Rizer discusses, electricity is being used largely by those with Western educa• tions and relatively high cash incomes. This type of consumption pattern can be at the expense of the traditional rural culture. The people and leaders of the Pacific islands recognize the value of electricity in improving the quality of life. But electricity cannot be a contributing factor to the growth of an urban "consumer society" that the Pacific nations can ill afford. By "consumer society," we mean the import of, for example, nonessential energy-Inefficient appliances and non-nutritious processed foods that displace traditional foodstuffs.
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