territorial residents.
Notwithstanding these
efforts, most of the territories have made little progress toward becoming economically self-

reliant and remain highly dependent on federal
assistance,

Most

of

the

territories

face

constraints--such as geographic

many

indigenous

isolation from

U.S.
and- world markets,
limited natural and
Manpower resources, small land areas, limited
infrastructure
to
support
development
and

attract investment, and large public sectors-which make economic self-reliance an unlikely
prospect for the

23 to 25.)

foreseeable

future.

(See pp.

FEDERAL CONSTRAINTS RELATE TO

INCONSISTENT TREATMENT IN FORMULATING
AND EXTENDING POLICIES, LAWS, AND PROGRAMS
GAO found that there is no federal policy which

details

how the

territories

should

be

treated

in formulating and extending laws and programs.
Territory officials identified instances when
federal policies, laws, and programs have constrained
economic
and
social
development
because
they
were
inconsistently
applied,

insensitive to unique territorial circumstances

and

needs,

tions.

or

inappropriate

Examples

cited

for

included

local

condi-

the Caribbean

Basin Initiative provisions affecting the rum
industry and the tuna industry in the Virgin
Islands
and
American
Samoa,
respectively;
Department of the Treasury rulings preventing
the use of tax exempt bonds; legislation to
eliminate
important
tax
benefits
to
Puerto
Rico;
and
shipping,
tax,
immigration,
and
environmental laws which constrain development
initiatives.
Congress and the executive branch have acknowl-

edged

many

meant

to

territories

of

and

the

remedy

problems

have

many

identified

initiated

of

the

several

by

the

actions

problems.

For

example, a laws commission was established for
the Northern Mariana Islands in 1980 and the
Department of Interior began a review of fed~
eral laws affecting the territories in 1981.
Congress has enacted legislation, such as Title
V of Public Law 95-134, which authorized federal agencies to consolidate grants to the
iv

I0CG200

Select target paragraph3