Kosrae State Government
Department of Resources and Economic Affairs
Economic Outlook
Kosrae's economy is fueled mostly by financial assistance from the United States Government through the Compact of Free Association. In 2003, such assistance including other external grants represents over 67% of the state Gross Domestic Product (GDP). Although the economy is still heavily dependent on external support, such level of support relative to GDP has progressively declined since 1986. 

In the private sector the main occupations are: retail outlets, restaurants and bars, resorts and diving, farming, fishing and some service businesses, such as auto and machine repair. Traditional subsistence economy remains very important and almost every family catches fish and has gardens as well as live stock for food production.
Eco tourism is a mainstay of Kosrae's private sector economy.
Compact of Free Association
The financial assistance by the United States to the Federated States of Micronesia under the amended compact is set to expire in 2023, at which point a trust fund will maintain government functions in perpetuity. The role of domestic and foreign invesment is therefore critical to support Kosrae's long term economic viability. Since domestic investment is limited by capital and skilled labor, Kosrae State Government is working diligently to support interested foreign parties for investment opportunities in order to support well balanced future growth, particularly in export industries.

Kosrae State Government owns and operates most infrastructrue facilities, all health and most education services, extensive commercial activities in fisheries, marketing, and other small enterprises.

An abundance of Kosraean fruits

Since the vast majority of Kosrae's population lives along the coast, the primary road is a scenic 25 mile circumferential road running from Okat Harbor and Kosrae International Airport to the village of Utwe. This primary road is paved and connected to a 15 mile secondary inland road sytem. This secondary system provides access to rural inlands for agricultural purposes.

Port Facilities & Sea Cargo

Okat Harbor is Kosrae's primary dock facility and handles all commercial shipping and most fishing activities. The harbor and dock complex is large and deep enough to accommodate cargo and fishing vessels up to 10,000 Gross Register Tons (GRT). The dock is 550 feet long, and the harbor is 30 feet deep at low tide with a turning radius of 750 feet. The complex is capable of handling containers between 20 and 40 feet and contains a 6,000 square foot storage warehouse.

Cargo service is provided every two weeks from anywhere in the world. Matson Shipping Line and MEL Shipping serve throughout the Pacific from the U.S. and Kyowa Lines serves destinations from South Korea. A continuous fuel supply is available through a 1.2 million gallon fuel storage facility operated by the Micronesian Petroleum Corporation which is conveniently located adjacent to the harbor complex at Okat.

All eastbound connections include: Kaohsiung, Hong Kong, Pusan, Yokohama, The Phillipines, Palau, Saipain, Guam, Chuuk, Pohnpei, Majuro, and Portland.

All westbound connections include: San Francisco, Oakland, Portland, Hawaii, Majuro, Ebeye, Pohnpei, Chuuk, Guam, Saipan, Yap, Palau, The Phillipines, Singapore, Hong Kong, and Kaohsiung.

Airport Facilities & Air Cargo

Air transportation for passengers and cargo is provided by United Airlines and Air Nauru. Two westbound and two easbound flights transit weekly for United Airlines on a Boeing 737 alternating between Hawaii and Guam as final destinations. Air Nauru provides one westbound and one eastbound weekly flight on a Boeing 737 connecting various Northern and Southern Pacific destinations including Brisbane, Australia.

Kosrae International Airport has a runway of 6,250 feet and includes an aircraft rescue fire fighter station and a weather station.


Kosrae has three coal powered generators capable of meeting an increasing demand for power. A distribution system of 13.8 KV phase to phase, 60 cycles delivers 120V/240V single phase and 120V/240V three phase power. Other voltages are available when coordinated with the Kosrae Utility Authority.

Kosrae Utility Authority recently installed a large solar panel system with a load capacity of 198 KW.


Phone and internet services are provided by the FSM Telecommunications Corporation based in Pohnpei. Services include international direct dialing, operator assisted services, ADSL internet, and GSM cell phone services. These services are made possible via satellite dish located in Tofol, the state capital.


The Bank of the FSM and the Bank of Guam provide a full suite of commercial banking solutions on Kosrae, including letters of credit, foreign exchange transfers, and collections. Both banks are members and fully insured by the United States Federal Depository Insurance Corporation (FDIC).

The FSM Development Bank offers and administers loans for investment projects aimed at developing Kosrae's economy. These loans are provided with competitive interest rates and terms.

Postal Service

The FSM Postal System uses the same rate structure for domestic and international mail as the U.S. postal system and is part of the U.S. Zip Code System. Kosrae is Postal Zone 8 and Zip Code 96944. The United States Postal Service picks up and delivers all mail on Kosrae via air service. Postal services include US Priority and Certified Mail. 

Private commercial air freight & courier services are available for worldwide express door to door delivery. 

An abundance of Kosraean fruits