This paper is intended to find the major industries in the FSM and how it can helpreduce its dependency on the compact funds. The GDP of the economy is dominated bythe compact grants from the US which is mainly to help the economy to achieve its self-reliance. In this study I did a simple regression model which the dependent variable isGDP growth and the independent variables are fishing, FDI, and Compact funds. I chosethose variables because the paper is about finding the major sector that can be areplacement of the compact grants and urge the economy to attract FDI to develop thisindustry. I find the distance between China and FSM interesting for Chinese FDI's toinvest in FSM because those two countries are not far from each other and it will be easyfor Chinese investors to ship or fly their products into FSM. This paper includes aneconomic review of the FSM economy in the context of the amended compact and all theimportant information's on the economies conditions with the compact grants. I hope thatthis paper can be useful for the future studies.
展开▼
