By Haidee V. Eugenio
Variety Assistant Editor

THE gross revenue of businesses in the CNMI reached only $1.829 billion in calendar year 2006 — a drop of $191 million or 9.45 percent from the previous year’s $2.020 billion.
The 2006 business gross revenue of $1.829 billion was the lowest since 1997 or since the Asian economic crisis or even just after the Sept. 11, 2001 terrorist attacks.
“We haven’t seen the worst yet,” said long-time businessman Efrain F. Camacho, who is also a former president of the Saipan Chamber of Commerce. “Economic reforms should have been instituted years ago. The economy is sick and it will not recover overnight.”
Business gross sales — from mom and pop stores to major retail establishments — provide a rough but useful measure of business and economic activity. It offers a useful guide in assessing CNMI economic performance.
The latest CNMI Economic Indicators report released by the Department of Commerce shows the following annual business gross revenue in the CNMI based on data from the Department of Finance: $1.829 billion in CY 2006; $2.020 billion in CY 2005; $2.034 billion in CY 2004; $1.914 billion in CY 2003; and $1.869 billion in CY 2002.
Commerce said the latest business gross revenue figure is based on business gross revenue taxes and other income tax collection.
From a peak of $2.610 billion in 1997, annual business gross revenues have been on a steady decline — $2.238 billion in 1998, $2.213 billion in 1999, $2.255 billion in 2000, and $2.117 billion in 2001.
Besides the lack of a long-term economic plan, the government, according to Camacho, is also “too generous” in giving tax deferments and exemptions, including the qualifying certificate program which provides tax abatement and rebates for up to 25 years to qualified businesses.
“The government should have been setting aside emergency funds but it never did; instead, it spent and spent. There is no revenue stream in the near future and I think 2007 will be more difficult than 2006 because besides garment factory closures and the tourism drop, the government has not done enough to correct (mistakes),” Camacho said yesterday.
Government revenue, spending
The general fund revenue or the money collected by the government from taxes and fees in CY 2006 totaled $196.59 billion, while government expenditures reached $195.6 billion.
Among the cost cutting measures implemented by the Fitial administration is the one involving austerity Fridays.
Except for personal and corporate income taxes and excise taxes, all the other taxes and fees posted a drop in 2006 compared to the previous year.
Visitor arrivals totaled 435,494 in 2006, an 11 percent drop from 2005, the economic report said.
The Commerce economic report also showed that the total garment export value totaled $486.5 billion in 2006, a 25 percent drop from the previous year.
Earlier, the government disclosed that CNMI garment industry sales dropped by $170 million or from $662.7 million in 2005 to $492.16 million due to the closures last year of garment factories, including Concorde Garment Manufacturing Corp. and Hyunjin Saipan Inc.
In 2006, the average CNMI hotel daily rate was pegged at $90, from $83 in 2005 and $80 in 2004.
The average CNMI hotel occupancy rate dropped to 62 percent in 2006, from 70 percent in 2005 and 72 percent in 2004.