The United States spent heavily in the islands in the 1990s, making financial assistance the primary source of income. Other mainstays of the economy are subsistence farming and fishing. Fish, clothing, bananas, and black pepper are exported and food and beverages, manufactured goods, and machinery are imported. The United States and Japan are the main trading partners.
The islands are governed under the constitution of 1979. The president, who is both head of state and head of government, is elected by Congress for a four-year term. There are 14 members of the unicameral Congress; four are popularly elected for four-year terms and 10 for two-year terms. Defense is the responsibility of the United States. Administratively the country is divided into four states.
Germany purchased the islands from Spain in 1898. They were occupied (1914) by Japan, which received them (1920) as a League of Nations mandate. During World War II, U.S. forces captured the islands, and in 1947 they became part of the U.S. Trust Territory of the Pacific Islands. In 1979, as negotiations for termination of the trusteeship continued, they became self-governing as the Federated States of Micronesia. In 1986, they assumed free-association status with the United States; the economic and defense relationship with the United States was renewed for 20 years in 2004. Emmanuel Mori became president in 2007.
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Micronesia , from the Greek mikros (μικρός) (meaning small) and nesos (νῆσος) (meaning island), is a subregion of Oceania, comprising hundreds of small islands in the Pacific Ocean. The Philippines lie to the northwest, Indonesia, Papua New Guinea and Melanesia to the west and south, and Polynesia to the east.
The term "Micronesia" was first proposed to distinguish the region in 1831 by Jules Dumont d'Urville.
Politically, Micronesia is divided into eight nation-states and territories:
Much of the area was to come under European domination quite early. Guam, the Northern Marianas, and the Caroline Islands (what would later become the FSM and Palau) were colonized early by the Spanish. These island territories were part of the Spanish East Indies and governed from the Spanish Philippines since the early 17th century until 1898. Full European expansion did not come, however, until the early 20th century, when the area would be divided between:
During the First World War, Germany's Pacific island territories were taken from it and became League of Nations Mandates in 1923. Nauru became an Australian mandate, while Germany's other territories in Micronesia were given as a mandate to Japan and was named The South Pacific Mandate. This remained the situation until Japan's defeat in the Second World War, when its mandate became a United Nations Trusteeship ruled by the United States, the Trust Territory of the Pacific Islands.
Today, all of Micronesia (with the exceptions of Guam and Wake Island, which are U.S. territories, and the Northern Mariana Islands, which is a U.S. Commonwealth) are independent states.
The region is home to the Micronesian Games, a quadrennial international multi-sport event involving all Micronesia's countries and territories except Wake Island.
In September 2007, journalists in the region founded the Micronesian Media Association .