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This chapter is concerned with describing the evolution of the FSM Sustained Growth Strategy (SGS), and the fiscal challenges facing the nation resulting from the need to implement the provisions of the amended Compact. Discussion starts through detailing the FSM's negotiating strategy for the amended Compact and in outlining the principal objectives that the FSM sought
to secure—macroeconomic stability and sustainable development. These objectives are compared with what the FSM and U.S. finally agreed, and which are embodied in the terms and conditions of the amended Compact.

At the regional level, coordination of the implementation of the Pacific Plan is, in the first instance, the responsibility of the Pacific Islands Forum Secretariat. This is consistent with the 2004 decision by Leaders that the primary functions of the Secretariat are to provide policy advice, coordmation and assistance in implementing their decisions. The Secretariat has therefore been restructured to more effectively undertake these responsibilities.