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. These do not have productive uses in the Pacific islands, and their oppor• tunity costs to the development of rural areas is high because scarce foreign exchange is diverted to pay for such imports. Knowing these negative Impacts beforehand enables the planning of corrective measures. Thus, we welcome assessments that suggest measures to use electricity effectively in the context of our Pacific cultures and Indicate whether explicitly or by inference, why these initiatives are necessary.
This study is the first of four case studies on rural electrifica• tion. Toward the end of 1985, the results of the Pohnpei study will be incorporated with similar assessments of Papua New Guinea, Fiji, and the Cook Islands. The end product will be a set of policy guidelines detail• ing how rural electrification projects can be developed more effectively and which methods can enable electricity to be used more efficiently.
Filipe Bole, C.B.E. Director Pacific Islands Development Program
x
Pacific Islands Development Program East-West Center PREFACE
This study is divided into six chapters, preceded by an executive summary of the major findings and recommendations. Chapter 1 discusses the development of the study, Including some elaboration on its method• ology. Chapter 2 is an overview of Pohnpei, which is recommended to readers unfamiliar with Pohnpei and Micronesia.
Chapter 3 describes selected Pohnpei State energy and rural electrification policies, programs, and issues. Although all available data were utilized, both the quality and quantity of the data are limited, which constrains the analysis. This chapter is complemented by the appen• dices that include sections on the state's economy, population, labor force, and energy. Taken together, chapter 3 and the appendices indicate Pohnpei's overall current and planned development.
Chapter 4, "Socioeconomic Profile of Study Households," and chapter 5, "Household Energy," relate data collected during the study. The data describe the resources available to individual households and how they are used. Chapter 6 discusses policy questions.
Finally, it should be emphasized that although the impact of electrification is discussed, the study has concentrated on establishing data baselines for selected issues. This decision and the opinions expressed in the report are the author's and do not necessarily reflect the views of the Pacific Islands Development Program or the East-West Center.
xi
Pacific Islands Development Program East-West Center
ACKNOWLEDGMENTS
Without the advice and assistance of Antonio Actouka, Pohnpei State energy planner, and the support of Klkuo Apis, director of the Department of Conservation and Resources Surveillance, this study could not have been conducted.
Thomas Hall, national energy planner, provided guidance during the important early stages of the study. Jean-Pierre Raymondet-Commoy of the Pohnpei State Office of Planning and Statistics and Alex Luzama and Ishmael Lebehn of the Department of Conservation and Resources Surveil• lance offered many helpful suggestions. Jim Fitzsimmons, chief of the Statistics Division—the FSM Office of Planning and Statistics, was an excellent and constant source of feedback.
Kusto Lieman and Damian Prlmo, chief magistrates for Sokehs and Uh, respectively, greatly facilitated the study's acceptance by the community.
Field enumerators Leon William, lanser Edward, Eliander Eliam, and Aleko Pieso performed admirably not only with the enumeration but also with the revision of the questionnaires.
Dorine McConnell, Titilia Barbour, Kini Suschnigg, and Effren Bonham did the typing and a considerable portion of the editing. Michael Shiroma prepared the maps and most of the other illustrations.
Comments on the drafts were received from Antonio Actouka, Thomas Hall, Suliana Siwatibau (United Nations Development Programme—Suva), Peter Johnston (United Nations Pacific Energy Development Programme), and East-West Center colleagues Marcia Gowen, Michael P. Hamnett, and W.S. Pintz.
To all of the above and to those not mentioned who gave freely of their time, thank you.
xiii
Pacific Islands Development Program East-West Center LIST OF ABBREVIATIONS
AAGR Average Annual Growth Rate ADB Asian Development Bank c.i.f. cost, insurance, and freight CPI Consumer Price Index DOE Department of Energy (U.S.) f.o.b. free on board FSM Federated States of Micronesia FY Fiscal Year (U.S.: From October 1 to September 30) HIES Household Income and Expenditure Survey kg kilogram km kilometer km2 square kilometer kva kilovolt amperes kw kilowatt kwh kilowatt hours n.e.c. not elsewhere cited OPS-FSM Office of Planning and Statistics - FSM OPS-Pohnpei Office of Planning and Statistics - State of Pohnpei OPS-TTPI Office of Planning and Statistics - TTPI (located in the Northern Marianas) PEP Pacific Energy Program SITC Standard International Trade Classification TTPI Trust Territory of the Pacific Islands
Numerical units
1. All figures are metric unless noted. 2. All dollars are in current US$ unless noted. The study was conducted in 1983. At that time, there was no Consumer Price Index (or other indices of inflation). Applying U.S. rates could be misleading since increases in transportation costs could be understated, while the price of goods and services could be overstated due to different consumption patterns (between the United States and the Federated States of Micronesia).
xiv
Pacific Islands Development Program East-West Center EXECUTIVE SUMMARY
The purpose of this study of rural electrification on the Micronesian island of Pohnpei is to assess the impact of electricity on culture, Income distribution, and development. The study also attempts to establish a baseline to facilitate the design of more appropriate and beneficial rural electrification projects in the Pacific. In reviewing the literature on rural electrification, the author found that many studies appear to concen• trate on trying to show a cause and effect relationship between rural electrification and development, without conclusive results (ADB: October 1983). In contrast, this study focuses on the household as the unit for analysis and places the role of electricity in the context of a household's utilization of all of its resources.
The household resources, which have been detailed, include income— both subsistence (or nonmarket production) and cash (economic activity or employment)—and the use of time. In general the direct use of electricity and energy play minor roles. Given the focus of this study, a high priori• ty has been to establish baseline data to assess the broader Implications of development. Isolating or Identifying the role of electricity in development, or its specific impact on culture, is difficult because many other factors are involved.
The island of Pohnpei is the major land mass in the State of Pohnpei and the residence for 90 percent of the state's population (1980 popu• lation: 23,000). The State of Pohnpei Is one of four comprising the Federated States of Micronesia (FSM). Formerly administered as a compo• nent of the United Nations Security Trusteeship of Micronesia from Saipan in the Northern Mariana Islands, the FSM Is scheduled to begin a Compact of Free Association with the United States (the trusteeship administrator) in 1985.
Pohnpei1s colonial past has resulted in an artificial and dual economy. Rural production is limited to the subsistence sector. Monetized urban life-styles are heavily subsidized by U.S. aid inflows. With limited commercial development of natural resources, imports exceed domestic exports- by a ratio of 20:1. The trade imbalance is offset by U.S. aid.
Firewood is commonly used for cooking. In rural areas, kerosene and benzine are used for lighting. Many urban residents use electricity for lighting, although lower-Income groups continue to use kerosene. The electricity grid Is being extended to rural areas. Electricity tariffs 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 state's annual operating budget is used to purchase diesel for electricity production. However, only 10 to 15 percent of the state's population use electricity. Government consumption, often unmetered, accounts for nearly 60 percent of electricity production.
Pacific Islands Development Program East-West Center The study makes the following observations and draws the following conclusions:
Planning Rural Electrification
1. There are no stated rural electrification policies or objectives aside from grid extension.
2. The decision to provide electricity to an area is made by central agencies with little or no community input.
3. However, electricity is a desired service as stated by the enumerated households.
4. As a community priority, electricity trails improved sanitation, water supply, roads, and community participation in the planning process (as indicated by the enumerated households).
The Cost of Electricity
5. Given the current low tariff structures (less than one-eighth of the total cost of production), the entire state's population is subsi• dizing electricity that is physically available to only one-quarter of the population and used by only one-eighth.
6. Because fuel costs alone for electricity production consume over 20 percent of the state's total annual operating budget, many develop• ment needs and priorities are left unmet.
7. Increased tariff rates are necessary.
8. Revised tariff rates should include lifeline rates (e.g., less than 100 kwh/month).
9. Without an extended repayment period (e.g., 12 months) for basic reticulation, cash-poor rural residents will have considerable difficulty using electricity because they will be unable to afford hookup and wiring charges.
The Distribution of Income
10. Income is a major determinant in the amount of electricity consumed and in the range of its uses and applications. Those with higher cash incomes consume more electricity and use it in a wider range of applications.
11. Because substantial divisions already exist in the standard of living between income groups and between rural and urban areas, electricity is seen as widening these divisions, given that only those in the higher-income groups are able to fully exploit it.
2
Pacific Islands Development Program East-West Center 12. The impact of these widening divisions on Pohnpeian cultures cannot be ascertained.
13. Tariff increases (to the full cost of production) could negatively affect the flow of cash and goods, including traditional obligations, between family and community members because those now providing support will have less money. The alternative is for upper-Income groups to decrease their current consumption rates.
Conservation
14. There is a need to develop an educational campaign In the schools and through the media (e.g., radio), emphasizing the safe use and conser• vation of electricity.
15. Low Import duties facilitate the importation of intensive appliances. Analysis should be undertaken on raising import duties for electrical appliances and should incorporate criteria on the basis of energy efficiency and substitutabillty options.
16. Increasing import duties for electrical appliances, including dif• ferentially higher rates for inefficient or undesirable ones (e.g., electric stoves) could be considered as a means to broaden the government's tax base.
17. In addition to the state-proposed energy projects and objectives, attention should be given to developing a database on the end uses of electricity. At present, the focus is on supply and demand data that do not reflect whether electricity is being optimized by the consumers. Thus it is uncertain what role electricity is playing in the overall development efforts.
18. Consideration could be given to establishing a program that would enable the retrofitting of inefficient buildings and other major consumers.
19. Given the widespread use of wood for cooking, Increased attention should be given to improving the efficiency of its use and to reducing unhealthful cooking conditions.
3
Pacific Islands Development Program East-West Center
Chapter 1: DEVELOPMENT OF THE STUDY
Composed of the heads of government from Pacific Island nations, the Standing Committee of the Pacific Islands Conference has directed that PIDP's Pacific Energy Project include a component on rural electrifica• tion. The purpose of the rural electrification component is to assess several of the early rural electrification projects in the Pacific with respect to (1) how people have benefited from these projects and (2) how future projects can be improved to increase benefits. To meet these objectives, case studies were undertaken in Polynesia, Melanesia, and, as represented here, Micronesia. The results of the case studies were compared and evaluated in a workshop held In October 1984 with a focus on providing decision makers with data applicable to future projects.
Identifying a Site
The island of Pohnpei (estimated 1980 population: 20,318 [1980 Population Census: 1981]) was selected as a study location because Its electricity grid was being extended to rural areas, and Pohnpei therefore provided a contrast to case studies of small Islands having their own systems. As originally envisaged, the study was to have concentrated on an area that had recently received power. Closer examination, however, revealed that there were too few users in the proposed area and that they had begun receiving electricity only less than a month prior to the study.
Hence, PIDP decided to assess two areas on Pohnpei: the original, Uh, a rural municipality dominated by subsistence production and located roughly 12 km from the capital, Kolonia (1980 population: 5,550); and Sokehs Island, a periurban area adjacent to the capital that has had electricity for approximately four to five years. Although the locations of the two sites are markedly different, there are several advantages to comparing them. First and foremost, the two sites would provide, even with a limited sample, a database where essentially none existed. Second, the two sites would enable cross-checking of household income and expendi• ture data. Third, a comparison of the two sites would suggest possible shifts by rural residents in their consumption patterns as access to grid Increased, rural Income rose, and the period of time people use electrici• ty increased. (See figures 1.1-1.4.)
Focus of the Study
The broad emphasis of the study has been to analyze electricity in the context of the overall use of resources by individual households. Thus electricity has a limited role with respect to other factors. The limited attention given to the aggregate, or state, level has focused on presenting a general picture of electricity use, policy, and development goals.
Pacific Islands Development Program East-West Center
Pacific Islands Development Program East-West Center FT—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
\ \ /
SOKEHS Study Area Study Area K pi 'So'/
PONAPE ISLAND
PONAPE DISTRICT ti * ^ ELECTRICAL ROUTE: •••••• EXISTING coo- PROPOSED
Kilometers V, ^«S"0 ft \ 0 1I 2 3 4 5 6 7' 8 9 1C 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.
Pacific Islands Development Program East-West Center At the household level (chapters 4 and 5), field research has been conducted in the above-mentioned areas. Emphasis has been on placing electricity in the context of overall household resources. At this level, the use of electricity as a means to achieve specific end uses, such as lighting for studying or refrigeration, can be identified.
Another issue requiring attention is the distribution of income and opportunity among the various households. What was anticipated, and then verified by the field investigation, is that those households with higher cash incomes, which also reflects public-sector employment and higher levels of educational achievement, make more use of an imported technology such as electricity. The way in which this affects the cultural and social fabric of a specific community is ambiguous. This ambiguity stems largely from the fact that many factors cause distributional inequities. Unfortunately, many of these factors, or forces of "change," are difficult to identify and isolate. Similarly, cause and effect relationships are unclear, and attempts to relate, for example, rural electrification to economic and social development have not been completely successful (ADB: October 1983).
Thus, at the household level, the data are essentially descriptive and establish a baseline for future and comparative analyses. The data indicate the ways in which various types of resources are utilized by households with different characteristics (e.g., income and educational levels). This information, in effect, forms a basis for the policy analysis.
The Questionnaires
To assess the utilization of household resources, a set of question• naires was developed. The household questionnaires were based on (1) the 1977 Fiji Household Income and Expenditure Survey (HIES), (2) a community assessment survey that has been used in Fiji (Rizer et al.: 1982), and (3) a sociological study of an isolated rural Fijian village (Mamak: 1977). Corresponding data on Pohnpei or Micronesia were not Identified.
Other questionnaires were also reviewed. In particular, the Asian Development Bank's Regional Rural Electrification Survey (ADB: March 1983) provided useful information on the technical aspects of electricity and electrification assessment. Applying the ADB questionnaire proved diffi• cult because it was designed for much larger regions where measures such as changes in economic production could be significant. In the case of much smaller areas, the equations are not easily transferred because the justifications for electrification are vastly different in both theory and reality.
The 1977 Fiji HIES questionnaire includes sections on housing characteristics (e.g., construction materials, water, and sanitation), access to resources (e.g., land), and daily diaries (for two weeks) on cash and subsistence income, expenditures, and transfers (e.g., gifts
10
Pacific Islands Development Program East-West Center and traditional obligations). The questionnaire taken from Rizer et al. (1982) includes sections on health, education, employment and occupation, the use of time, the use of other resources (e.g., purchase or production of major items such as housing, vehicles, and crops), and personal, house• hold, community, and national development goals. A. Mamak's questionnaire includes sections on communication, community dynamics, and community- national interactions. Added to the above were sections on household energy use, specific electricity-use patterns, and assessment of wholesale and retail outlets. In all instances, the survey forms were adapted for use on Pohnpei after a review by Pohnpeian officials to ensure their applicability and practicality.
Now that the results have been reviewed, several inadequacies have been determined. Specifically, questionnaire sections provided inade• quate data for cash expenditure on transport, entertainment (including gambling), and transfers between family members (e.g., a relative working in the capital provides cash to a relative who farms in a rural area in exchange for goods such as yams and pork), and alcohol and tobacco. How• ever, it should also be noted that few surveys would state that data on such Items as alcohol and tobacco or gambling were totally accurate.
The data presented below are as collected: only one adjustment was made for one household's transport expenditure (see Table 4.10). Where prices have been used, they have been based on wholesale and retail outlets, producers' records, and the UN Ag Census 1978-1979. Where quan• tity estimates have been used, they have been taken from the Ag Census and two energy studies conducted in Fiji (Siwatibau: 1978; Lloyd et al.: 1982).
Planning the Study
The selection of two areas meant that the original time schedule and study objectives had to be substantially modified. The original concept was to administer two different sets of household questionnaires to two sets of 15 households during a six-week period on Pohnpei. With two sites, the questionnaires had to be integrated into one and the number of households substantially increased. The original plan included a conser• vative wastage factor of 33 percent per questionnaire, leaving a total of 20 households. In the revised study plan, 40 households were deemed acceptable. Due to time constraints, however, the wastage factor was reduced to 23 percent; thus 52 households were surveyed. Although the estimated wastage factors may appear high, they reflect the problems that other surveys have had on Pohnpei: the 1970 Census had to be repeated in 1973 due to inaccuracies; the 1980 Census has had results questioned; and, the UN-funded Ag Census collected income and expenditure for only six households out of a targeted 120 households.
The larger sample meant that four rather than two field enumerators would be necessary. This, In the context of only a six-week period on Pohnpei, meant that training for the enumerators in the use of the
11
Pacific Islands Development Program East-West Center questionnaires would be abbreviated and that full-time field supervision was absolutely necessary. In turn, this situation placed considerable emphasis on selecting the best enumerators available. Enumerators were recommended by various parties, the best were selected, and they performed an excellent job. However, none had had any previous experience with detailed income and expenditure surveys, although two had worked on the 1980 Census.
Regarding the notion of a wastage factor, the study was based on the household questionnaires that included two-week daily diaries on income and expenditure, both cash and subsistence (or nonmoney transfers and production). Due to certain scheduling problems (e.g., training) the enumerators were in the field in some instances up to three weeks. During a three-week period in the lives of more than 350 people who live in fairly tight-knit communities, there are bound to be events that interrupt schedules. This study was no different. For example, a high-ranking chief died, and that meant that work in one area essentially ceased for one week. Thus, data from 52 households were collected on only popula• tion, education, economic activity, household possessions, housing, attitudes toward electricity, and energy. Complete data on household Income and expenditure were collected from 40 households.
The households surveyed in the study were selected in conjunction with area leaders and, in certain respects, the community itself on the basis of the following subjects:
• Income levels • Occupations . Demographic characteristics . Housing characteristics . Energy sources and end uses
Several additional factors affected the study. First, the nature of the questionnaire required a household to open itself to nonfamily members. In Pohnpeian culture, many activities, including subsistence production of items such as yams (a staple), are traditionally "secret." Thus, information on yam production is not totally accurate: some house• holds revealed data while many did not. Second, the study was conducted after a major drought. Under a U.S. Department of Agriculture food aid program to alleviate the effects of the drought, free food supplies were distributed. Some households Initially were reluctant to release data because they thought the study was an assessment for the food program. They wanted to appear as severely affected by the drought as possible in order to receive more free food. Through radio releases and the efforts of the field enumerators and community leaders, their concerns dissipated over time. However, three to four extra days were required to complete the survey in Uh. Last but not least, it was not always possible to collect data from all household members on a daily basis. For example, people would have to go to the hospital to visit a relative, or rough weather would delay a boat's return from fishing. Absences required follow-up by the enumerators.
12
Pacific Islands Development Program East-West Center Chapter 2. POHNPEI: AN OVERVIEW
The State of Pohnpei has a population of 23,000 (1980) with roughly 90 percent residing on the main island, Pohnpei. The Average Annual Growth Rate (AAGR) of 2.55 percent for the period 1973-80 is slightly higher than the rate for the period 1948-70, 2.45 percent. Urbanization is increasing, and the only urban center, Kolonia, is projected to grow at a 3.47 percent AAGR over the period 1973-88.
Approximately 70 percent of the labor force is employed In the noncash "village" economy. Of those employed in the cash economy, 60 per• cent work in the public sector. Of public sector expenditures, 80 percent are funded by U.S. aid.
Thus, the economy could be termed artificial (U.S. aid) and dualistic (cash:noncash). With the value of imports ($16 million in 1982) roughly equal to estimated Gross Domestic Expenditure ($15 million in 1980, the most recent figure available), the economy is also one of the most open in the world. The value of imports exceeds domestic exports by approxi• mately 20:1. Aside from the noncash village economy, domestic production, whether agriculture or manufacturing, is minimal. A major revenue source is the exploitation of migratory tuna schools by the Japanese fishing fleet that paid $2.5 million (5 percent of the value of the total catch) in 1980 to fish in the Federated States of Micronesia's waters.
The following section provides a brief overview of Pohnpei's natural characteristics, history, and services such as transportation and health. More detailed analyses of the economy, population, and labor force may be found in the appendices.
Location
The East Caroline Island of Pohnpei is located at 6°45' N and 158°15' E. Pohnpei is roughly 3,800 km east of Manila, 3,000 km south-southeast of Tokyo, 4,300 km west-southwest of Honolulu, and 800 km north of the equator. The pentagon-shaped Island has a land area of 334.1 krn^ and a lagoon area of 178.5 km^ and is approximately 21 km in diameter.
Pohnpei is one of the more than 600 islands comprising the Federated States of Micronesia (FSM), which are spread over 2.5 million km^ of ocean. Pohnpei*s only urban center, Kolonia, serves as the capitol of both the State of Pohnpei and the FSM. (The other states in the FSM are Truk, Yap, and Kosrae.)
Physical Characteristics
A high volcanic Island, Pohnpei has a rugged interior with steep cliffs, knife-like ridges, and river-formed narrow valleys. A number of peaks are In excess of 600 meters with the highest, Nahnalaud, at 800
Pacific Islands Development Program East-West Center meters. Coastal areas are flat and narrow, usually edged by mangroves. Pohnpei is encircled by a series of inner-fringing reefs, deep lagoons, and an outer reef. A number of islets, some inhabited, are located immediately offshore.
Rainfall is heavy, averaging nearly 5 meters per year for Kolonia (on the coast) and 9 to 10 meters per year in the interior. April and May are the wettest months; January and February, the driest. Temperatures vary only slightly with highs near 29°C, lows approximating 24°C, and a yearly average of 27°C. Average humidity is roughly 80 percent. Cloud cover occurs daily.
The basalt parent rocks in combination with the high average temper• ature and heavy rainfall have formed laterite soils. Low in organic content and subject to heavy leaching, laterites are not conducive to commercial agriculture. They do, however, have the physical and chemical properties necessary for use as a building material. Coral (calcium carbonate) is common and used for construction. Small deposits of phos• phate and bauxite currently have uneconomic potential for exploitation.
Flora and Fauna
The dense tropical vegetation habitats ranges from mangroves and saltwater marsh to freshwater marsh to rain forest. Tropical hardwoods (e.g., monkeypod), pandanus, tall grasses, ferns, herbaceous flowering plants (e.g., orchids), hibiscus, and coconut palms are common. Bread• fruit, papaya, and banana trees are also widespread.
Most fauna have been introduced, including pigs, dogs, cats, deer, mice, and rats. Skinks, bats, lizards, geckos, and toads are ubiquitous; no species of snakes have been identified. Tropical birds—land and sea—are common.
Sea life is abundant in both variety and quantity. Corals, mangrove crabs, seaweeds, damselfish, sharks, and parrotfish typify life In the various marine habitats. Migratory tuna schools (primarily yellowfin and blgeye and tuna-like fish such as skipjack) are substantial in number.
History
It has been estimated that the original settlers of Pohnpei arrived via the Gilbert and Marshall Islands in the millenium prior to the Christian Era (1000 B.C. to 0 A.D.). Little is known of the cultures before the period of European contact although archaeological work is in progress. Several sites, including Awak and the massive basalt structures at Nan Madol, have yielded a glimpse of the housing, drainage, and agri• cultural patterns; but excavation and analyses are as yet incomplete. The ruins at Nan Madol include approximately 90 artificial islands and connecting waterways, representing a flourishing and sophisticated culture of the eleventh century. The ruins were uninhabited at the time of European contact.
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Pacific Islands Development Program East-West Center European contact occurred during the sixteenth century through the Spanish presence in the Marianas. During the Spanish period contact remained limited to an occasional galleon and a few priests.
German occupation, begun in 1898, produced major changes because the colonial power was interested in exploiting Pohnpeifs resources, mainly copra. Land reform, initiated in 1912, determined that all suitable land should be developed (for economic reasons) and that "unused" land belonged to the government. These actions, in effect, destroyed the traditional ownership patterns and considerably lessened the power and authority of the Pohnpeian nobility. During the brief German occupation, roads were built, and health and educational services were increased (OPS-TTPI: 1979).
The brief German period of domination ended in 1914 with Japan's seizure of Micronesia. The Japanese occupation, lasting until 1945, utilized Micronesia for its primary resources for prewar Japan. Adminis• trative and military presence was established, agricultural and marine resources were exploited to feed Japan's population, and settlers were brought in as a means to relieve population pressure in Japan. By 1938, over 58 percent of Micronesia's total population was of Japanese origin.
World War II in itself did not expose Pohnpei to the harsh, fighting that occurred on Saipan in the Northern Marianas and on Peleliu In Palau. There was some naval shelling and aerial bombing of the minor Japanese military installations but no major or widespread destruction to the island. However, as Japan's military capability waned, shipping became less frequent, causing the overexploltation of land and marine resources in order to feed the settler population (OPS-TTPI: 1979).
At the end of the war, the United States became the administrator of the United Nations Security Trusteeship of Micronesia. Until 1963, Micronesia was militarily Isolated and thus effectively cut off from the rest of the world. On Pohnpei little, if any, economic development occurred. Even with the end of the prohibition on foreign Investment in 1973, social and economic development under the U.S. administration has been minimal. Donald D. McHenry, former U.S. ambassador to the United Nations, said in his book Micronesia—A Trust Betrayed (1975) that "United States economic development was a dismal failure."
With the formation of the bicameral Congress of Micronesia in 1965, a major objective has been independence from the United States. Microne• sia consists of four separate entities: the Commonwealth of the Northern Marianas, the Republic of Belau, the Republic of the Marshall Islands, and the Federated States of Micronesia (Pohnpei, Yap, Truk, and Kosrae States).
The FSM is scheduled to begin a 15-year Compact of Free Association with the United States in 1985. This will allow the FSM to function as an independent nation in all respects except for certain defense and security issues. Under the compact, the United States will provide the FSM with
15
Pacific Islands Development Program East-West Center $60 million annually for the first five years, $51 million annually for the second five years, and $40 million annually for the final five years (not including adjustment for inflation). During the first five years, 44.4 percent of the $60 million annual provision ($26,645 million) will be spent on capital development. Of this share, Pohnpei State will receive 25.45 percent, or $6,781 million, annually (OPS-Pohnpei: 1983). Additional funds will probably be spent by the FSM Government in Pohnpei State on capital development. Wages and salaries (funded through the compact) of both Pohnpei State and FSM Government employees will continue to constitute a major share of the Pohnpei economy.
Thus, as the FSM terminates its colonial period, it is assured of receiving considerable financial assistance from the United States. However, the effects of colonial rule have been vast. The subsistence economy has deteriorated substantially and has been replaced largely by a public-sector bureaucracy and services (e.g., wholesaling, retailing, and transport) that supply the imported goods demanded by those people earning wages and salaries. For example, In 1980 the export of goods and services from the state (including tourism) was less than l/16th the value (f.o.b.) of imports (Pohnpei State Statistics Office: 1982). As imports for 1982 have increased, an estimated 60 percent (0PS-FSM: 1983), with little corresponding change in exports, this trade relationship has worsened. Thus political independence will not Include economic independence In the near future.
Pohnpei State, the other states, and the FSM Government are in the process of preparing development plans. Although these plans attempt to meet both state and national needs, they also satisfy the requirement of the U.S. Congress to determine expenditures during the first five-year period of the compact. As such, the plans Include capital development projects ranging from Infrastructure to health services, small-scale industries, and commercial agriculture. Even if these projects are deter• mined viable, Pohnpei's (and the FSM's) small size and distant location will require an implementation machinery considerably greater in quality and quantity than the existing mechanisms.
Transportation and Communication
International transportation is provided by two airlines: one flying from Guam to Honolulu and returning (three times each way per week); the other flying from Nauru to Guam and returning (once each way per week plus a one-way flight per week). Import of goods Is handled by freighters arriving directly from Australia, Japan, and the West Coast of the United States, averaging one shipment per month from each point of origin. Interisland transport is provided by one small airline and government vessels.
The road system on Pohnpei Is limited to paved roads in Kolonia and a poorly maintained and unpaved road that nearly circles the Island. There are few feeder roads, especially going into the interior, where
16
Pacific Islands Development Program East-West Center access is gained by foot. Yet, with over 1,000 registered vehicles (as of 1980), considerable use is made of the road network. Although some private vehicles operate as taxis and haulers of freight, there is no public transportation.
International communication is operated by a satellite station and the U.S. Postal Service. Telephone service is available in Kolonia, and radio communication is the mode between the outer islands.
One AM radio station and one FM station provide local programming. The television station available only in Kolonia imports programs (includ• ing advertisements) from the United States.
The FSM Government distributes a biweekly newsletter In the FSM, focusing on political news. The only regular newspaper Is flown In from Guam three times per week.
Social Services and Issues
Although most children under 14 years of age attend school, fewer than 20 percent over 14 years of age continue because only two high schools (one public and one private) exist on the Island (Pham: 1982). In addition, the Community College of Micronesia, which offers a two-year associate degree, is located In Kolonia and has an enrollment of approxi• mately 100 students.
One hospital (92 beds) is in Kolonia, and 22 dispensaries are scattered throughout the state. A substantial portion of the budget for health services is used for patient referrals from the outer Islands to Kolonia or from Kolonia to overseas facilities (Onaga: 1982). The govern• ment health services charge a minimal fee. Traditional medicine continues to be important, especially In areas distant from health facilities (Onaga: 1982). He notes that traditional medicines are often applied side-by-side Western-style practices.
Onaga writes that Infections and gastrointestinal and parasitic diseases are "major concerns." He adds that these diseases are "largely preventable and associated with poor sanitation and hygiene, ... inade• quate nutrition ... and a lack of health knowledge." He estimates that only 4,800 people (21 percent of the total population) have some type of protected water supply. Noting that if water and sewage disposal are also considered, he calculates that only 850 people (4 percent) have access. Respiratory Illnesses (including tuberculosis and asthma), eye and ear diseases, and "unknowns" are common.
The U.S. federal programs operating on Pohnpei include the Child Nutrition Program (U.S. Department of Agriculture), Environmental Health (U.S. Department of Health and Human Services), Social Security Adminis• tration, Office of Aging (U.S. Department of Labor), and Head Start. Additionally, various church and community groups provide social services.
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Pacific Islands Development Program East-West Center However, the U.S.-funded and -designed social programs have not met glaring needs such as secure water supplies, sanitation, and the develop• ment of communities actively involved in the planning process. The U.S. programs have also had major negative impacts, including, as F. Manis (1981) notes from interviews with Micronesian leaders, dependency on government services and subsidies rather than self-reliance, urban bias, poor nutrition, and a breakdown of traditional problem-solving practices.
Manis also cites examples of the effects of cultural transition (via the colonial era) such as the high incidence of drug and alcohol abuse, (especially by young people), increased crime, violence, suicide rates, and immigration. In effect then, Pohnpei would seem to be a Pacific island society in transition, one that has imported systems as its support base rather than its own traditions.
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Pacific Islands Development Program East-West Center Chapter 3- RURAL ELECTRIFICATION: A CONTEXT
Pohnpei is totally dependent on Imported fuels for transportation and electricity. Although no public transport system exists, some private arrangements (i.e., private vehicles used as taxis and carriers) partially meet the demand. Unmetered government consumption accounts for 56 percent of the total electricity consumption (DOE: 1982). The commercial and industrial sectors account for 50 percent of metered consumption. Until recently consumers were limited to the area in and around the capital (approximately 25 percent of the population). Electricity tariff rates are approximately one-eighth of the total cost of production. Because of unmetered consumption and heavily subsidized tariff rates, revenue from the sale of electricity amounts to roughly 8 percent of the total cost of production and distribution.
Where available, electricity is used for household lighting. However, only about 25 percent of the state's population has physical access to electricity, and only 10 to 15 percent of households are actually con• nected. Thus the bulk of the population relies mainly on kerosene and, to a lesser extent, on benzine lamps. For cooking nearly all households use firewood, which is often complemented by small kerosene burners. The Ag Census of 1978-79 estimated that rural households use 2,090 kg of fire• wood per household per year (248 kg per capita). On the cost basis of $0.03/kg, this firewood has an estimated nonmarket value of $128,000.*
Electricity production (OPS-FSM: 1981) comes from eight diesel units: three 800 kw and three 500 kw high-speed Caterpillars and two 750 kw White Superiors. Peak demand approximates 2,300 kw, which is 43 percent of rated capacity and 61 percent of firm capacity. In 1980, 14.8 million kwh were produced, which approximates the production estimated for 1983 (State Department of Resource Conservation and Surveillance: 1983).
To establish a baseline for the study, this chapter briefly reviews current electricity use and proposed energy development In the context of Pohnpei's overall development and de facto rural electrification policy. The analysis has been limited owing to the lack of both data and published policy directives.
*The figure of $0.03/kg is from the Ag Census 1978-1979 and is based on the cost of kerosene to produce an energy (heat) value equivalent to 1 kg of firewood. It is not based on market value since "No money is involved in firewood gathering." Slwatibau (1978) records costs of firewood in the Suva (Fiji) periurban and urban areas as F$8-ll/tonne (1978: F$1.00 = US$1,885. From Slwatibau. Bureau of Statistics for 4th Quarter 1978 gives F$1.00 o US$1.2200. Bureau of Statistics: 1982). Lloyd et al. (1982) give F$4/tonne for Lautoka (Fiji) sales and $3/tonne for Drasa Forestry Station (2nd Quarter 1982: F$l .00 = US$1.0654) (CES Bureau of Statistics: 1982).
Pacific Islands Development Program East-West Center Selected Data on Current Electricity Use
In 1980 the value of all imports into Pohnpei was US$12 million, and all domestic exports totaled $0.75 million. The value of all petroleum imports was $3 million, of which $1.3 million was for diesel fuel to produce electricity (OPS-FSM: 1982). Hence, the cost of fuel for elec• tricity production plays a major role in Pohnpei's trade imbalance.
All Pacific Island nations Import petroleum fuels, Including diesel, to produce electricity. None except Pohnpei, however, is confronted with the situation where the cost of diesel fuel to produce electricity exceeds the value of all domestic exports by 73 percent (Pacific Energy Program: 1982b). This raises serious questions about how electricity has been used in Pohnpei*s development efforts and how such a negative trade imbalance (imported diesel for electricity versus total domestic exports) could have occurred.
Both questions are difficult to answer definitively, but certain data are available that imply possible answers. Table 3.1 compares Pohnpei?s tariff rates with selected Pacific island nations. As the table shows, Pohnpei has by far the lowest tariffs. This is because all the nations listed except for the Cook Islands, which charges consumers the total cost, offer limited subsidies to the consumer (Pacific Energy Program: 1982b). Pohnpei, on the other hand, heavily subsidizes electricity pro• duction, with more than 80 percent of the cost being borne by the state government. This equates to approximately 21 percent of the state's total operating budget (not including capital development projects) per year (OPS-FMS: 1981). It must be stressed that this figure (21 percent) is based on fuel costs ($0.12/kwh) and not on the cost of production (includ• ing plant depreciation and all other Items), which has been estimated to range from $0.21/ kwh (State Department of Resource Conservation and Surveillance) to $0,248/ kwh (Pacific Energy Program: 1982a). Thus the artificially low tariff structure can be viewed as being primarily respon• sible for increasing the levels of electricity consumption and hence for adding to the Import Imbalance.
Another part of the answer can be found in Table 3.2. The data indicate that only 44 percent of the total electricity produced is billed to consumers. Apparently the other 56 percent Is consumed by government, both the state and the national. As data on consumption levels for each government department and Its end use are not available, it is difficult to determine whether electricity is playing a major role in Pohnpei's development efforts.
However, it should be noted that uses for economic development are limited to such consumers as an ice plant, the airport, and the port area. Social services—for example, the hospital and schools—are also major consumers. Again, without complete data It Is difficult to assess end use. One observation can be made however: government offices have lights and air conditioners running when they are unoccupied (e.g., during nights
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Pacific Islands Development Program East-West Center Table 3*1. Electricity tariffs in the Pacific: 1981-82 (US^/kwh)
Island nation Night rate Commercial/ or state (Fr. 12 to 6 A.M.) Residential Industrial
Kiribati 28 28 Tonga - 19 - 22 19 - 22 Solomon Islands 19 25 28 Western Samoa - . 24 24 Vanuatu 12 24 16 - 40 Niue - 21 21 Fiji - 18 12 - 19 Cook Islands - 18 31 Pohnpei - H for 1 ,000 kwh/month; 8^ over 1,000 kwh/month
Source: Pacific Energy Program: 1982b. Selected Data from Country Energy Mission 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 billed billed collected
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 82 946,000b 438,232 21,767.30 19,634.67 Mar. 31 713 85 1,051,600 442,549 21,721.83 20,225.22 Apr. 30 667 100 697,000b 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 Plan. Office of Planning and Statistics, Federated States of Micronesia, Pohnpei. Notes: a. Indicates customers who receive estimated monthly consumption bills owing to their not having meters. b. Drop in production caused by severe machinery failures.
21
Pacific Islands Development Program East-West Center and weekends)* Although It is not possible to quantify this situation due to lack of energy audits), our data indicate that some small unmetered government offices (e.g., those for six to eight 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 busiest restaurants. (See Table 3.3.)
Thus, unmetered government consumption must assume a major responsi• bility for current total consumption levels. Although some of this con• sumption is being used to facilitate Pohnpei's overall development, there is evidence of unnecessary or wasteful consumption. This does not include any assessment of the energy efficiencies of government buildings and appliances, which, if inefficient, also result in unnecessary consumption.
Of the 44 percent of the metered consumers, approximately 90 percent of the amount billed is collected. Table 3.3 shows metered consumers by classification of end use and levels of consumption. The government accounts for at least 20 percent of metered consumption, and records could be incomplete for housing and rentals units. Of note is that government employees in government housing consume, on the average, nearly three times as much electricity as private residential consumers. Government housing often comes furnished with air conditioners, hot-water heaters, and electric stoves—appliances that are not owned by the general population (see chapter 4).
The commercial and Industrial group consumes 50.1 percent of the total metered consumption. This group includes restaurants, hotels, offices, shops, and warehouses. There are no major industrial users. Residential users (26.3 percent) are the next largest consumer group. If the "Total" column (Table 3.3) is taken into consideration, the commer• cial and industrial group dominates consumption in the high-consumption rows. However, a number of residential consumers use relatively large amounts of electricity. If they were charged the full cost of production, their monthly bills would well exceed $100 and, In some cases, $200. As it is, they pay roughly one-fourth of these amounts.
The preceding data present a picture, albeit limited, of current electricity consumption. In summary, the following statements can be made:
• The heavily subsidized tariff rates play a major role in Pohnpei* s negative trade imbalance by encouraging consumption that in some cases is unnecessary and wasteful. Given the current wage and salary levels, it is doubtful that a residential consumer would pay $100 to $200 per month for electricity if charged the full cost of production.
. Unmetered government consumption disallows accountability for unnecessary and wasteful consumption.
22
Pacific Islands Development Program East-West Center Table 3.3. Number of electricity users by average kwh per month consumed and end-use classification (and 1 of total production per class): November 1980 - March 1981 kwh/month by number and average kwh/month Commercial/ Church/ Public Government per user Resldentlal 1ndustrlal mlsslon sector* housing0*c Total
0 - 100:N 40 3 5 1 1 50 Avg kwh/month 67.1/ 70.27 71 52.8 87 67.84 0.81
100 - 200:N 105 5 1 2 I 114 Avg kwh/month 158.84 157.64 107.8 158. 185.8 158.56 4.2*
200 - 300:N 70 11 3 6 1 91 Avg kwh/month 248.09 248.96 256.87 248.57 289.3 248.97 5.21
300 - 400;N 49 6 9 64 Avg kwh/month 344.98 343.43 360.49 347.02 6.11
400 - S00:N 24 11 1 1 6 43 Avg kwh/month 444.33 449.49 449 463.2 446.38 446.49 4.41
500 - 750:N 34 23 3 7 22 89 Avg kwh/month 623.21 630.10 62.5 542.63 626.65 619.56 12.71
750 - 1,000:N U 13 1 3 15 43 Avg kwh/month 872.13 871.11 801 872.2 902.92 858.53 8.51
1,000 - 1.50O:N 10 22d 1 10 46 Avg kwh/month 1.145.6 1,309.88 1,040 1,242.47 1,140.76 1,227.14 13.01
1,500 - 2t000:U 2 6 3 10 21 Avg kwh/month 1,585.3 1,751.35 1,689.13 1,689.05 1,694.12 8.21 Table 3.3 (cont.) kwh/month by number and average kwh/month Commercial/ Church/ Public Government per user Resident!al Industrial mission sector* housing0*0 Total
2,000 - 3,000:N 2 14 - 2 2 20 Avg kwh/month 2.206.8 2,402.4 2,173.4 2.301.85 2,349.89 10.81
3.000 - 4,000:N - 8 1 1 1 11 Avg kwh/month 3,515.7 3,213 3,009.6 3,088.2 3,403.31 8.61
4,000 - 5,000:N - 3 - - - 3 Avg kwh/month 4,545 4,545 3.11
5,000>:N 9e - - - 9 Avg kwh/month 7,291.86 7,291.86 15.11
TOTAL:N 347 134 19 35 69 604 Avg kwh/month 328.88 1,618.7 719.94 659.05 950.7 717.40 26.3% 50. U 3.2% 5.31 15. U 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 listed with an "FSM' in the records, presumably indicating rentals of offices by government and other offices such as the Post Office.
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 April 1981, excluding February 1981).
c. "Government Housing0.(Section VI In the records) has been used as classified In the records. It is likely that there are other end uses than simply housing, given the high consumption rates.
d. Includes 3 meters for one consumer (hotel operator), which have been combined.
e. Includes 4 meters for one consumer (hotel operator), which have been combined. . Given the lack of data on government end uses of electricity, it is difficult to determine the exact role that electricity is playing in Pohnpeifs development. However, the available data and personal observations suggest that a planned and efficient use of electricity is lacking in the development of infrastructure, social services, and economic resources. It seems that govern• ment consumption is allowed without directing end use to priority development sectors.
. With electricity limited to Kolonia and surrounding areas, only 10 to 15 percent of the state's total population uses a service (electricity) that consumes 21 percent of the state's annual operating budget. Thus opportunity costs are high because funds that could otherwise be used for overall development are diverted to produce electricity.
. It may be concluded that the cost of producing electricity is having a negative impact on overall development.
Energy Development Goals
Pohnpei State is presently preparing Its first development plan, which includes a draft state energy plan with the following primary objectives (OPS-FSM: 1981):
. To establish an energy plan that will be in line with the FSM's national goals of economic advancement and political Independence
• To educate the people of Pohnpei in the wise use and development of energy through realistic utility rates
. To provide for the most reliable and most effective central electricity energy system by establishing a publicly owned and operated electricity commission
. To assess and develop Pohnpei's renewable energy resources according to the state's overall economic development plan
None of the above objectives specifically addresses rural electrifi• cation. However, the extentlon of power lines to rural areas Is currently a major project. The extension, 13.8 kva lines, is scheduled to total 50.7 km at a cost of $1.83 million ($36,095/km). Although originally scheduled for completion in January 1982, just over one-half of the extension (to the Uh study area) has been completed and energized; and continued extension is "on hold" as the state's development budget has constricted.
Table 3.4 shows specific projects and programs for the plan period 1982-87. Again, there is no specific rural electrification component. However, several components reflect Initiatives for rural communities
25
Pacific Islands Development Program East-West Center TABLE 3.4 Pohnpei energy development and resource assessment targeted goals: 1981-87
Goal 1981 1982 1983 1984 1985 1986 1987
1. Petroleum Imports (million gallons) 3.1 3.3 3.4 3.4 3.3 3.4 3.5
2. Petroleum costs (million $) 3.9 4.6 5.2 5.7 6.1 7.0 7.9
3. Electricity production (million kwh) 15 16.1 16.3 16.4 17 17.7 18.4
4. Production by diesel (mil. kwh) 15 16 16 16 14 14.5 15.0 Production by hydroelectric (mil. kwh) 2.5 2.5 2.5 . Production by mlcrohydro (mil. kwh) 0.008 0.10 0.11 0.11 0.16 0.25 Production by blomass (equlv. mil. kwh) 0.1 0.2 0.3 0.4 0.5 0.6 Production by wind (equlv. ml), kwh) 0.002 0.002 0.004 0.006 0.008 0.01 0.003 Production by solar (equlv. mil. kwh) 0,001 0.001 0.002 0.002 0.003
5. Electricity production costs/kwh 18* 19rf 20* 2tf 18* 19* 20*
6. Electricity rates/kwh 3*<1,000 5rf<750 7*<500 9tf<300 1U<200 13*<200 15*<200 6V>1,000 10*>75G 12tf>500 14(f>300 16*>200 18*>2Q0 2Q*>200 7. Collections (millions of $) 0.24 0.70 1.16 1.62 2.08 2.54 3.1
8. Total electrical prod, costs (mil. $) 2.7 3.0 3.0 3.0 2.7 2.9 3.1
Energy resource assessment and development funding ($)
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 oil 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 utility. including solar photovoltaic systems for dispensaries (increased solar production) and microhydro schemes. It would appear then that the grid extension will continue to be the primary instrument for rural electrification.
Given the data and analysis on current electricity use and proposed energy development, several Issues emerge:
• Without a comprehensive rural electrification policy, It Is not clear what the purpose of rural electrification is beyond the provision of service.
. Although the provision of service may justify grid extension in itself (other justification might Include economic development and upgraded health facilities), the concern should be with the end use of electricity and, as noted in Table 3.3, with the levels of consumption (given the current tariff rates).
• There is no stated policy facilitating electricity use by all income groups (e.g., lifeline rates); hence, the current distri• bution policy favors those who can afford the estimated single payment of $25 for connection and house wiring.
. As determined by this study (see chapter 5), decision makers are responding to the desire of the rural population to have electricity; yet, residents In the study areas have assigned higher priorities to secure water, sewage, and upgraded roads as community development needs than they have to electricity.
. The targeted tariff rate increases (see Table 3.4) through 1983 have not occurred and remain at 1981 levels, which suggests that the negative effect that the cost of producing electricity has on the balance of trade and on the state's budget will continue in real terms.
. Although dependent on realistic tariffs, a conservation program seems to be necessary. A primary objective of an energy plan is to educate people on the "wise use" of electricity. The plan has no component to implement this objective aside from increased tariffs.
Thus the role of electricity, and specifically of rural electrifica• tion, In Pohnpei's social and economic development Is unclear. Although one could argue that provision of electricity to rural areas is a justi• fiable end in itself, the allocation of the budget from resource develop• ment, Including human well-being and other priorities (e.g., water) to subsidize electricity at very low tariffs has to be questioned. Hence, the context in which to assess rural electrification Is limited by lack of data and policy as pertaining to both overall development and rural electrification initiatives.
27
Pacific Islands Development Program East-West Center On the basis of this information, the focus of this study has been establish baseline data on
- the current users of electricity and the purposes for which it is used,
. a profile of potential consumers in an area recently connected to the grid,
• the availability and use of total resources by individual households, and
. the overall development priorities.
28
Pacific Islands Development Program East-West Center Chapter 4. SOCIOECONOMIC PROFILE OF STUDY HOUSEHOLDS
Chapters 4 and 5, on household energy, discuss the data collected during field research on Pohnpei. This chapter emphasizes household economics—for example, economic activity, the use of time, and income and expenditure, including subsistence production. This method of assessment places household electricity and overall energy use in the context of a household's utilization of all of Its resources. Germane to the emphasis on household economics Is the point that, If and when electricity tariffs are adjusted, there will be some Indication as to how households will be affected by tariff increases.
However, isolating the impact of electricity from other Impacts or signs of change can be an almost Impossible task In some Instances. This is the case on Pohnpei where, on a statewide basis, it is possible to demonstrate such negative impacts as a trade imbalance caused In part by the Import of petroleum to fuel the electricity generation system. On a regional basis or even at the level of a specific community, the task becomes more difficult and the conclusions more ambiguous largely for the reason that electricity has not been used to Increase economic production or to upgrade other community services such as water and sanitation. But schools and health dispensaries have or will receive electricity (via grid extension or photovoltalcs), which should benefit the community at large.
Given the absence of a relationship between electricity and economic production and the high consumption and undetermined end use by govern• ment, the individual household has been selected as the basic unit for an assessment of existing consumption patterns and the overall impact of electricity on social and economic development* It Is at the household level where a student studies in the evening, where the preservation of food is facilitated and thus household expenditures ameliorated, and where waste Is more obvious.
Having acknowledged this situation, one can make several key assumptions about the use and consumption of electricity by households that have significant policy Implications. These include the following:
• That when services, such as electricity, are made available, they will be consumed.
. That consumption possibly will increase over time but most certainly with a rise in income if policies are not Instituted to conserve electricity through measures such as increasing block tariff rates and differential import duties for appliances on the basis of energy efficiency.
. That the uses of electricity possibly will broaden over time but again most certainly with an increase in income.
Pacific Islands Development Program East-West Center • That "waste" can Increase with income.
Another issue is that electricity is an introduced technology on Pohnpei; and although its use and consumption may be determined by income, it is the income earners themselves who determine the application of the technology. The western-educated civil servant in daily contact with photocopy machines, air conditioning, and electric typewriters will have a different perception of electricity and its uses than will a subsistence farmer who is more familiar with kerosene lamps and battery-powered radios. Thus it is exposure that facilitates application and waste.
The two areas included in the study are as different as the civil servant and the subsistence farmer. Sokehs Island is adjacent to the capital, Kolonia, and Is populated by a mixture of civil servants, private- sector employees, and subsistence farmers. The population generally consists of outer-island immigrants who do not have sufficient land to supply the markets of nearby Kolonia. Therefore, an education to secure public-sector employment Is highly valued.
Uh, a municipality roughly 12 km from the capital, on the other hand, is Pohnpeian and rural, where subsistence agriculture and fishing predomi• nate. The road connecting Uh with the capital is used heavily and the flow of goods, services, and ideas appears to be increasing. It is an area that has only recently received electricity (July to August 1983, several weeks prior to the study), whereas Sokehs has had electricity for approximately four to five years. Thus the two areas are In the vanguard of change on Pohnpei. Perlurban Sokehs is already closely connected to the capital, which serves as the entry point for ideas and innovations. Rural Uh, just beginning to establish similar links, Is experiencing "change" probably as rapidly as any rural area.
Before the results of the study are discussed, reference must be made to two excellent household energy surveys from the Pacific island nation of Fiji. S. Slwatibau (1978) and C.R. Lloyd et al. (1982) have focused on energy use and consumption; Slwatibau also considered forms of alternative energy. Although the authors discuss household Income and expenditure, they both emphasize the importance of the household energy sector. This study differs from theirs because it presents energy and electricity use as a variable dependent on income and expenditure patterns and life-styles.
Population
Table 4.1 shows the population of the 52 households (26 in 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 figures are substantially less than the 1980 Census figures that showed Sokehs with 7.68 persons per household and Uh with
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Pacific Islands Development Program East-West Center Table 4.1. Enumerated population by area, sex, and five-year-age groups
Uh Sokehs Total
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
Total 96 90 186 76 94 170 172 184 356
Notes: M = Male; F =» Female; T = Total.
9.67 persons per household.* To some extent, the differences might be explained in Table 4.2, which shows population totals by major age bands and percent. The study areas1 have a lower distribution in the 0- to 14- year-age group than the Pohnpei total. If the Pohnpei figures are accu• rate, this would suggest that there might have been some underrecording or that some children were staying with relatives. Another possibility is that the study is accurate. Similarly, the dependency ratios** for Pohnpei State, Uh, Sokehs, and total sample are 1.92, 1.74, 1.63, and 1.69, respectively. In other words, fewer children were recorded in the study area than at the state level.
*The survey questionnaire defines household members as those people who eat and sleep in the household, whereas the census uses "living in the household."
**Dependency Ratio Children (0-14) + Aged (65+) = : + 1 Adults (15-64)
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Pacific Islands Development Program East-West Center Table 4.2. Population distribution by major age groups {%)
Study areas
Pohnpei Age group Uh Sokehs Total total
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
Total 100.0 100.1 100.0 100.0
Source: OPS-FSM: 1982. 1981 National Yearbook of Statistics, Office of Planning and Statistics. Federated States of Micronesia. Pohnpei. Note: Figures may not sum because of rounding.
With respect to male:female ratios, the state figure is 1.05 males per female, while for Uh the figure is 1.07; Sokehs, 0.81; and total sam• ple, 0.93. The Sokehs figure is surprising because a higher male:female ratio might have been anticipated on the basis of single men staying with relatives while looking for wage employment in Kolonia. It should be noted, however, that several large households (10 or more persons) had disproportionate male:female ratios, with females outnumbering males by ratios ranging from 3: to 5:1. In these Instances, the females were either young adults (15 to 29 years of age) or over 60 years of age, in households with at least one wage earner. Although these households were few In number (4 out of 26 households with the number of persons per household exceeding 10; the largest having 19 persons, of whom 4 were males), It might indicate that females who are not earning wages or seeking jobs are more readily accepted Into households than their male counterparts. The study size is clearly insufficient to deduce any firm conclusions; yet It can be speculated that there could be a threshold for the number of non-wage-earning males In the relatively landless households In Sokehs.
Uh municipality had 0.25 percent AAGR between the 1973 Census and the 1980 Census, while the census enumeration district used in this study had an 8.51 percent AAGR. Sokehs municipality had a 1.61 percent AAGR during the intercensal period as did the Sokehs enumeration district used in this study. Pohnpei State had a 2.55 percent AAGR between 1973 and 1980. Clearly the 1980 Census figures for the Uh census enumeration district (CED 19) used in the study are much higher than would be expected
32
Pacific Islands Development Program East-West Center for a rural area. Some questions have already been raised concerning the 1980 Census, and the 1973 Census was conducted because many people considered the 1970 Census to be inaccurate.
Migration has played a prominent role on Sokehs Island. Although figures for the island are unavailable, the 1973 Census indicates that roughly one out of every three residents of Sokehs municipality was born elsewhere. Only Kolonia has a higher ratio (1:1.4) in the state. Given the proximity of Sokehs to Kolonia and the presence of communities of former residents of Mortlock and Pingelap (outlying islands), it could be assumed that the ratio for Sokehs Island is higher than that for Sokehs municipality. Reasons for migration to Pohnpei proper from the outlying islands include
• vulnerability to natural hazards, especially typhoons and drought
. high post-World War II population growth rates on the outer Islands and atolls that resulted In problems meeting basic needs (hence, emigration)
• presence of education and health facilities in Kolonia
. desire for consumer goods
. formal wage employment, particularly for young adults (Connell: 1983).
With respect to Uh, Connell (1983) states that "there has been very little Internal migration" on Pohnpei as "many commute to work and those who are farther away return to their home communities at weekends." Hence, the road between Uh and Kolonia provides those In formal employment (e.g., In the public sector) with the opportunity to earn wages and salaries In the capital while residing and participating in their community.
Economic Activity, Education, and the Use of Time
Table 4.3 shows a breakdown of the total study population by main occupation, sex, and area. As the table Indicates, more females are working In the "Domestic duties" category (see Table 4.5 for a definition) than there are households. This is also true of male subsistence farmers In the Uh sample but not in the Sokehs sample, where wage employment is larger and, It could be argued, more Important to the well-being of the members of a household.
An interesting aspect is the "Student" category. Although Sokehs has a smaller population, it has more students than Uh. If a rough estimate of students per population aged 5 to 19 is assumed, 84 percent of the Sokehs study population In this age group are students, while only 75 per• cent are students in Uh. This rough estimate does not include students
33
Pacific Islands Development Program East-West Center Table 4.3. Main occupation by study area and sex
Wage earners Pre• Domestic Subsistence Sales/ school Unable Area/Sex duties agriculture clerical Professional Technical Laborer Student child to work Retired Total
Uh
Male 35 7 25 14 4 96
Female 46 3 20 11 7 90
Total 46 35 LO 45 25 11 186
Sokehs
Male 16 11 25 9 5 76 W h3 &> p> CD O Female 47 1 27 14 1 94 rt •* I Hi « K- Total 47 16 12 52 23 6 170 fl) O CD rt M 01 Total O h- n> ID 3 3 Male 51 18 9 50 23 9 172 rt a, (D CD a Female 93 4 1 47 25 8 184 < Total 93 51 22 10 97 48 17 356 l-» O § E3 Note: N a 52 households.
1 O 00 M attending the community college and over 20 years of age, of whom there are four in Sokehs and only one in Uh, nor does it include two Sokehs students attending high school on Guam. As mentioned above, the rela• tively landless immigrants to Sokehs appear to have placed a higher value on education than those in other areas of the state. As noted, the presence of educational facilities in Kolonia Is one of the reasons for migration (Connell: 1983).
The emphasis on education in Sokehs is also demonstrated by the numbers In the "Professional" category in Table 4.3 and by Table 4.4. As Table 4.4 shows, approximately 65 percent of those In the study areas having at least a high school diploma are in the Sokehs sample. For com• parative purposes, the 1973 Census provides the most recent data. The census data indicate that of the Pohnpei State population aged 15 and over, 3.66 percent had attended college (for an unspecified length of time), compared to 7.93 percent in the study (9.26 percent in Sokehs; 6.72 percent in Uh).
According to Table 4.3, sex also plays a major role in the occupa• tional structure. Although the number of female students nearly equals male students (and exceeds males in the Sokehs sample), female wage earners are few. Rather, most women, including some who have received high school diplomas, work in the home. The three female professionals in Uh are teachers, and only one in Sokehs is in a managerial (middle- level) position.
Table 4.5 describes the use of time. The differences between the areas are few, other than that in Uh more time Is spent on non-cash income- generating activities (e.g., "Subsistence agriculture" and "Other work").
Leisure presents another contrast since it is allotted more time on Sokehs. Leisure is a difficult term because it reflects both respondents1 and enumerators' perceptions; it also has cultural definitions. Leisure includes sakau (kava) drinking (by men) in the evening, which can involve discussions on community matters and the passing on of traditions. It thus could be considered an economic activity when community affairs and development are discussed, an educational activity when oral traditions are the topic, or simply a time to relax (which also has an economic func• tion). In the case of Uh, current major topics during the sakau sessions are the proposed Compact of Free Association with the United States, rela• tions between Pohnpei and the FSM, and state and local politics. This form of leisure is significantly different from that of the five house• holds on Sokehs with televisions, where television is watched every evening by nearly all family members. (Television-viewing hours range from two to four hours; however, in several of these households, the television Is on for up to eight hours per day). It must also be noted that although childrearing is included under domestic duties, it is also performed during leisure hours by women. Women also perform other "Domestic duties" and "Other work," such as weaving and sewing, during so-called leisure periods.
35
Pacific Islands Development Program East-West Center Table 4.4. Study population by educational levels
Uh Sokehs Total Highest level 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 college 2 2 4 2 2 4 4 4 8 Two-year college 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 = Total.
N s 52 households.
Estimates of the time spent collecting firewood vary from two or two and one-half hours per week in a small household (four or fewer persons) to four hours every two to three days in large households (more than ten persons). Women are the most frequent fuel-gatherers, almost exclusively in Uh (two exceptions) and slightly less so on Sokehs (six exceptions). If figures are used from the Ag Census of 1978-79, 248 kg of firewood per capita per year (valued at $0.03/kg), the average household collects roughly 8 to 10 kg of firewood per hour spent on this activity, or 30 to 35 kg per week.
Although some mention has been made of the time spent watching TV as contrasted with the more communal sakau drinking, further comment is necessary on social changes on Pohnpei. As the tables on "Main Occupation" and "The Use of Time" Indicate by omission, there is no unemployment. In predominately subsistence or semlsubsistence societies, It would be quite difficult to arrive at a clear definition of unemployment because everyone works In one capacity or another. However, there are people who could be termed "underemployed." "Underemployment" can take many forms, Including time spent on certain community activities, as well as on less socially productive activities. More young people are spending, for example, more time playing pool; and electricity and Increased cash have enabled the spread of this activity to Uh. This is not to pinpoint electricity or money as the direct cause; rather it illustrates that a number of people "hangout." Although this is not meant as a direct criticism, what Is important is that people's life-styles and use of time are changing qualitatively and quantitatively. For example, many forms of traditional artistry appear to have all but disappeared. The significance of such trends to the future of Pohnpei remains unclear.
36
Pacific Islands Development Program East-West Center Table 4.5. Use of time: economically active population by study area, main occupation, and average hours per day per activity
Hales Females Area and ma1n\Act1v1- School Subsistence Cash Other School Subsistence Domestic Other occupation\ ty study Wages agriculturea crop work0 Lei sure study Wages agriculture3 duties Work0 Leisure
Sokehs Students 8 0.5 0.5 5 2.5 Wage earners 8 0.5 1 4 2 Professional 1 8 0.2 4 2 Self-employed (shop-owner) 12 2-3 Subsistence agriculture 2.5 5 Domestic duties
Uh Students 8 1 1 8 3 0.5 3 CD O rt H* I rti Wage earners 8 1 1 8 2.5 4 (b O Professional 0.5 8 0.5 0.5 0.5 8 1.5 4.5 CD rt M Self-employed CD (shop-owner) 12 d H* ft) (0D Subsistence a agriculture CD o Domestic duties 2.5 A) <
o a •o Notes: N 40 households. 0 n> a. "Subsistence agriculture" Includes fishing and collecting firewood. S3 rt b. "Other work" for males Includes house construction and repair, boat building and repair, and other maintenance
O activities. n c. "Domestic duties" Include washing clothes, cooking, cleaning of house and compound, and child rearing.
d. "Other work" for females Includes sewing, making handicrafts, and other activities. Income and Expenditure
Table 4.6 shows weekly household income and expenditure for the 40 households In the study for which data were collected. As the first column indicates, there are significant ranges in income and expenditure among the households. Differences between the mean and median columns, especially for the rows "Total recorded cash expenditure," "Unaccounted cash expenditure," "Total cash expenditure," and most of those under the "Income category," can be explained as being largely an effect of these ranges. Other differences reflected by the ranges are the number of zero observations (e.g., "Electricity"). Some of these data, especially "Transportation" and "Alcohol and tobacco," should be read cautiously because they may also reflect underreporting. "Alcohol and tobacco," gambling, and entertainment (both of the latter included under "Miscella• neous" category) can be underreported for a variety of reasons, including the possibility that someone might not want to acknowledge how much was spent on these items.
As the table Indicates, electricity plays a minor role In expendi• ture. The reasons are that (1) 55 percent of the households do not have electricity, (2) electricity tariff rates are low, (3) irregularity exists in reading meters, and (4) not all households with electricity have the money necessary to purchase electrical appliances and tools.
Table 4.7 has been included as a comparison with data from other Pacific island nations. Again, it must be stressed that no acceptable data have been identified from other Micronesian states (excluding the more developed Guam). As the table shows, there are a number of simi• larities, including expenditures for "Alcohol and tobacco," "Heating and lighting," "Food," and "Protein." Also, "Housing" Is roughly between Fiji's and American Samoa's CPIs (Consumer Price Indices) and Fiji's HIES (Household Income and Expenditure Survey). The "Transportation" category is considerably lower than the other data, suggesting that underreporting may have been a problem.
The "Heating and lighting" category includes expenditures for electricity, kerosene, and other purchased sources of energy. It is interesting that both in Fiji, where the tariff rates are higher, and in urban American Samoa, which is the basis of the CPI, the percentage spent on electricity is less than (although similar to) the Pohnpei sample. This can be partially explained by "economies of scale" because the "Total" category Is higher in both Fiji and American Samoa.
So that the study data could be more thoroughly analyzed, the 40 households have been disaggregated into five income groups: Upper, Upper-Middle, Middle, Lower-Middle, and Lower. The disaggregation has been based on weekly household cash income as shown in Figure 4.1. The Lower-Middle income group has been isolated on the basis of cash expen• diture patterns, including "Unaccounted expenditure," which although small in magnitude, still show positive figures. Whereas In the Lower
38
Pacific Islands Development Program East-West Center Table 4.6. Weekly household Income and expenditure for the total sample
Category Range Mean Median Note
Expenditure category
Total food 2.76 54.09 25.74 26.86 Local protein 0 - 16.49 3.27 2.91 16 zero obs. Total protein 0.95 - 36.57 11.87 10.60 Local other food 0 - 11.65 2.54 2.00 10 zero obs. Total other food 1.32 - 27.90 13.93 13.55 Alcohol and tobacco 0 - 24.36 2.79 1.69 18 zero obs. Total commercial energy 0.75 - 16.16 2.75 2.35 1 HH includes - a small store Electricity 0 3.25 0.78 0 22 zero obs. Water 0 - 0.75 0.41 0.75 18 zero obs. Transportation 0 - 10.00 2.93 1.93 11 zero obs. Building 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. Total 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 Total cash expenditure 8.00 — 250.00 86.20 61.25
Income category
Total cash income 8.00 - 250.00 86.04 61.25 Total net subsistence production 0.16 46.29 19.81 20.93 Protein 0 - 33.06 6.18 0 22 zero obs. Firewood 0.16 - 1.55 1.00 1.21 Value of services flows from consumer durables 0.63 - 26.11 4.92 2.36 Imputed rent flows from building 1.92 - 12.82 4.48 3.85 Total Income 27.75 — 310.40 115.25 85.89
Notes: N a 40: 26 perlurban; 14 rural.
Figures may not sum because of rounding.
39
Pacific Islands Development Program East-West Center Table 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)
1977 Fiji Household Income and Expenditure Survey
ExpendItureV Central Central 1 terns/ \Surveys Total F1J1 CPI American Samoa division division Suva-urban Suva-urban Total sections/ \ and Pohnpei weights CPI weights subsistence cash F1j1an:1owest F1j1an:m1ddle national categories \ indices sample 1979 1982 village village 20% 20% 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
b Heating and lighting 5.0 3.3 4.9 4b 1° 2b 3b 3
Housing 6.2 15.0 15.0 2 3 2 3 6
Transportation 5.4 13.9 13.2 14 23 12 12 13 o Consumer durables 9.0 6.0 .c _c _c _c _c _c fi> tu All others 20.1 22.6 15.0 20 34 32 41 41 CO O .a .a rt H- Health education 5.3 4 5 3 3 5 s: H. (T> O CO Total 99.8 100 100 100 100 100 100 100 rt M CO o H* tb Ui 3 2 Sources: American Samoa CPI figures from OPS-FSM: 1983; Fiji CPI: October 1982; 1977 Fiji Household Income and Expenditure Survey rt ft. ro co (HIES) taken from Rlzer et al.: 1982, The Potential Impacts of a Namosl Copper Mine: A Case Study of Assimilation n o Planning, which cited Fiji's Central Planning Office and Bureau of Statistics' SAM printouts. fl> < Notes: Figures may not sum because of rounding. fD H* O Total sample size of 1977 FIJI HIES Is 2,554 households.
a. Not given.
r| b. Includes all utilities (e.g., water). O 00 c. Included In "All others" category. B 240
220
200
180
LU 160
LU 140 UPPER INCOME GRpUP a. N = 8 ui S o 120 a UPPER MIDDLE. INCOME GROUP
100 0<) u UffiAN a 80 -j o MIDDUg fhCQME GROUP z N= 7 UI 60 mm. CO LOWCn M(fiDL€ INCOME GROUP 40 11=9
20 LOWER INCOME GROUP N = 9
INDIVIDUAL LOWER—HOUSEHOLDS-UPPER
Figure 4.1. Distribution of income levels by households.
41
Pacific Islands Development Program East-West Center income group there is a negative cash flow or negative cash expenditures (see Tables 4.13 and 4.14). The negative cash flow is presumably offset by remittances from wage earners in 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 Interest is the role of "Total net subsistence production" for the various income groups. For the Upper income group, its contribution to "Total income" is marginal (4.17 percent). This Increases slightly for the Upper-Middle (15.59 percent), Middle (22.52 percent), and Lower-Middle (26.44 percent), until finally it makes a dramatic jump for the Lower group (50.53 per• cent). Thus, although subsistence production may equalize to an extent the quantity of the total food consumed between income groups, it does not enable the expenditure options that those with higher cash incomes have and can exercise. This Is especially true for the Upper income group. Again, however, this statement must be qualified on the basis of the negative cash flows for the "Unaccounted expenditure" category of the Lower income group, which could Indicate that one expenditure option exercised by higher income levels is the remittance of cash income to the lower income groups (thus, resulting In a net balance or more positive cash flow). This transfer in fact may be somewhat different from what is numerically stated, but It does occur, as do other transfers of goods and services that are more problematic to identify and quantify. Even with recorded and major unrecorded transfers, all things are not equal, and there are inequities in the distribution of goods and services and in the access to them.
A significant aspect inadequately defined by the tables Is the role of local production. In an earlier section, reference was made to the fact that people in rural areas were the main producers and consumers of local goods. Although this has been noted to an extent in the discussion on subsistence production, it did not deal with cash expenditure items such as "Total food expenditure." In this category, 26.2 percent of the Upper Income group's purchases are of local products. This declines from 24.5 percent for the Upper-Middle, to 21.1 percent, for the Middle, to 19.3 percent for the Lower-Middle, to 12.8 percent for the Lower income group. However, the amounts are relative: the Upper group may consume local products at a rate more than double that of the Lower group on a percentage basis, but it also consumes more than two and one-half times more imported food than the Lower group in dollar terms. If "Total recorded cash expenditure" (including taxes) is considered, the Upper group Imports in dollar terms three and one-half times more than the Lower group. Clearly, those who produce to bolster their total income, including subsistence, Import less. This factor Is significant for Pohnpei, where Imports exceed domestic exports by a factor approximating 20.
In both Tables 4.8 and 4.9, electricity has a minor role. What can be determined is that, as expected, expenditure on electricity and total commercial energy increases with income. This Is a function of the higher
42
Pacific Islands Development Program East-West Center Table 4.8. Mean weekly household Income and expenditure by income group and amount
Upper- Lower- Category Upper Middle Middle Middle Lower Total
Group category
Total food 37.78 28.05 29.84 23.25 12.55 25.74 Local protein 6.15 3.82 3.62 2.72 0.54 3.27 Total protein 19.06 10.59 14.79 10.01 6.47 11.87 Local other food 3.75 3.05 2.68 1.77 1.07 2.54 Total other food 18.72 17.46 14.98 13.24 6.08 13.93 Alcohol and tobacco 4.54 0.61 4.12 1.88 2.80 2.79 Total commercial energy 4.23 2.84 3.02 2.28 1.62 2,75 Electricity 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 Transportation 6.19 1.84 4.07 1.72 1.22 2.93 Building 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 Total 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 Total cash expenditure 199.38 108.43 69.50 45.94 20.83 86.20
Income category
Total cash Income 199.38 108.43 69.50 45.94 20.83 86.20 Total net subsistence production 9.56 21.78 21.97 18.63 26.90 19.81 Protein 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 services flows from consumer durables 14.51 4.16 2.05 1.73 2.42 4.92 Imputed rent flows from building 5.99 5.36 4.04 4.17 3.09 4.48 Total 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 Rural 3 1 3 1 6 14
Note: Figures may not sum because of rounding.
43
Pacific Islands Development Program East-West Center Table 4-9. Mean weekly household income and expenditure by income group and percentage3
Upper- Lower- Category Upper Middle Middle Middle Lower Total
Group category
Total food 39.47 49.34 51.32 55.40 47.97 47.13 Local protein 6.42 6.72 6.23 6.48 2.06 5.99 Total protein 19.91 18.63 25.44 23.85 24.73 21.73 Local other food 3.92 5.36 4.61 4.22 4.09 4.65 Total other food 19.56 30.71 25.77 31.55 23.24 25.50 Alcohol and tobacco 4.74 1.07 7.09 4.48 10.70 5.11 Total commercial energy 4.42 5.00 5.19 5.43 6.19 5.03 Electricity 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 Transportation 6.47 3.24 7.00 4.10 4.66 5.36 Building 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 Total recorded cash expenditure 100.1 100.0 100.0 100.0 99.99 99.94 Total 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 Total cash expenditure 100.5 100.0 100.0 100.0 100.0 100.2
Income category
Total cash Income 86.88 77.60 71.24 65.19 39.12 74.66 Total net subsistence production 4.17 15.59 22.52 26.44 50.53 17.18 Protein 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 services flows from consumer durables 6.32 2.98 2.10 2.45 4.55 4.27 Imputed rent flows from building 2.61 3.84 4.14 5.92 5.80 3.89 Total income 99.98 100.0 100.0 100.0 100.0 100.0
Number of households 8 7 7 9 9 40 Perlurban 5 6 4 8 3 26 Rural 3 1 3 1 6 14
44
Pacific Islands Development Program East-West Center Table 4.9 (cont.)
Notes: Figures may not sum because of rounding. a. Percentages for disaggregated categories are derived from Total recorded cash expenditure, not Total cash expenditure. b. Upper group on the basis of Table 4.10 Total recorded cash expenditure excluding $85.00 spent by one household on transport (fuel for fishing). income groups' ability to purchase the tools and appliances that use commercial energy sources. On the other hand, the lower income groups still purchase commercial energy, primarily for lighting. Thus on a percentage basis, more of the Lower group's cash is used to purchase kerosene for basic necessities (e.g., lighting), whereas the Upper group consumes more electricity for both necessities and productive activities, as well as recreation and energy-intensive appliances.
Tables 4.10 through 4.14 detail the income and expenditure patterns of the five income groups* As noted, the value of "Net subsistence production" Increases with decreasing income levels. Also as noted, the amount of "Unrecorded cash expenditure" and "Income taxes" rises with income.
The five Income groups follow a basically similar and predictable pattern for the various expenditure and income categories. Exceptions include (1) "Alcohol and tobacco" where the Lower Income group has mean expenditures exceeding those of the lower-middle and upper-middle groups and (2) "Total recorded cash expenditure," where the Upper-Middle group has a mean expenditure less than the Middle group's. In both Instances the major responsibility can be attributed to the small sample size; or at least It should be until a larger study Is conducted.
A major concern to developing nations is capital formation, which proved highly difficult to assess qualitatively and by value. Savings accounts were few, and the range was significant and often irrespective of income. Thus, what is given under "Consumer durables" is the best approximation for the formation of household capital including goods (but excluding savings). These figures, which follow anticipated expenditures (I.e., rising with income, significantly so for the Upper income group), are rule-of-thumb measurements at best and. are closely corollated with the tables on "Household possessions."
However, the depreciation guidelines were not easily ascertained. Some government officials reported that public-sector vehicles had expected life spans of 18 to 24 months, private-sector vehicles exceeding this period by 50 percent. Although these figures could be pessimistic but would definitely and perhaps unrealistically skew the results,
45
Pacific Islands Development Program East-West Center straight-line depreciation was employed on the basis of an estimated mean purchase value and a more conservative life span (which in the case of vehicles was assumed to be five years). Admittedly, the figures will be far too low for some households (especially upper income groups), but they are the study's best "mean" estimate. A final point on capital formation is that many imported items that could assist cash-generating activities (e.g., outboard engines and vehicles) or socioeconomic functions (e.g., food refrigeration) appear to operate until they break down, at which time their value becomes $0.
Table 4.10. Weekly household income and expenditure—Upper income group
Category Range Mean Median Note
Expenditure category
Total food 20.14 - 54.09 37.78 38.73 Local protein 2.00 - 13.50 6.15 6.19 Total protein 7.75 - 32.04 19,06 17.83 Local other food 0 - 11.65 3.75 3.00 1 zero ob. Total other food 9.25 - 22.09 18.72 19.08 Alcohol and tobacco 0 - 24.36 4.54 1.20 4 zero obs. Total commercial energy 2.60 - 16.16 4.23 3.38 1 HH includes a small store Electricity 0 - 3.25 1.71 2.13 2 zero obs. Water 0 - 0.75 0.47 0.75 3 zero obs. Transportation 0 - 10.00 6.19 7.25 2 zero obs. (85.00) & 1 obv. with $85.00 for fishing adjusted to $10.00 Building 3.85 - 12.82 5.99 5.20 Health 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 Total recorded cash expenditure 85.05 -- 201.77 95.72 92.32 ($106.37 if all trans• portation costs included) Unaccounted expenditure 48.23 -• 150.91 93.98 87.74 (+$10.65 for transpor• tation) Total cash expenditure 140.00 - 250.00 199.38 200.00
46
Pacific Islands Development Program East-West Center Table 4.10 (cont.)
Category Range Mean Median Note
Income category
Total cash income 140.00 - 250.00 199.38 200.00 Total net subsistence production 0.16 - 21.20 9.56 5.71 Protein 0 - 16.68 2.96 0 5 zero obs. Firewood 0.16 - 1.21 1.02 1.21 Value of services flows from consumer durables 4.78 - 26.11 14.51 15.44 Imputed rent flows from building 3.85 - 12.82 5.99 5.20 Total income 180.25 - 310.40 229.48 228.65
Notes: N = 8: 5 perlurban; 3 rural. Figures may not sum because of rounding.
Comparison of Sokehs and Uh
Although the sample size is not large enough to enable statistical comparison of rural and urban areas, an attempt has been made to differ• entiate between Sokehs (perlurban) and Uh (rural). Figure 4.2 shows the mean weekly household income for the two areas. The totals, $117.33 In Sokehs and $117.37 In Uh, Include deficit cash expenditures that would not be added in a cash-flow chart and could represent either credit (from a neighborhood store) or cash received from wage-earning relatives. How• ever, deficit cash expenditures indicate the total resources available to a household.
As the figure suggests, cash income has a larger role on Sokehs, while subsistence production is greater in Uh. Other sources of income such as service flows from consumer durables are slightly higher in Uh. This is somewhat surprising since it is directly related, for the most part, to cash income. However, the values of service flows and Imputed rent Include government-subsidized housing and rehabilitation programs that have increased the amount for Uh. With the exclusion of deficit cash expenditures, the mean total resources available to a household are nearly Identical for the two areas.
Figure 4.3 compares rural and perlurban areas by income group. The figure tends to support Figure 4.2: cash income is higher in Sokehs and subsistence production is higher in Uh. The exceptions for cash income are the upper and lower income groups, where Uh ranks higher; and the exceptions for subsistence production are the upper and lower-middle income groups, where Sokehs ranks higher.
47
Pacific Islands Development Program East-West Center Table 4.11. Weekly household income and expenditure—Upper-Middle income group
Category Range Mean Median Note
Expenditure category
Total food 12.14 36.50 28.05 31.35 Local protein 0 - 16.49 3.82 1.25 3 zero obs. Total protein 6.00 - 21.92 10.59 10.35 Local other food 0 - 8.44 3.05 2.75 1 zero ob. Total other food 8.73 - 25.87 17.46 18.41 Alcohol and tobacco 0 - 4.28 0.61 0 6 zero obs. Total commercial energy 0.75 - 5.00 2.84 3.00 Electricity 0 - 2.50 1.07 0.75 2 zero obs. Water 0 - 0.75 0.54 0.75 2 zero obs. Transportation 0 - 5.00 1.84 1.85 2 zero obs. Building 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 Total recorded - cash expenditure 40.36 72.99 56.85 60.09 Unaccounted expenditure 46.45 - 57.88 51.58 49.91 Total cash expenditure 92.50 —- 125.00 108.43 110.00
Income category
Total cash Income 192.50 — 125.00 108.43 110.00 Total net subsistence production 8.15 34.98 21.78 22.33 Protein 0 - 25.16 5.81 0 c> zero obs Firewood 0.16 - 1.55 1.07 1.21 Value of services flows - from consumer durables 0.95 8.65 4.16 4.32 Imputed rent flows - from building 1.92 9.62 5.36 4.81 Total income 115.37 - 164.04 139.73 140.94
Notes: N a 7: 6 perlurban; 1 rural. Figures may not sum because of rounding.
48
Pacific Islands Development Program East-West Center Table 4.12. Weekly household income and expenditure—Middle income group
Category Range Mean Median Note
Expenditure category
Total food 7.13 49.07 29.84 30.10 Local protein 1.25 - 9.55 3.62 2.48 2 zero obs • Total protein 1.25 - 36.57 14.79 11.46 Local other food 0 7.15 2.68 2.00 2 zero obs • Total other food 5.88 - 27.90 14.98 12.50 Alcohol and tobacco 0 - 10.35 4.12 5.18 2 zero obs. Total commercial - energy 1.80 7.60 3.02 2.55 Electricity 0 - 1.00 0.92 0 4 zero obs. Water 0 - 0.75 0.32 0 4 zero obs. Transportation 0 - 9.50 4.07 2.50 3 zero obs • Building 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 Total recorded cash expenditure 40.16 75.50 58.14 55.00 Unaccounted expen• - diture (-9.91) -- 28.81 11.36 8.03 2 negatives Total cash expendi• ture 59.50 • 80.00 69.50 73.50
Income category
Total cash income 59.50 - 80.00 69.50 73.50 Total net subsis• tence production 6.11 - 44.27 21.97 18.85 Protein 0 33.06 8.23 3.30 1 zero ob. Firewood 1.21 - 1.55 1.26 1.21 Value of services - flows from consumer durables 0.88 5.65 2.05 1.03 Imputed rent flows - from building 2.88 8.13 4.04 2.88 Total Income 71.67 —- 118.52 97.56 100.54
Notes: N = 7: 4 perlurban; 3 rural. Figures may not sum because of rounding.
-49
Pacific Islands Development Program East-West Center Table 4.13. Weekly household income and expenditure—Lower-Middle income group
Category Range Mean Median Note
Expenditure category
Total food 7.59 33.17 23.25 21.84 Local protein 0 - 7.93 2.72 2.33 4 zero obs. Total protein 4.50 14.54 10.01 10.90 Local other food 0 - 3.83 1.77 1.50 2 zero obs. Total other food 3.09 - 20.62 13.24 14.30 Alcohol and tobacco 0 - 5.45 1.88 2.50 4 zero obs. Total commercial energy 0.75 - 4.00 2.28 1.90 Electricity 0 - 1.50 0.36 0 6 zero obs. Water 0 - 0.75 0.58 0.75 2 zero obs • Transportation 0 - 3.00 1.72 1.50 1 zero ob. Building 2.88 - 9.62 4.17 3.85 Health 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. Total recorded - cash expenditure 19.72 54.88 41.97 41.52 Unaccounted expenditure (-13.63) - 25.28 3.98 5.16 2 negatives Total cash expenditure 41.25 -— 50.00 45.94 46.00
Income category
Total cash income 41.25 — 50.00 45.94 46.00 Total net subsistence production 5.31 28.17 18.63 21.46 Protein 0 - 5.80 1.56 0 6 zero obs. Firewood 0.16 1.55 1.24 1.21 Value of services flows - from consumer durables 0.63 5.31 1.73 1.00 Imputed rent flows - from building 2.88 - 9.62 4.17 3.85 Total Income 59.26 — 81.51 70.47 71.85
Notes: N = 9: 8 perlurban; 1 rural. Figures may not sum because of rounding.
50
Pacific Islands Development Program East-West Center Table 4*14. Weekly household income and expenditure—Lower income group
Category Range Mean Median Note
Expenditure category
Total food 2-76 27.81 12.55 11.38 Local protein 0 - 2.80 0.54 0 7 zero obs. Total protein 0.95 - 16.90 6.47 5.60 Local other food 0 3.11 1.07 1.00 4 zero obs. Total other food 1.32 - 10.91 6.08 6.48 Alcohol and tobacco 0 - 6.22 2.80 1.95 2 zero obs. Total commercial energy 1-00 - 2.15 1.62 1.46 Electricity 0 - 0.50 0.06 0 8 zero obs. Water 0 -. 0.75 0.17 0 7 zero obs - Transportation 0 5.00 1-22 0.50 3 zero obs. Building 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. Total recorded cash expenditure 12.78 57.08 26.16 22.24 Unaccounted expenditure (-19.58) - 20.22 (-5.33) (-6-79) 7 negatives Total cash expenditure 8.00 -— 37.50 20.83 20.00
Income category
Total cash Income 8.00 — 37.50 20.83 20.00 Total net subsistence production 15.83 - 46.29 26.90 27.63 Protein 3.75 22.36 12.34 12.80 Firewood 1.21 - 1.55 1.40 1.55 Value of services flows - from consumer durables 0.86 14.20 2.42 1.00 Imputed rent flows - from building 1.92 5.77 3.09 2.88 Total income 27.75 —- 88.28 53.24 54.03
Notes: N => 9: 3 perlurban; 6 rural. Figures may not sum because of rounding.
51
Pacific Islands Development Program East-West Center 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 S= Sokehs U = Uh
I I Deficit (cashl expenditure 200 =1 Other |imputed| income
J Subsistence production 175 Cash income
£15 O o c 2 125
(0 100
>> 2 <1> 75
50
25
UPPER UPPER MIDDLE LOWER LOWER TOTAL MIDDLE MIDDLE Income Group
Figure 4.3. Mean weekly household income by location and income group.
53 Pacific Islands Development Program East-West Center Interestingly, however, for all income groups the total resources available to a household are higher In uh than in perlurban sokehs. Again, considerable caution should be used In reading these figures because the sample size Is small. It is also too small to extrapolate yearly gross income per capita values, $923 per person per year on Sokehs and $826 In Uh (excluding deficit cash expenditures), to higher levels of aggregation such as Pohnpei State as a whole.
Even If the data were accepted as being representative (hence supporting conclusions such as rural households make more use of their resources), the main issue revolves around the quantity and quality of the resources available. Whether in rural Uh or perlurban Sokehs, households in the lower income groups do not have sufficient cash income or total income resources to provide many options to their expenditure behavior. In other words, cash expenditures are relatively fixed, with few substitu- tability options. This has significant implications with respect to an introduced technology such as electricity that requires considerable cash expenditures if a household Is to maximize end-use options.
Distribution of Income
Figure 4.4 and Table 4.IS present data on the distribution of income between income groups. As both the Lorenz Curve and the table indicate, the Upper income group receives a disproportionate share of cash income. The Lower income group reflects the Inverse of this relationship. Only the Upper-Middle group and, to a lesser extent, the Middle group have similar percentages of cash income and population. Owing to the limited size of the Uh sample, measurement has been limited to the total sample.
The Glni coefficient of 0.47 is somewhat higher than expected. Jackson (1981), in his study of income distribution in Papua New Guinea, determined that all geographical areas and employment sectors had coeffi• cients of less than 0.4000. Stavenuiter (1983) adjusted Fiji's Household Income and Expenditure Study (HIES) (see Table 4.7) to reflect more accu• rately unreported business Income, which resulted In a coefficient of 0.482 for urban areas, the only classification approximating that for Pohnpei. However, it must be stressed that the measure for Pohnpei could be misleading because It is based on cash income and does not reflect remittances or transfers of cash between income groups. Given the large amounts of unaccounted cash expenditure for the higher income groups and the deficit expenditures for the lower, transfers could be substantial.
As a simplistic measure of the distribution of opportunity, higher education (high school diploma and above) has been related to income groups in Table 4.16. The data clearly show that the upper income groups have a disproportionate share of those attaining higher educational levels. Without a discussion on which is the cause and which is the effect (income or education), it could be concluded that the upper groups are In a better position to maintain their incomes and to capture future opportunities. As an increasing number of persons with higher education
54
Pacific Islands Development Program East-West Center 100
Cumulative % of Total Income
90 100
Cumulative % of Total Population
Figure 4.4. Lorenz Curve of income distribution.
55
Pacific Islands Development Program East-West Center Table 4.15. Distribution of cash income by income group
% of Total Mean weekly HH cash Income Income group ($) Population 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
Total 86.04 100.01 100.00
Note: Gini coefficient » 0.4702.
Table 4.16. Income levels and higher education
HHS Population with Total Persons/ high school Income group Uh Sokehs Total Population 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%)
Total 14 26 40 238 (100.0%) 6.0 25 (100.0%)
56
Pacific Islands Development Program East-West Center enter the job market and as more technologies (e.g., microcomputers) are introduced, higher education will become increasingly important.
Other Household Characteristics
The value of household possessions is given in Table 4.17. As the table indicates, the value rises with Income level. The exceptions to this rule are found In the Lower income group. These households have received assistance from a federally funded (U.S.) rehabilitation program or from relatives. Those persons in the higher value ranges often possess a vehicle, a refrigerator, an outboard engine, or a stereo. A household in the Lower income group may own as little as $50 worth of kitchenware and cutlery, whereas those in the Upper may own hundreds of dollars' worth of these items.
Table 4.18 shows the number of households reporting various items. As the table suggests, electrical appliances are found in the area that has had electricity for several years, that is, Sokehs. The radios reported in Uh are battery powered. Regardless of the power source, radios are the single most popular item, followed by kerosene lanterns and kerosene stoves. Sewing machines are also fairly common, especially in rural Uh.
Table 4.19 describes the type of house construction by income group. As is shown, as income rises, imported materials become more common, with concrete block construction being the most popular in the upper groups. For those in the lower groups with concrete block houses, it must be noted that these houses have been financed via a U.S. old-age program.
The typical house has from one room for a nahs (traditional house made from indigenous materials) to three or four rooms for a concrete structure. Almost all houses have separate cook houses or sheds. Simi• larly, all (except two) with piped water have outside shower-type bathing facilities. Every house has outside toilet facilities, usually located in the mangroves.
Piped water is usually outside the house. Although common in Sokehs, it is rare in Uh where rainwater and wells are more common as potable sources. In both areas streams play major roles In the washing of clothes, as well as for bathing In Uh. Wastewater disposal is on the ground.
The toilet facilities are basically outhouses (benjo) in the mangrove swamps, flushed by tidal action. In the more densely populated Sokehs, this could pose several major health problems; and It should be added that there Is cholera In the State of Truk. Mangroves and tidal flats are also repositories for rubbish disposal. In addition, households have a nearby area In which to dispose of rubbish.
57
Pacific Islands Development Program East-West Center Table 4.17. Value of household possessions by income group and study area
Nunfcer of households Averages, value of\lncooe Upper Upper-Middle Middle Lower-Middle Lower Total 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 reporting selected items
Item Uh Sokehs Total %
Kerosene lantern 26 8 34 65 Kerosene stove 19 12 31 60 Electric hot plate - 2 2 4 Electric stove - 5 5 10 Radio 18 17 35 67 Stereo 1 5 6 12 Television - 5 5 10 Sewing machine 15 6 21 40 Electric refrigerator - 9 9 17 Kerosene refrigerator 4 - 4 8 Electric freezer 1 — 1 2 Kerosene freezer 1 - 1 2 Electric fan - 6 6 12 Air conditioner - 2 2 4 Electric washer - 2 2 4 Canoe 5 6 11 21 Boat 4 2 6 12 Outboard motor 5 3 8 15 Motorcycle - 2 2 4 Bicycle 1 - 1 2 Vehicle 8 4 12 4
Note: N = 52.
Lot size seems to depend more on location than income. On Sokehs, lots are relatively small and landholdings are at the most one acre. Rural Uh has larger lots, and landholdings can be up to five acres. A database on landholdings and land use is being developed but Is still unavailable. This fact, together with the cultural characteristic of not discussing or disclosing the location and type of agricultural land use, eliminated the opportunity for detailed analysis.
59
Pacific Islands Development Program East-West Center Table 4.19. Type of housing construction by Income group and study area
Upper Upper-Middle Middle Lower-Middle Lower Total Type \lIncomi e of house\ group Uh Sokehs Total Uh Sokehs Total Uh Sokehs Total Uh Sokehs Total Uh Sokehs Total Uh Sokehs Total
Nans (traditional) - - - - 1 122 4-4 462 8 89 17
Wood and tin 1 2 3 - 3 3 - 1 1 - 3 3 I 9 10
Concrete 23 512 311 211 2-1 1 58 13 o Total 35 816 734 718 963 9 14 26 40 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 Chapter 5- HOUSEHOLD ENERGY
This chapter presents household energy data in the framework of the two study areas, Uh and Sokehs, and the five income groups detailed in chapter 4. With respect to assessing the impact of electricity on culture and socioeconomic development, the data are inconclusive. This is due to the heavy subsidization received by electricity consumers and to the limited geographical, and hence economic, area near the capital that has been provided with electricity. The consumption patterns that have been Identified are not surprising and appear to be closely linked to income levels.
End-use (of electricity) patterns appear similarly to be linked to income. This trend is noticeable as no connection seems to exist between electricity and socioeconomic development. In any relationship that might appear, it has not been possible to isolate electricity from a host of other factors including educational achievement and Income levels, nor to establish a cause and effect relationship. Thus the data suggest that electricity, especially at artificially low rates, may facilitate the purchase of consumer goods, such as stereos and televisions, which also have comparatively low import duties. This could be the major impact on culture, although electricity cannot be determined as the cause.
The first section of this chapter discusses energy used for cooking. This is followed by a section on household lighting. The third and fourth sections highlight household energy use and electricity consumption in Sokehs.
Cooking
Table 5.1 Indicates that most households use a variety of fuel sources. Nearly all of the households use the traditional uhmw (an earthen oven, similar to the Fijian lovo and Hawaiian imu), usually during the weekend and for feasts. Wood Is used to boll water (e.g., for rice and breadfruit), with the cash expenditure sources (kerosene and electricity) reserved for the meal's main dishes. Only three households had the convenience of not having to collect firewood or to build and tend a fire; In other words, they cooked only with electricity or kerosene, which had priority over reduced cash expenditure.
Cooking with wood commonly Is done over an open fire that is surrounded by rocks arranged in such a manner as to enable the use of pots and pans. As described earlier, 8 to 10 kg of firewood are collected per person per hour with 30 to 35 kg of firewood collected per household per week. In larger households, the amount collected per week can easily double.
Weekly expenditures on kerosene for cooking usually range from $1.80 to $3.80, or 1 to 2 gallons, per week. Kerosene costs $1.80 per gallon on
Pacific Islands Development Program East-West Center
y Table 5.1. Number of households by energy source for cooking
Energy source Uh Sokehs Total
Electricity + kerosene + wood + uhmw - 2 2 Electricity + wood + uhmw - 2 2 Electricity + uhmw - 3 3 Kerosene only 1 - 1 Kerosene + wood + uhmw 19 10 29 Wood only 1 1 2 Wood + uhmw 5 8 13
Total 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 retail outlets. Kerosene stoves can also be given as gifts or as a family or traditional obligation, or simply passed on among family members.
Electric stoves range in price at retail outlets from $500 to $865, although one household reported a $300 cost. The average electric stove uses approximately 100 kwh per month (Smith: 1983) or costs $3.00 per month to operate at the current tariff. This value is relatively similar to that of the average 120 to 140 kg of firewood collected per month per household, which, when valued at $0.03/kg gives a nonmarket value of $3.60 to $4.20 per month. The slight difference between the electric stove and the use of firewood in operating costs can be accounted for by the present tariff rates. Also, those without substantial cash income can afford neither to purchase nor to pay for the operating cost of a stove. Hot plates, ranging in price from $47.50 to $88.24, are also utilized but to a lesser extent than electric stoves (three households had hot plates and five had stoves).
Table 5.2 describes energy used for cooking by income group. Noticeable is that electricity as an energy source for cooking is predom• inately used by the higher income groups, although these groups In Uh use kerosene. The middle and lower Income groups also use kerosene, but a number of households use only firewood.
As It could be argued that electricity is an inefficient form of cooking in Pohnpei, two questions arise:
62
Pacific Islands Development Program East-West Center Table 5.2. Energy source for cooking by income group, study area, and number of households
Upper Upper-Middle Middle Lower-Middle Lower Total \Income rr vv EnergyX group — source \area Uh Sokehs Total Uh Sokehs Total Uh Sokehs Total Uh Sokehs Total Uh Sokehs Total Uh Sokeh Total
Electricity • kerosene + wood + uhmw
Electricity + wood + uhmw 1 1
Electricity • uhmw 3 3 ON Kerosene only 1 - 1
01 pi Kerosene + wood 1 - 1 1 - 1 CD O rt h* I Hi Kerosene + wood aa H- (D O + uhmw 1 4 5 1 3 4 8 10 18 CO ft M Wood only 1 1 n CO (T> 0) Wood + uhmw 1 4 4 4 8 12 rt (D CD Total 1 8 14 26 40
o OQ 3 1. With the increased distribution of, or access to, electricity, will those in the higher income group in the rural areas switch to cooking with electricity if conservation measures such as increased tariffs are not implemented?
2. If wood is a more desirable cooking fuel from a macroperspective, what is being done to facilitate Its efficient use?
Although the data generally indicate that a range of fuel sources is utilized, it should be apparent that only certain Income groups are using electricity for cooking. For example, people in the upper income groups who cook with electricity have attained higher educational levels, have often traveled beyond Pohnpei and the FSM, and are often employed in the public sector, which means exposure to air conditioning, photocopy machines, etc. Even though these general patterns can be ascertained, it is difficult to assess why an individual household would decide to use electricity for cooking. None of the people of the households in the survey lives in confined apartments. For those with access to elec• tricity who do not use it for cooking, the reason appears more obvious— insufficient money.
Lighting
On Sokehs the most common energy source for lighting is electricity. Of the nine households using kerosene, seven fall Into the lower income groups. It should also be noted that four households using electricity have run extension cords from neighboring residences or buildings.
If the Uh and Sokehs figures given in Table 5.3 are compared, It could be assumed that Uh residents will use electricity in a manner similar to that in Sokehs. However, as Uh is a rural area with fewer cash income-earning opportunities, will they? Again, it is difficult to accurately ascertain or predict an individual household's consumption behavior. Comments such as "not enough money" have to be considered in light of a $10 charge for hookup, $10 to $15 for minimum wiring (e.g., one or two light bulbs), and a monthly bill of $1 to $2. As the Income and expenditure data presented in chapter 4 suggest, there might not be enough money. Other reasons could be present such as lack of familiarity with, or exposure to, electricity.
Energy Use on Sokehs
Table 5.4 restates data from the preceding two sections concerning Sokehs. As indicated, electricity is the primary source for lighting. For cooking, kerosene is common to all but the Lower Income group's, and use of wood predominates here. Electricity, as a source for cooking, is found only in the upper income groups, with one exception.
Other uses of electricity are reflected in Tables 4.17 and 4.18 on household possessions. Typically, a household will have only one or
64
Pacific Islands Development Program East-West Center Table 5.3. Household energy source for lighting by area and number of households
Energy source Uh Sokehs Total
Electricity 1 17 18 Kerosene 25 9 34
Total 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 Total
Cooking With electricity 4 2 0 1 0 7 With kerosene 1 2 4 3 0 10 With wood 0 2 0 4 3 9
Total 5 6 4 8 3 26
Lighting With electricity 5 5(E) 3 3(2E) KE) 17 With kerosene 0 1 1 5 2 9
Total 5 6 4 8 3 26
Notes: E D extension cord; hence (2E) means that two of the! three house- holds were supplied with electricity from neighbors; similarly (E) means that one of the households shown is supplied with electricity by a neighbor. two outlets; yet some households have as many as eight outlets. One anticipated benefit of electricity is an increase in studying by students. Data on the use of time tend to support this premise, as Sokehs's students appear to study more than Uh students. But is this a result of electrici• ty, the higher value given to educational achievement in Sokehs, generally higher levels of educational achievement on Sokehs, or a combination of all of these? It seems impossible to separate these and to state with certainty that electricity (or any of the others) is the sole cause.
65
Pacific Islands Development Program East-West Center Most radios continue to be battery powered, although this is changing on Sokehs. Televisions and other appliances such as fans have also gained acceptance. Electric refrigerators are found in 35 percent of the Sokehs households, compared to 15 percent with kerosene refrigerators in Uh. Kerosene for a refrigerator costs approximately $8.00 per week, a signif• icantly higher operating cost than for electric models at approximately $0.75 per week.
The cost of purchasing an electric refrigerator ranges from $399 to $745. Kerosene refrigerators cost from $600 to $850. Although the current tariff rates skew the analysis, given the wide difference between both operating and purchase costs, the use of electricity for refrigera• tion would seem a logical choice by the consumer.
Electricity Consumption on Sokehs
An attempt was made to assess electricity consumption In the study areas. In Uh, which was recently connected, there was only one consumer, a combination small store and pool hall, which used roughly 330 kwh/month. On Sokehs past meter records (from November 1980 to March 1981) did not always match corresponding monthly bills. Some households also had major variations In their monthly bills. Given these constraints, the data presented below should be treated as an indication of the magnitude of consumption.
Table 5.5 shows average monthly consumption for all metered consumers for the period November 1980 to March 1981 (the most recent records avail• able). On the average, the 67 metered consumers used 222.8 kwh/month. When the four businesses, two churches, and one multiple residence are excluded, the mean is 194.9 kwh/month. The businesses are small retail stores, a laundromat, and a small cinema, with one meter serving, for example, both a retail store and the cinema. As the figures indicate, 50.8 percent of the consumers use between 150 to 299 kwh/month. This range is similar to that for all residential consumers in Pohnpei State (Table 3.3). Lloyd et al. (1982) found only 11.9 percent of consumers in the Nadi-Lautoka (Fiji) study in this range, while Fiji Electricity Authority records showed 10.6 percent (cited by Lloyd et al.). Most Nadi-Lautoka consumers use less than 100 kwh/month. This contrast pro• bably reflects the difference in tariff rates between Fiji and Pohnpei.
Table 5.6 shows the electricity consumption for study households on the basis of monthly bills. Mean consumption Is 211.8 kwh/month, which Is considerably less than the Pohnpei State mean for residential con• sumers (328.9 kwh/month), but somewhat similar to SokehsTs figures (222.8 kwh/ month for all consumers and 194.9 kwh/month for residential consumers only).
As the table Indicates, electricity consumption generally increases with income. The Middle group is an exception because mean consumption is below that of the Lower-Middle group. However, the table also shows
66
Pacific Islands Development Program East-West Center Table 5.5. Mean monthly electricity consumption on Sokehs Island: 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 Business = 289.8; 2 churches = 274.8, 205.8 300 - 399 11 (16.4%) 341.5 2 businesses = 345.6, 390.6 400 - 499 2 (3.0%) 420.8 500 + 2 (3.0%) 863.9 Business =» 1,065.4; multiple residence D 662.4
Total 67 (100.1%) 222.8 4 businesses s 522.9; 2 churches s 240.3; multiple residence a 662.4; excluding these 7 consumers* mean = 194.9.
Source: State Department of Resource Conservation and Surveillance: 1983. Raw Data from Records. Pohnpei.
that there Is a considerable range of consumption levels within an Income group. Thus, it would appear that given current tariffs, the choice by the individual household to consume electricity at varying levels (e.g., 100 or 200 kwh/month) may be nearly as important a factor as income In determining use.
Figure 5.1 shows the relationship between the value of all household possessions* and electricity use. As indicated, there is a general trend Income. For the Lower group, the value of household possessions is low but higher than that of the next two income groups. This could reflect social welfare programs (e.g., rehabilitation of an injured worker who
^Household possessions include all consumer durables, whether, for example, an electrical appliance, an outboard motor, or furniture.
67
Pacific Islands Development Program East-West Center cannot return to his previous job and has been given a boat and motor for fishing), which skew the data. It could also reflect a decision by households, for example, In the Middle group, to direct cash expenditures to other items such as education and transport.
The Lower income group has the lowest level of electricity consumption. The end use is primarily for lighting. For the other groups, electricity use and the value of household possessions appear to have a parallel relationship that begins to converge with higher incomes. Those with higher incomes often own major items such as vehicles, which do not use electricity.
Table 5.6. Electricity 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
Total 17 71.6 - 464.1 211.8 142.7
68
Pacific Islands Development Program East-West Center
Figure . Value of household possessions and kwh consumed per month by weekly household cash income.
Chapter 6. POLICY QUESTIONS
This chapter discusses major policy questions identified by this study. Several key Issues are present throughout:
. Heavily subsidized tariff rates
• Absence of clear electrification policy and objectives
. No identifiable relationship between electricity and socioeconomic development
. An apparently emerging stratification of society based on the ability to consume (I.e., to purchase imported consumer goods and electricity)
The first policy question concerns what the community perceives as its priority needs and the community's role in determining that need. On Sokehs, which is becoming more densely populated, sanitation has to be a high priority. There are simply too many people in too small an area not to have a sewer system. The experience with cholera in Truk, 300 miles distant, should not be ignored. In less densely populated Uh, tidal flush may still be appropriate. However, as Table 6.1 indicates, in both Uh and Sokehs, sanitation was perceived by residents as a high priority (number two on Sokehs, number three in Uh).
Water was described as the number one priority in Uh and number three priority on Sokehs. Although some could argue that these values reflect the recent and severe drought, area residents are also stating a reality: Pohnpei has a high rate of rainfall and yet experiences periods of water scarcity. Furthermore, it is a matter of not only quantity but also quality as Uh does not generally have secure water supplies.
Improvement of roads was the first priority in Sokehs and fourth in Uh. Community cooperation was perceived as the third priority in Uh. Three households In Uh indicated that there was no need for additional community projects, while five households had no response to the question.
What priority was given to electricity? Only two households (out of 52) in Sokehs included electricity as one of the three highest priority needs for their community. These households are electricity consumers. As the table shows, the study population perceived community needs to be other than electricity.
Regarding community participation and input into the planning process, one of the study enumerators, a lifelong resident of Uh, com• mented that his community had never had open community-wide discussions of its development needs. On the other hand, discussions have been held In Sokehs during recent years on issues such as a water-supply system.
Pacific Islands Development Program East-West Center This points toward a situation where the decision to electrify is by central government agencies, with only limited input by those who will be ultimately affected.
The second policy question deals with education on the use of electricity. Comments by the study population such as "it's dangerous reflect lack of familiarity with electricity.
Table 6.1. Priority community needs as perceived by study households (% of households)
1st priority 2nd priority 3rd priority Total
Area and Wl th W/ out Wi th W/ out Wi th W/ out Wi th W/ out priority needs elect, elect, elect, elect, elect, elect, elect, elect. Total
Sokehs Road 47 67 25 0 17 0 34 32 33 Sanitation 24 11 58 43 33 33 37 26 33 Water 18 22 8 43 50 33 20 32 24 Electricity 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
Total 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 Sanitation 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
Total 100 99 100 98 Number 18 7 4 29 No projects needed - no. 3 3 No response needed - no. 5 5
72 Pacific Islands Development Program East-West Center Table 6.1 (cont.)
1st priority 2nd priority 3rd priority Total
Area and With W/out With W/out With W/out With W/out priority needs elect, elect, elect, elect, elect, elect, elect, elect. Total
Total Road 32 15 15 24 Water 50 19 31 37 Sanitation 14 42 23 24 Cooperation 0 8 8 4 Housing 0 8 8 4 Education 0 4 0 1 Electricity 5 0 0 2 Youth center 0 4 0 1 Communication 0 0 8 1 Reduce speeding 0 0 8 1
Total 101 100 101 99 Number 44 26 13 83 No projects - needed no. 3 3 No response - needed no. 5 5
To date, the only de facto education campaign has consisted largely of the "demonstration effect": people following in the footsteps of those who have electricity. Those who have had electricity for longer periods of time are in the higher income groups, often senior civil servants or expatriates in government housing (which includes hot-water heaters, air conditioners, and electric stoves). Is this the desired model? When someone is given an unfamiliar tool or job, It Is usually accompanied by some training. This has not occurred with electricity as the emphasis has been given to supply.
A third policy question concerns tariff rates. At present the population of the entire state is subsidizing upper Income consumers while no more than 25 percent of the state's population have physical access to electricity and only 10 to 15 percent are actual consumers. The oppor• tunity costs to the development of economic resources (e.g., human and natural) and the provision of priority services (e.g., secure water and sewage) are high and will increase with grid extension if tariffs are not raised substantially.
73
Pacific Islands Development Program East-West Center If tariffs are increased, a subset of questions emerges concerning the effects on various user groups. The commercial sector would presum• ably pass on tariff increases to the shopper, which would limit the purchasing power of lower Income groups, especially in cash-poor rural areas. Because store owners would have higher expenditures, they might have to limit credit in order to maintain sufficient cash flows.
With respect to residential consumers, the lower income groups could benefit from lifeline rates. New low Income consumers could also benefit if basic reticulation (hookup and wiring) costs were recovered over a 12-month period rather than paid at one time. This would also make elec• tricity more attractive than kerosene for lighting as weekly cash expen• diture would be reduced. Without such measures to assist lower Income groups, it might be difficult for them to become electricity consumers.
Figure 6.1 considers the impact of a tariff rate of $0.248/kwh on unaccounted cash expenditure and deficit cash expenditure. Although the individual consumer could choose to divert expenditures from other items (e.g., food and entertainment), which implies altered expenditure patterns, a consideration of the impact on unaccounted cash expenditure provides a gross indication of how much current patterns will have to change. As the figure shows, the higher income groups have sufficient unaccounted cash so that current expenditure patterns would probably not be affected. The Middle income group would have its purchasing power substantially reduced, as would the Lower-Middle group. Given that the lower groups would have deficit expenditures, what adjustments would they make?
Several options are available to the lower income groups including diverting funds from other expenditure items, reducing electricity use, and finding additional sources of funds or credit. Although this study has not been able to adequately identify transfers of cash, goods, and services among income groups, it could be assumed that a portion of the higher Income groups' unaccounted cash expenditure Is transferred to relatives In the lower income groups, especially to those in rural areas. If this assumption is correct and if tariff rates are increased, this would mean that only the two higher Income groups would be able to continue to transfer cash without altering current expenditure patterns.
With respect to equity, it would appear then that, given the limited cash resources of lower income groups, the lifeline rates and recovery of basic reticulation costs over a longer period, say 12 months, are necessary. If these (or similar) steps are not taken, those in the lower income groups will have to change their expenditure patterns and those in the higher Income groups might also have to change theirs. These changes could affect transfers of cash. Although this may seem to contradict the statement that upper Income groups have sufficient funds so that their current expenditure patterns would not have to change to meet increased electricity costs, it is not necessarily a contradiction because those in the higher income groups may be asked to provide more cash to lower income
74
Pacific Islands Development Program East-West Center i 1 110 E 100 (0 £ 90
•a c 80 sills a> a x 70 a> 60 i C/> o£2*i $ co o 50 TJ M Lfl c 40 1 3 CD 0) O ! co n o 30 rt H- i I ^ o i (0 s: H. i c 20 fD n 3 1 / c? CO l rt H >> CO •= 10 j O (—1 2 fD pi d> 3 3 rt D-. fD CO i a ••••••I L INEC. fD « -10 A fourth policy question concerns whether or not electricity consumption patterns should be changed. The state has proposed several renewable energy projects that could stabilize the cost of producing electricity, including the import bill for diesel fuel to generate power. With respect to reducing costs through conservation, there does not appear to be an implementation program to meet the objective "to educate the general people of Pohnpei in the wise use ... [of electricity]" (OPS-FSM: 1981). The absence of an implementation program is cause for concern because conservation measures could provide immediate and long-term savings that are as important as the renewable energy projects. Although this cannot be quantified at present, several observations can be stated: . A number of households seem to leave lights on and appliances running without apparent reason. . Only a few energy audits have been made of commercial and public- sector consumers and their end uses of electricity. Thus data on which to base conservation policy are limited. . Present and proposed import tariffs do not reflect consumption by electrical appliances. Thus an appliance such as an electric stove, which can be both a high and an inefficient user of electricity, negatively affects the trade imbalance through its initial Import and through its added use and misuse of electricity. This can also affect the individual household that may not be aware of the potential savings made possible by energy efficient appliances. To address this problem, consideration should be given to differential tariffs for various types of appliances based on mean consumption (e.g., one tariff for electric stoves and another for radios), or tariffs based on the energy efficiency of a particular appliance. Any conservation program will be dependent on realistic electricity tariffs. A public education campaign through the school system and on the radio could also facilitate conservation. The cost of Implementing a conservation program could be low and the potential savings substantial. Unless such measures accompany grid extension, it might be assumed that the currently unproductive patterns of electricity use will also occur over a larger geographic area. A final policy question is who receives the electricity. Beyond the grid extension, It Is not clear what the policy is on rural electricity: Should the extension of grid around the main island be continued? Should all households have access to the grid? Should systems be established on the outer islands? To what end will electricity be used? 76 Pacific Islands Development Program East-West Center As previously discussed, the study communities perceived priorities higher than that of electricity. However, the communities did indicate that they liked or wanted electricity. Thus decision makers have res• ponded affirmatively to people's aspirations even if community input has been limited. It is not clear, however, what other development projects people would be willing to give up in order to obtain electricity; nor is it clear how they intend to use electricity. If, for instance, the policy Is to provide all Income groups with access to the grid through lifeline tariffs, then presumably the Intended end use would be primarily for household lighting. Similarly, If economic development is an intended objective of rural electrification, will tariff incentives need to be offered? With these types of questions unanswered, it is difficult to determine what the impact of electricity has been and will be beyond the data that indicate that higher Income groups consume more electricity. Under the current tariff structure, lower income groups bear this cost because of the diversion of development funds. The data also suggest that those with the means (e.g., cash Income and education) to use electricity do so. However, there does not appear to be a direct cause and effect between, say, electricity and higher levels of educational achievement. This statement is similar to the conclusion by the Asian Development Bank (ADB: October 1983) that cause and effect relationships are unclear and that attempts to relate, for example, rural electrification to socioeconomic development have not been completely successful. In short, too many factors are at play in a dynamic situation, and it is not possible to Isolate them successfully. The statement that "those with the means to use electricity do so" is, in one sense, stating a truism. From another perspective, however, an implicit statement is being made that stratification exists in Pohnpei State, that is, some people do not have sufficient Income. It appears that levels of electricity consumption reflect access to cash-earning opportunities and consumption levels of consumer Items, few of which are used to increase economic production or the quality of life (although this is arguable, e.g., an electric stove could make life "easier"). Electricity may not be the cause, but its low cost facilitates purchase of consumer goods by upper income groups. Stratification on the basis of consumption levels could well be exacerbated without, for example, Increased electricity tariffs and higher duties or imported nonessential goods. However, It also seems that policies to Improve life for lower income groups in the rural areas are necessary and should include electricity with respect to specific end uses such as lighting. Policymakers have to weigh the consumption by upper income groups against the improvement of the quality of life for the majority of the population of Pohnpei State. 77 Pacific Islands Development Program East-West Center Appendix A: THE ECONOMY Pohnpei's and the FSM's economy can best be described as being dominated by public-sector wage and salary employment, by the import and distribution of consumer items (including food), and by unknown subsis• tence production. Thus the economy could be termed "dualistic" or "false." The false nature of the economy is reflected by the fact that almost no local production exists, except for the unquantified subsistence sector. It is also Indicated by the comment made by Nevin (1977, as cited in Connell, 1983): "One of the least developed nations on earth has been encouraged to see itself in terms of the richest, most highly developed on earth.... This unreality ... is at the heart of the Micronesia dilemma." In most developing Pacific Island nations, It is possible to conduct both descriptive and critical analyses of a nation's economy on the basis of data that have been generated by, for the most part, local Initiatives or assistance from international agencies such as the Asian Development Bank, the International Monetary Fund, and the South Pacific Commission. This is not the case with the FSM and Pohnpei State. Data on the value and quantity of sectoral production and inflation, for example, are not available; moreover, complementary analyses of such things as the impact of the U.S. inflation rates have not been conducted. In other words, the "false" and "unreal" notions mentioned above are facilitated and exacer• bated by the lack of a database that Is common to other Industrialized and developing nations. The reason for the lack of data Is moot. What Is significant is that an emerging independent nation has to make major decisions on economic policy and the allocation of limited resources and to chart Its development "blind" to its past successes and failures, Its strengths and weaknesses, and its opportunities. The absence of data should be considered as one of the critical economic issues of a nation's first decade.* The Monetized Sector Table A.l estimates the value of monetary Income In Pohnpei for 1980 on the basis of the best available data. As the table demonstrates, wages and salaries, largely financed through U.S. subsidies and grants, are the major source of monetary income. Although wage and salary Income are concentrated in a minority of the population (urban), remittances *Barry Shaw's "Smallness, Islandness, Remoteness and Resources" in Regional Development In Small Island Nations (UNCRD: 1982) discusses the advantage that Small Island Nations (SINs) have In developing statistical bases and making decisions because of their smallness. Shaw also points out that It is crucial for SINs to have adequate databases If they are to be able to respond quickly to situations that could be destabilizing or could increase their vulnerability. Pacific Islands Development Program East-West Center and exchanges with non-money-earning family members (rural) could be considerable. Wage and salary rates are high in the U.S.-financed public sector and could be dampening the development of a private sector as skilled personnel seek public sector employment (for higher wages). This deprives the private sector of an essential resource, a skilled work force. Table A.l. Money income: 1980 (US$) Source Amount Total Wages and salaries 12,634,619 Micronesian 11,581,171 Expatriate3 1,053,448 Business profits** 1,153,984 Exports (f.o.b.) 831,641 Copra 469,223 Coconut manufacturers 111,755 Handicrafts0 239,873 Pepper 10,790 Trochus shell - no season - Local agricultural production** 85,163 Total 14,705,400 Sources: OPS-Pohnpei: 1983. Draft. Pohnpei State Development Plan; Pohnpei State Statistics Office: 1982. 1981 Pohnpei State Statistics Yearbook. Author's estimates. Notes: Some effort was given to developing an accounts summary (e.g., Gross Domestic Expenditure or Gross Domestic Product) without success due to the lack of data or, in several instances, possible inaccuracies. a. Expatriates earned $2,106,896.00 in 1980, spending an estimated 50% of income in Pohnpei. b. Business profits based on an estimated 15.2% of Gross Business Revenue being retained within Pohnpei. c. No assessment is possible of sales of handicrafts locally, including local purchase by tourists. d. Value of locally produced vegetables and fruits paid to producers for items to be sold in Kolonia. 80 Pacific Islands Development Program East-West Center Local agricultural production is considerably higher than shown in the table because the value of purchase by retailers outside of Kolonia is not Included. Also not recorded are the local sales of fresh fish and other marine and forestry products- To some extent, these factors have been compensated for by the "Business profits" category. As the table indicates, the value and range of exports from Pohnpei are limited. Aside from handicrafts and coconut manufactures such as soap ($99,438.00 in 1980; OPS-Pohnpei: 1983), forward processing is negligible. Of note, however, is that the so-called "village economy" is the source for almost all of the value of export production. Thus, a situation exists whereby the relatively low-paid and low-import consuming "village economy" pro• duces for export, whereas the high-paid and high-import consuming wage and salary (largely public) sector produces nothing for export. This is a major equity issue as a large portion (wages and salaries) of the public sector's expenditure is indirectly allocated to nonproductive import consumption causing a high opportunity cost to the productive sectors. In this vein, the Western Samoan economist Ian Fairbairn (1982) discusses both the continuing strength of the rural sector ("village economy") in Pacific nations and its neglect by urban-biased planners. He specifical• ly notes that in Guam, New Caledonia, and American Samoa, all under the control of Industrialized nations, "rural neglect is conspicuous." The FSM economy should be considered from that perspective. The "Village" Economy Table A.2 describes data taken from what is commonly referred to as the Ag Census 1978-1979 (1981). Although these are the only, and hence best, data available on rural production, they must be used with considerable caution for the following reasons: . The survey estimated that there were 1,905 rural households in the State of Pohnpei. • The survey attempted to Include 140 households (approximately 7.5 percent of the total). . The survey of 120 households (roughly 6.5 percent of the total) was considered to be more than adequate. • In the end, the survey included a total of only 14 households (less than 0.7 percent). . Comprehensive Income and expenditure data were obtained from only six households. Thus the figures for the entire state have been extrapolated on the basis of a less than satisfactory sample size. However, the figures are probably Indicative of the role of the "village," "traditional," "subsistence," and "rural" economy. As shown 81 Pacific Islands Development Program East-West Center Table A.2. Value of consumption of the traditional-sector State of Pohnpei: 1980 Total 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 Total 12,082,296 100.0 5,905 701 Source: Ag Census 1978-1979: 1981. OPS-TTPI. Notes: "Traditional sector" and "village economy" are used interchangeably. USDA = United States Department of Agriculture. in Table A.3, the Ag Census gave the following values to nonmarketed production by rural households: The production of nonmarketed goods probably leads to significant exchanges between rural families and wage and salary earners. Data are not available, but it could be assumed (see chapters 4 and 5 for discus• sions on transfers) that cash Inflows are considerable from those employed In the monetized sector to rural areas, as well as the outflow of non- marketed products to the monetized urban area. This relationship bene• fits both sectors as wages and salaries are augmented by locally produced goods, especially food Items; In addition, people In rural areas have increased purchasing power. Imports Rather Than Trade The value of total and selected commodity imports into Pohnpei are shown in Tables A.4 and A.5, respectively. As expected of a non- petroleum-producing nation, mineral fuels (31.2 percent in 1982) consti• tute the largest single import group (SITC section). The percentage share of food in the import bill (26.2 percent In 1982) when compared to other Pacific nations such as Fiji (14 percent in 1981; CES: October 1982) and the Solomon Islands (10.7 percent in 1981; ADB: April 1983) reflects the low levels of local production referred to above. Table A.5 shows the role of selected commodities in the Food SITC section, especially for milled rice. Frozen and canned protein items are also major commodities for which, to an extent, local products could be substituted. Beverages and tobacco (SITC section 1) also constitute a 82 Pacific Islands Development Program East-West Center Table A.3. Value of nonmarketed production—rural households: 1978-79 Source Amount Agriculture 3,649,000 Fishing 3,818,000 Livestock 178,000 Fuel gathering 128,000 Boat building 68,000 Construction labor 167,000 Quarrying 72,000 Forestry 36,000 Imputed net rent 739,000 Total 8,775,000 Source: Ag Census 1978-1979: 1981. OPS-TTPI. higher share of Imports into Pohnpei (9.8 percent in 1982) than in other Pacific nations such as the Cook Islands (5.7 percent In 1981; ADB: April 1983) and Tonga (5.6 percent In 1981; ADB: April 1983). Machinery and vehicles (SITC section 7) are significant to the import bill from the perspective not only of total value or percentage share but also In terms of the climatic and road conditions and mainte• nance schedules that lead to a life span of from 18 to 24 months for government vehicles and approximately 50 percent longer for those In the private sector. Despite an annual average Increase of 6.7 percent (1978 to 1980) in the number of vehicle registrations (Pohnpei State Statistics Office: 1982), the number of vehicles per capita has declined (from 22.9 to 21.6 per thousand). Thus the increased import expenditures on vehicles are not necessarily aiding the development of road transport, which Is a necessity for rural development and resource utilization. The origin of imports is given in Table A.6. As to be expected, the United States (with its possessions) is the major source, followed by Japan, the Philippines, and Australia. Japan is also the destination for 97 percent of local exports (Pohnpei State Statistics Office: 1982). Finally, it should be noted that receipts from abroad totaled $13.2 million in fiscal year (FY) 1980 (OPS-Pohnpei: 1983). With imports approximating $14.7 million, the balance of payments shows a 83 Pacific Islands Development Program East-West Center Table A.4. Commercial and state government Imports Into Pohnpei: 1982 Commodity section SITC 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr 1982 Food 0 836,592 1,178,740 1,308,824 907,927 4,232,083 Beverages and tobacco 1 316,586 418,888 461,755 385,823 1,583,052 Crude materials 2 37,288 79,475 6,382 31,646 154,791 Mineral fuels 3 N.A. N.A. N.A. N.A. 5,048,026* Animal and vegetable fats 4 544 - 839 1,527 2,910 Chemicals 5 68,734 185,401 177,439 191,501 623,075 Manufactured goods 6 187,729 377,292 349,629 377,015 1,291,665 Machinery and transport equipment 7 367,807 323,068 446,430 783,883 1,921,188 Miscellaneous manufactures 8 270,146 309,246 290,912 434,303 1,304,607 Commodities 9 2,455 5,251 - 22 7,728 Total without mineral fuels 2,087,881 2,887,361 3,042,210 3,113,647 11,121,099 Total with mineral fuels N.A. N.A. N.A. N.A. 16,169,125 Sources: Pohnpei State Statistics Office, FSM Division of Revenue; FSM Olvlslon of Statistics. Notes: These values are derived form prices paid In port of shipment (f.o.b.). CIF figures are unavailable; gross estimate by FSM-OPS Is CIF 20 percent higher than f.o.b. a. ° Estimate for government purchases of mineral fuels has been added to commercial purchases. Table A.5. Imports of selected commodities Into the State of Pohnpei (US$> 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 fish 037.10 387,263 378,718 342,981 Hilled rice 042.20 892,032 449,446(7) 542,981 Wheat flour 046.01 238,132 113,277(7) 132,184 Hilled 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 listed 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 aid 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 origin: 1977 {% Indicates the origin of commercial Imports from each country or area) Country or area of origin of Imports [%) Pohnpei Imports U.S. SITC Description U) mainland Guam* Hawaii Australia Japan Philippines Others 0 Food 100 33 26 29 1 Beverages and 100 35 59 1 4 tobacco 100 71 15 9 2 Crude materials 100 100 3 Petroleum products 4 Animal and vegetable CD 100 74 6 15 a* fats 100 54 13 25 to Oi a o 5 Chemicals 100 21 25 41 rt p. I Hi 6 Manufactured goods C H* fD O 7 Machinery and 100 10 13 73 CD rt M vehlcles CD 8 Miscellaneous O M 17 25 37 fD CD manufactures 100 d cj rt a. 9 Items n.e.c. 100 100 (0 CD o fD < Pohnpei fD >-* O Imports (%) 100 23 15 31 15 ft D Source: Pohnpei State Statistics Office: 1982. Mote: a. Includes re-exports for Items Imported from U.S. mainland and Japan. o TO $1.5 million deficit. However, only $831,000 of the $13.2 million was generated by local exports, the remainder being offset by inflows of aid. Public Finance Public expenditures, (not including certain U.S. federal programs and projects for fiscal year (October) 1980, totaled $11,905,200 (0PS- Pohnpei: 1983), of which 22.9 percent went to education, 20.3 percent to health, and 28.9 percent to community services such as water and elec• tricity. Wages and salaries accounted for 61 percent of the total public expenditure. During the period 1972 to 1980, the state government spent $31.5 million on capital projects (Pohnpei State Statistics Office: 1982). Major projects included paving roads in the Kolonia area ($11.3 million); extension and upgrading of the airfield ($4.1 million) in Kolonia; sani• tation in Kolonia ($4.8 million); electrification in northern Pohnpei, principally Kolonia ($3.6 million); and the extension and upgrading of Kolonia*s port facilities ($1.7 million). Thus, during the period 1972- 80, more than 81 percent of capital expenditures were concentrated in the Kolonia area, where roughly 25 percent of the state's population lives. These expenditures have been deemed necessary and may yield significant returns in the future. Yet future returns remain distant as social and infrastructure development projects tend to have long, and perhaps uncertain, gestation periods and the rural and productive sectors have been neglected. Of the $11.9 million expenditure in FY 1980, 20.8 percent (approxi• mately $2.57 million) of the total came from local revenue sources (OPS- FSM: 1982). Sources for local revenue include the business gross revenue tax, 41.4 percent or $1.02 million; personal income taxes, 32.1 percent or $0.79 million; import taxes, 23.2 percent; fuel excise taxes, 1.9 percent; and nontax revenues, 1.4 percent. With the Compact of Free Association with the United States, Pohnpei State will have $6.8 million per year to spend on capital projects for the first five-year period of the compact (OPS-Pohnpei: 1983). A consid• erable proportion of expenditures during this period is scheduled to develop productive sectors, including those in rural areas. Other expen• ditures are scheduled to improve the quality of life in rural areas. Thus the "neglect" mentioned above could be rectified. However, any amelioration of the situation will occur in the context of (1) rural- urban disparities, including wage rates; (2) an "Idealized" urban sector that has a propensity to import and consume; and (3) the remnants of the colonial period: an administrative infrastructure and physical plant (e.g., hospital and roads) that are inadequate and use Imported systems from Industrialized nations. For example, recurrent expenditures for wages and salaries, the operating costs of the hospital, and maintenance costs of the electricity power plant will probably be higher than estimated, thus forcing reallocation of resources. 87 Pacific Islands Development Program East-West Center The Development of an Economy Any summation of the preceding would tend toward the pessimistic, starting with the discussion of a "false" economy, continuing with the absence of a data base to serve as a "yardstick" for decision making, and having the following structural characteristics: . The nondevelopmental use of trade—that is, the bulk of imports (value) is for nonproductive (consumption) purposes. . Imports could aid in the development of Infrastructure, services, and production and could maintain rather than increase existing levels of development. • Imports (value) are nearly equal to guesstlmated Gross Domestic Expenditure and certainly well In excess of the value of local production; thus the economy is one of the most open In the world. • Gross Domestic Expenditure is almost entirely financed by foreign grants and subsidies; hence the (money) economy is one of the most dependent In the world. . With imports exceeding exports (value) by a ratio of nearly 20:1, the balance of trade is among the world's worst. Yet the people of Pohnpei (and the FSM) are not pessimistic; rather, they are looking forward to being able to decide their future. The pro• posal to shift expenditure allocations to the productive sectors and rural areas is a positive common-sense measure and one that should have occurred years ago. The development of a database (including natural resources) is presently under way. In addition, contacts and cooperation are increasing with other Pacific nations that can provide valuable experience in development of policies and projects. However, these and other positive actions, such as the tax agreement whereby FSM citizens working in the United States pay FSM taxes and the Compact revenue ($755 million over 15 years), do not guarantee development by any definition. The reality of the economies of Pohnpei, the FSM, and the other former Trust Territories is that they are beginning from a disadvantaged position, coping not only with development but also with a tragic colonial past. 88 Pacific Islands Development Program East-West Center Appendix B: POPULATION Table B.l shows population figures for the period 1973-80. The AAGRs for the FSM (2.36 percent) and Pohnpei State (2.55 percent) for this period are somewhat similar to those for the period 1948-70: 2.70 and 2.45 percent for the FSM and Pohnpei State, respectively. These figures would tend to Indicate a stabilizing or slightly declining (FSM) or increasing (Pohnpei) growth rate; however, this is not the case. Population projections (on the basis of the 1973 Population Census: see Tables B.2 and B.3), which employed the cohort component method, Indicate increasing growth rates especially In certain age groups (Table B.2). Specifically, the projections show more young adults, who will undoubtedly have families, and more people who are 65 years of age or older, presumably because of Increased life expectancy. Hence, Pohnpei State's population has been.projected to have a 3.18 percent AAGR for the period 1973- 88. Given the age "bulges" and their causes and effects (noted above), it is quite possible that this growth trend could continue into the next century. Table B.l shows that Kolonia, the capital, has had a lower AAGR than Pohnpei as a whole during the 1973-80 period. This implies either that most of the state's growth has occurred in rural areas other than those shown or that Kolonia has physically spread into areas formerly classified as rural; the latter is more likely.* Thus, a key Issue Is whether pro• jected population growth will occur more evenly, and thus In rural areas, or be concentrated In the capital. According to the projections (Table B.3), growth will be concentrated in Kolonia: (3.47 percent AAGR 1973-88 versus 3.03 percent for the state) and its environs (i.e., Nett Munici• pality). A major determinant of whether the projections will be realized will be the availability of employment and services in the capital. Evi• dence from other Pacific island nations suggests that urbanization will occur and that as a result the allocation of scarce resources will be concentrated In the capital, thus possibly furthering concentration via migration. Other major demographic considerations are . Male:Female Ratio (Table B.2) Although Imbalances for certain age groups have decreased, Pohnpei State's population is increasing faster for males than it is for females, thus raising questions on male emigration and possibly marital and family structure and practices. *See Connell (1983) for a more detailed analysis of urbanization on Pohnpei. Pacific Islands Development Program East-West Center Table B.l. Population growth 1973-80: Federated States of Micronesia, Pohnpei State, and select areas on Pohnpei Island 1973 Population Census 1977 Skill and occupation survey 1980 Population Census4 No. of Population No. of Population No. of Area house• house• house• Population6 AAGR(l) holds M F T holds M F T holds 1973-80 Federated States of Micronesia total 8,743 32,128 30,603 62,371 8,981 37,086 34,881 71,967 10,665 73,444 2.36 Pohnpei State total 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 total 418 1,661' 1,555 3,216 435 1,889 1,727 3,616 524 3,663 1.88 Sokehs Enumeration District 52 88 348 328 676 Not available 104 756 1.61 Uh Municipality total 228 922 915 1,837 207 813 822 1.635 261 1.869 0.25 Uh Enumeration Oistrict 19 31 170 141 311 Not available 57 551 8.51 Sources: 1973 Population Census; 1980 Population Census preliminary data: 1981; 1981 FSM National Yearbook of Statistics: 1982; 1981 Pohnpei State Statistics Yearbook: 1982. Notes: M * male; F ° female; T » total. a. There has been some question of accuracy for the 1980 Population Census. Some government personnel believe there has been underenumeratlon In certain districts, whereas in others, there might have been double-counting of certain households. b. Preliminary data for the 1980 Population Census do not disaggregate by sex or age* groups. Table B.2. Pohnpei State and official population estimates by age group and sex: 1973-80 1973 1980 AAGR (%) Age group No. Hale:female ratio No. Male:female ratio 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 Statistics Office: 1982. Notes: The 1980 figures differ 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 Pacific Islands Development Program East-West Center Table B.3. Pohnpei State official population projections: 1973-88 (mid-year) Area 1973 1983 AAGR: 1973-83 it) 1988 AAGR: 1973-88 (I) Pohnpei Island (excluding Kolonia) 12,460 16,350 2.75 19,490 3.03 6,740 3.45 8.010 3.47 Kolonia 4,800 2,620 2.74 3,080 2.92 Outer Islands 2,000 25,710 3.04 30,820 3.18 Pohnpei State total 19,260 FSM (Including Pohnpei State) 62,731 85.285 3.12 101.155 3.28 Source: TTPI Population Projections: 1973-2003 (based on 1973 Census) as given In 1981 Pohnpei State Statistics Office: 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 specific area. . Crude Birth Rate The reported Crude Birth Rate (per 1,000) was estimated to be 35.6 in 1973 and 40-3 In 1980 for Pohnpei State; and 31.5 and 33.5 for the FSM in 1973 and 1980, respectively. These rates imply support for the above argument that population growth rates are increasing and that they could remain high for a number of years. . Crude Death Rate The reported Crude Death Rate (per 1,000) for both the FSM and Pohnpei State has approximated 4.0 and 5.0 for the period 1973-80. . Infant Mortality Rate The reported Infant Mortality Rate (infant deaths per 1,000 live births) for Pohnpei State was 28.2 in 1973 and 26.4 in 1980; for the FSM, it was 24.3 in 1973 and 37.9 in 1980. In summation, if the preceding data are correct, the 1983 population for both the FSM and Pohnpei State will double In roughly 22 years and Kolonia1s will double in slightly more than 20 years. Although It could be argued that the Island of Pohnpei can accommodate the projected growth at current welfare levels (quality of life or standard of living) In the near term, some question could be raised regarding Its ability to sustain assimilation over a longer period. An even more immediate policy question concerns the demands and expectations of the growing population; how they will be met and where: in Kolonia with its urban consumption patterns, in the rural areas, or through emigration? 93 Pacific Islands Development Program East-West Center Appendix C: THE LABOR FORCE The size of Pohnpei's labor force reflects both population figures when aggregated at the state level (Pohnpei State has roughly 32 percent of the national totals for population and the labor force) and the concentration of wage and salary earners in and around the state capital. This suggests that a vast majority of the more than 3,800 wage and salary earners (1979: 32.6 percent of the total labor force) work in the Kolonia area. This concentration also reflects the public sector's dominate role in wage and salary employment (see Table CI): roughly 60 percent of wage and salary earners are employed by the public sector In Pohnpei and Truk States, rising to 65 percent and over in less populous Kosrae and Yap States. Private-sector wage and salary employment Is concentrated in wholesaling and retailing, transportation and distribution. Pohnpei also has considerable employment in construction and private schools (which, to some, may not be considered a "true" private-sector activity, but rather a nongovernmental public-sector or nonprofit classification). However, a major private-sector activity in terms of the total numbers of people earning wages and salaries is "Unclassified and Unknown." Data constraints are shown more clearly in Table C.2, which Is based on the 1973 Population Census, official population projections using the 1973 Census, a 1982 employment development proposal that utilized 1979 data (Pham: 1982), and the author's estimates. As the table indicates, wage and salary employment Increased at an estimated AAGR of slightly more than 9 percent during the period 1973-79. Although the rate has probably fallen slightly, this increase suggests a major enlargement of the public sector. The public sector, as the main growth vehicle, has triggered some expansion In the private sector. Because the table reflects "best guesstimates," certain assumptions had to be made that significantly affect the validity of the figures presented. Those assumptions Include, for example, that the "village economy" (term used by the 1973 Population Census) grew at an AAGR equal to that for the population aged 15 to 64 and that the "unemployed" cate• gory (1973 Population Census), especially males, decreased significantly because it was the major source for workers entering wage and salary employment. Both of these assumptions could be fallacious either in part or in total. They also Include certain value judgments concerning the "unemployed" category utilized In the 1973 Population Census. Concise definitions and analyses of this category were unavailable to the author. The author finds it difficult to believe the accuracy of the 1973 data (17.5 percent of the total labor force was "unemployed"*) given both the role and the opportunity for production in the subsistence or "village economy" sector. *Currently not working but actively seeking employment. Pacific Islands Development Program East-West Center Table C.l. Wage and salary earners and average annual earnings by type of economic activity: 1979 Type of economic Avg. annual Type of economic Avg. annual activity Number earnings activity Number earnings 1. Agriculture, forestry, 6b. Hotels and restaurants and fishing FSM citl2ens 55 1,100 U.S. citizens 2. Mining and quarrying Other citizens 2 4,700 3. Manufacturing FSM citizens 1,700 Total 571,200 U.S. citizens Other citizens 7. Transportation, storage, Total 1,700 and communication FSM citizens 367 500 U.S. citizens 4. Electricity, gas. and 3,000 water Other citizens 7 FSM citizens 163 3,000 500 U.S. citizens 5 8.600 Total 374 Other citizens 8 8,400 8. Financial, insurance, real estate, and business services Total 171 3,300 FSM citizens 17 4,600 U.S. citizens 0> Co CD O Other citizens rt H- I K H- Construction Total 17 4,600 (D O FSM citizens 40 1,500 CO rt M U.S. citizens 9. Community, social, and CO Other citizens 60 3,800 personal services O l-» 2,900 fl> CD FSM citizens 2,214 0 0 Total 100 2,900 U.S. citizens 66 13,700 rt P- Other citizens 36 5,100 (D CO TOTAL 2,316 3,200 < 6a. Wholesale and retail (0 t-1 Trade All activities O FSM citizens 476 1,400 FSM citizen 3.651 2,300 U.S. citizens 7 7,400 U.S. citizens 82 12,600 § Other citizens 2 900 Other citizens 121 4,200 rr Total 485 1,500 Total 3,854 2,600 •tf rt O OQ Source: Pohnpei State Statistics Office: 1982. rt Table C.2. Structure of the Pohnpei State labor force: 1973-79 Wage Mot salary Village Home- economically Hot Armed Year/Sex earners economy maker Students Unemployed ac ti ve stated 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 452 564 2,338 426 764 123 4 - 5,671 % 9.7 12.1 50.1 9.1 16.4 2.6 0.1. 100.1% Total H 2.291 1,712 2,338 1,159 1,648 239 9 11 9,407 % 24.4 18.2 24.9 12.3 17.5 2.5 0.1 0.1 100% 1979 Hale H 3,094 1,441 0 1,114 227 146 6 12 6,040 % 51.2 23.9 18.4 3.8 2.4 0.1 0.2 100% Female N 760 708 2,888 641 614 154 5 - 5,770 % 13.2 12.3 50.1 11.1 10.6 2.7 0.1 100.1% Total N 3,854 2,149 2,888 1,755 841 300 11 12 11,810 % 32.6 18.2 24.5 14.9 7.1 2.5 0.1 0.1 100% 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 Statistics Office: 1982; Pham: 1982; author's estimates. The quasl-subsistence or "village economy" sector is shown in Table C.3. The table is not completely accurate as it does not indicate the role of persons aged 65 years and over nor of those aged 15 years and under. Also only the main activities are shown, which does not indicate the variety of activities performed by a single person. Similarly, the role of females in productive activities commonly referred to as "house• work" or "domestic duties" is not Indicated. However, the table assumes that "Food growing" primarily for subsistence or personal consumption is the main absorption activity for employment and Is thus increasing more rapidly than the other categories. These other categories can generally provide the individual with more opportunity to earn cash than "Food growing." The preceding data only describe the obvious: that the "village economy" continues to be a major source for employment; that wage and salary earners are concentrated in and around Kolonia; that wage and salary employment and its high growth rate during the 1970s are dominated by the public sector; and that private-sector wage and salary employment are concentrated in the distribution of goods and services rather than in production (or resource utilization) activities. Beyond the data, certain key work force problem areas have also been identified and include the following: • The educational system is based on that of the United States. . There is a high reliance on federal (U.S.) funding of the public sector that results in a short-term perspective on the work force development. . The maintenance level of educational facilities is low and the requisition of supplies is poor (i.e., there are management problems). . There is a lack of instructional materials, and those that are available are from the United States. . The quantity and quality of local and expatriate teachers are insufficient. . Students have low performance levels in English (their second language and the language of instruction), which affect overall performance. . The quality of education available is limited, especially at the secondary level, and either is concentrated in Kolonia or is an option open only to those with substantial financial resources (Pham: 1982). Pham (1982), who identified the above problem areas also presented work force requirements for certain key sectors or industries, primarily 98 Pacific Islands Development Program East-West Center Table C.3. Structure of the village economy labor force aged 15 to 64: 1973-79 Main productive activity Food Not Year/Sex growing Fishing Copra Livestock Handicraft Other 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 Statistics Office: 1982; author's estimates. in the public sector. These include increases in the number of personnel in, for example, the health sector, telecommunications maintenance, teaching, administration, and sales. These projections, however, only reflect the current employment structure and planned increases in specific services, such as additional telephones and extension of the electricity grid. The projected labor requirements do not include . discussion on the rapidly growing size of the labor force, . analysis of the quantitative and qualitative requirements of increased economic production, . the effect of qualitative and quantitative increases of skilled labor, . the constraints on continuing public-sector growth, . the desirability of shifting the employment structure away from the public sector, and . the cost of such a restructuring. The employment development and training plan referred to above (Pham: 1982) does discuss rising expectations (especially by younger people), a widening generation gap, and statistics such as a suicide rate of 200 per 100,000 people in the 15- to 25-year-age group in Micronesia as a whole (described as "among the world's highest"). However, as implied by the above omissions in the analysis, key Issues are clearly skirted: for example, a rapidly Increasing population, rising expectations, limited opportunities to satisfy these expectations, and open migration to the United States. Taken together, these issues suggest that the FSM could anticipate a situation similar to that found in several South Pacific nations, such as the Cook Islands. The Cook Islands has a declining population In absolute numbers; but more important, those in the working-age group, especially skilled labor, who reside in the Cook Islands are vastly outnumbered by emigrants to New Zealand. This would mean that as people are trained in Pohnpei and the FSM, they will emigrate to the United States. This does not suggest that the FSM will not receive certain benefits from this relationship, espe• cially in remittances of income. It does indicate that scarce resources utilized to train FSM citizens will be contributing to the skilled labor pool In the United States. To a major extent, this Issue has been dealt with in a unique manner by the Compact of Free Association: FSM citizens working in the United States will pay FSM taxes rather than U.S. federal taxes (during the compact period), and that fact ensures some compensa• tion for past FSM expenditures and lost revenue. Regardless of benefits, an hourglass age structure could be anticipated, which implies that skilled personnel will continue to be a scarce resource, even with a most aggressive training and skill development program. 100 Pacific Islands Development Program East-West Center Appendix D: SELECTED ENERGY DATA Additional data not discussed in the text are presented in the following tables and figure: Table D.l. Petroleum imports in the Pacific: 1980 Table D.2. Commercial imports of petroleum products into Pohnpei: 1979-82 Table D.3. Power generation output: FY 1975-84 Figure D.l. Pohnpei state power plants—load curves Table D.4. Pohnpei's load growth and fuel costs: FY 1979-89 Table D.5. Revised plans for Pohnpei1s energy development: FY 1981-89 The last table is an update (1984) of Table 3.4. discussed in the text. Table D.l. Petroleum imports in the Pacific: 1980 Values of petroleum imports Location Value As % of As % of domes- (US$ million) imports tic exports Kiribati 3.8 N.A. N.A. Tonga 5.2 12 66 Solomon Islands 14.6 19 22 Western Samoa 8.8 13 94 Niue 0.6 17 188 Fiji 129.3 23 35 Cook Islands 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: Pacific Energy Program: 1982b. Selected Data from Country Energy Mission Reports. East-West Center. Honolulu. Pacific Islands Development Program East-West Center 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 Jet fuel 3,537 117,918 8,698 289,953 26,860 895,365 21,942 731,410 Lube oil 752 25,091 1,491 49,718 6,702 22,341 4,270 142,346 o Kerosene 497 16,587 1,112 37,073 4,032 134,413 3,942 131,410 ro Aviation gas 3,578 125,273 1,325 44,182 2,826 94,216 2,977 99,233 o> CD CD o Solvent 2 76 21 708 57 1.900 56 1,898 rt p. I Hh C H- fl> o 3,584,846 91,437 3,048,026 CO Total 22,999 766,737 41,367 1,379,011 113,574 rt M CO O I-1 0 0 Sources: Pohnpei State Statistics Office: 1982; OPS-FSM: 1983; Pohnpei State Statistics 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 million,^ of which $1.3 million was for diesel for electricity generation. o T> 0 Fiscal Year Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June July Aug. Sept. Total 1975 973.2 607.2 687.0 737.7 645.9 726.4 1,041.8 610.4 764.4 760.4 778.0 823.2 9,155.6 1976 884.2 654.6 987.6 1,015.8 779.8 843.0 770.0 964.2 962.2 825.6 830.4 883.8 1,0351.2 1977 984.4 764.4 935.8 803.4 876.2 883.0 748.4 1,082.2 864.0 811.0 965.2 854.0 1,0572.0 1978 889.8 925.4 991.4 958.0 880.6 1041.4 1,026.0 1,066.8 1,141.6 900.2 905.6 908.6 1,1635.4 1979 812.8 819.8 1,118.2 1,029.2 1,040.8 1,064.2 1,206.8 1,064.0 1,136.8 1,229.8 115.6 1,310.0 1,2948.0 1980 1,154.6 875.2 1,012.0 1,181.6 1,025.0 1,211.4 1,388.0 740.4 1,477.6 1,424.0 1,019.6 1,261.8 1,3771.2 1981 1,132.8 1,052.0 1.057.8 1,226.2 1,012.4 1,051.6 697.0 964.4 1,005.2 981.8 1,068.4 1,097.0 1,2346.6 1982 1,269.6 1,193.2 1,164.8 1,373.6 946.0 952.4 885.8 869.7 935.0 10,245.4 1,246.0 1,266.6 1.3145.7 1983 1,074.6 1,177.4 990.0 910.0 1,631.2 1,107.4 1,235.8 2,782.6 995.8a 1,417.8D 1,324.6 14,647.2 1984 ' 1,378.0 1,310.8 1,526.0 Source: State Department of Resource Conservation and Surveillance: 1984. Notes: a. Does not include CAT 398 production. b. Included CAT 398 kwh production from June to August. M>M> fUflytS, (saccico OAKS) o td *v CD O rr H- I Hi n> o CD rt n CO O H* fD (0 0 P rt a. ro co * o fD < (D O TJ o ro 15o o 3 Ox 8 o I 1 1 I I ! I I ! I § ! CM €*sJ a a * TIME OF DAY (Ilour) o Figure D.l. Pohnpei State power plants-load curves. OQ H Source: OPS - I SM. 1981. Table D.4. Pohnpei's load growth and fuel costs: FY 1979-89 Fuel cost Total Fiscal Demand (mwh) Fuel (mil. (incl. POL cost Year 10%/yr Peak (kw) gal/yr) 5%/gal) ($million) 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 1984a 16.15 2,836 1.50 1.20 1.68 1985a 17.80 3,126 1.62 1.07 1.76 1986a 19.62 3,446 1.16 1.12 1.85 1987 a 21.64 3,800 1.66 1.18 1.94 1988a 23.85 4,189 1.80 1.24 2.04 1989a 26.30 4,619 1.84 1.30 2.14 Source: State Department of Resource Conservation and Surveillance: 1984. Pohnpei. kwh/year Notes: Peak demand = 8,760 - load factor Load factor = 0.60 - 0.75 historically the table peak values use a 0.65 load factor. a. Predictions based on about 10% load growth trend and First quarter FY 1984 expenditures. 105 Pacific Islands Development Program East-West Center Table D.5. Revised plans for Pohnpei's energy development: FY 1981-89 Fiscal 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. Electricity 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) - - - - - 2.01c 4.02° 4.02c 6.45c c. Production by mlcrohydroelectrlc (mwh) - 0.80 - 0.07d 0.070 0.355e 0.355 0.375 0.375 d. Production by (1) blomass (senile t coconut, etc.) and (2) gaslflers - - - - - 0.073f 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. Electricity 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 - 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 slightly 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 line. 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. REFERENCES ADB: March 1983. 1983. Overview of Rural Electrification Evaluations. Asian Development Bank. Manila. ADB: April 1983. 1983. Key Indicators of Developing Member Countries of ADB. Asian Development Bank. Manila. ADB: October 1983. 1983. Report of the Regional Rural Electrification Survey to the Asian Development Bank. Asian Development Bank. Manila. Ag Census 1978-1979. OPS-TTPI. 1981. Draft Consumption and Production In the Traditional Sector of the Trust Territory of the Pacific Islands. Office of Planning and Statistics, Trust Territory of the Pacific Islands (TTPI). Salpan, Mariana Islands. All, I. (editor). September 1982. "Quarterly Review." Central Monetary Authority of Fiji. Suva, Fiji. Brewbaker, J.L. and K.G. MacDicken (editors). 1982. "Blomass Energy Options for the American Territories of the Pacific." University of Hawaii. Honolulu. CES: 1982. Bureau of Statistics. October 1982. Current Economic Statistics. Government of Fiji. Suva, Fiji. Connell, J. 1983. "Migration, Employment and Development In the South Pacific, Country Report No. 3 - Federated States of Micronesia." South Pacific Commission. Noumea, New Caledonia. Department of Energy (DOE). 1982. Territorial Energy Assessment - Final Report. U.S. Department of Energy. Washington, D.C. Division of Revenue. 1983. Income and Import Tax Schedules. Federated States of Micronesia. Fairbairn, I.J. 1982. "Rural development and employment In the South Pacific" in Regional Development in Small Island Nations. Benjamin Higgins, editor. United Nations Centre for Regional Development. Nagoya, Japan. 1977 Fiji Household Income and Expenditure Survey. 1982. As cited in Rizer et al. Gamser, M.S. 1980. "Household Energy Consumption in Port Moresby." Energy Planning Unit, Department of Minerals and Energy. Papua New Guinea. Pacific Islands Development Program East-West Center Head Start Office. 1983. "Pohnpei Community Needs Assessment." Head Start. Pohnpei. Hiene, C. 1974. Micronesia at the Crossroads. University Press of Hawaii. Honolulu. Jackson, D. 1981. The Distribution of Incomes in Papua New Guinea. National Planning Office. Wards Strip, Papua New Guinea. Laird, W.E. 1982. Soil Survey of Island of Pohnpei. U.S. Department of Agriculture Soil Conservation Service. Lloyd, C.R., M. Kumar, and P. Metham. 1982. Household Energy Use In Fiji Report of the Nadi-Lautoka Domestic Energy Survey. Institute of Natural Resources, University of the South Pacific. Suva, Fiji. Mamak, A. 1977. "Namosi Data Paper." Amax. Suva, Fiji. Manis, F. 1981. "Views out of Micronesia on Social Welfare Services and Social Work Education." Bachelor of Social Work Program, Western Pacific Studies Program, University of Guam. Guam. McHenry, D.D. 1975. Micronesia - A Trust Betrayed. Carnegie Endowment for International Peace. New York. Nevin, D. 1977. The American Touch in Micronesia. As cited in Connell: 1983. Oliver, D.D. (editor). 1971. Planning Micronesia's Future. University of Hawaii Press. Honolulu. Onaga, C. 1982. Draft: A Mid-level Worker's Approach to Primary Health Care for Pohnpei, Micronesia. Unpublished. University of Hawaii School of Public Health. Honolulu. Office of Planning and Statistics - Federated States of Micronesia (OPS-FSM). 1981. Flve-Year Energy Plan. Office of Planning and Statistics, Federated States of Micronesia. Pohnpei. OPS-FSM. 1982. 1981 National Yearbook of Statistics, Office of Planning and Statistics, Federated States of Micronesia. Pohnpei. OPS-FSM. 1983. Unpublished data, including American Samoa preliminary Consumer Price Index and 1982 preliminary Trade Statistics. Office of Planning and Statistics, Federated States of Micronesia, Pohnpei. OPS-Pohnpel. 1983. Draft. Pohnpei State Development Plan. Office of Planning and Statistics. Pohnpei. 108 Pacific Islands Development Program East-West Center OPS-TTPI. March 1979. Bulletin of Statistics. Office of Planning and Statistics, Trust Territory of the Pacific Islands. Vol. 2, No. 1. Northern Mariana Islands. OPS-TTPI. 1979. Pohnpei Island Land Use Guide. Office of Planning and Statistics, Trust Territory of the Pacific Islands. Saipan, Mariana Islands. Pacific Energy Program. 1982a. "Country Report, Pohnpei, Federated States of Micronesia." East-West Center. Honolulu. Pacific Energy Program. 1982b. Selected Data from Country Energy Mission Reports. East-West Center. Honolulu. Perrin, D.E. 1979. Fifteen-Year Forecast of Expenditure Requirements. Prepared for the Commission on Future Political Status and Transi• tion. Institute of International Law and Economic Development. Washington, D.C. Pham, L.H. 1982. Employment Development and Training Plan: Federated States of Micronesia. Prepared for the FSM Office of Planning and Statistics. JWK International. Annandale, Virginia. Pohnpei State Statistics Office. 1982. 1981 Pohnpei State Statistics Yearbook. Pohnpei. Pohnpei State Statistics Office. 1983. "Report on Imports for 1982." Office of Planning and Statistics. Pohnpei. 1973 Population Census. Office of the High Commissioner. 1973 Popula• tion of the Trust Territory of the Pacific Islands. Saipan, Mariana Islands. 1980 Population Census. U.S. Census Bureau. 1981. "Preliminary: Summary Counts of Population and Housing Units by Enumeration District," Washington, D.C. Rizer, J.P., J. Lin, M. Waqavonovono, S* Saumatua, and A. Marjoram. 1982. The Potential Impacts of a Namosl Copper Mine: A Case Study of Assimilation Planning. Centre for Applied Studies in Development, University of the South Pacific. Suva, Fiji. Shaw, B. 1982. "Smallness, Islandness, Remoteness and Resources: An Analytical Framework" in Regional Development In Small Island Nations. Benjamin Higgins, editor. United Nations Centre for Regional Development. Nagoya, Japan. Slwatibau, S. 1978. A Survey of Domestic Rural Energy Use and Potential In Fiji. Centre for Applied Studies in Development, University of the South Pacific. Suva, Fiji. 109 Pacific Islands Development Program East-West Center Smith, K. 1983* Lecture Notes. East-West Center. Honolulu. State Department of Resource Conservation and Surveillance. 1983. "Meter Reader Forms." Raw Data from Records. Pohnpei. State Department of Resource Conservation and Survelllence. 1984. Records. Received through personal communication. Pohnpei. Stavenuiter, S. 1983. Income Distribution in Fiji. Central Planning Office and International Labour Organisation. Suva, Fiji. Tack, C. 1982. "Environmental and Societal Issues in the Development and Utilization of Blomass Energy Resources of the American Trust Territories of the Pacific." Unpublished. Department of Horticulture, University of Hawaii. Wenkam, R. 1971. Micronesia: The Breadfruit Revolution. East-West Center. Honolulu. 110 Pacific Islands Development Program East-West Center 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 popu• lation, 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 resi• dence halls for participants, and a conference center with meeting rooms equipped to provide simultaneous transla• tion 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 coopera• tive 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 organiza• tion, 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 con• ducted within the context of three major programs: Energy, Minerals Policy, and Development Policy and Inter• national 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. 1