Marianas Variety

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    Friday, October 19, 2018-4:04:10P.M.

     

     

     

     

     

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Editorials 2018-August-17

The trustee’s right

THE Settlement Fund trustee is concerned about the bill to create a new retirement system for government employees, and how it could affect the CNMI’s ability to comply with the settlement agreement.

Its proponents say the bill is popular. That’s true. It’s also true that if politicians would simply ignore 99 percent of popular measures, many governments around the world could be in a much better financial condition today.

So yes we agree with the trustee. Lawmakers should not pass House Bill 20-157, and if they do, the governor should veto it. The economy is still in recovery mode, and the government still has other more pressing obligations to meet…like the settlement agreement. So no, not yet, not now. Not until the CNMI is out of the financial woods.

Right sentiment, wrong word

THE Settlement Fund trustee believes that the CNMI government’s “reliance” on revenue from the Saipan casino is “imprudent.”

This reminds us of that bar scene in “Casablanca” in which Captain Renault declared that he was “shocked — shocked! — to find that gambling is going on in here!” A gaming-table dealer then approached the captain to hand him his money. “Your ‘winnings,’ sir,” the dealer said. “Oh,” the captain replied, “thank you very much.”

After commending the CNMI government for making timely and regular hefty payments to the Settlement Fund which have allowed it to “avoid draw downs on investments and extended the…Fund’s investment horizon,” the trustee now calls the same government “imprudent.”

The Fund was supposed to be depleted in 2014. Then it was expected to become a pay-as-you-go entity by 2019. In its Sept. 2017 report to the federal court, the Fund’s investment advisor was quoted as saying that if the government “continues to make timely and periodic payments…the anticipated asset depletion date may be extended to the end of 2024.”

The government continues to make regular payments, but the trustee is worried that the CNMI’s income source is “not diversified.” She seems to imply that there were, are, many other potential investors out there who are dying to pour millions of dollars into a remote island with a small economy and small workforce, both of which could be wiped out by an unelected government thousands of miles away.

Over the years, the NMI has been the subject of numerous well-researched and informative economic and investment studies. Especially after the Asian economic crisis in 1998 and the looming exit of the garment industry with the full implementation of WTO rules, the Commonwealth government also enacted laws to attract new investments.  (Casino gaming on Saipan is an old idea first considered and discussed during the TT era.)

But the NMI was, still is, competing with other islands and countries that have more attractive investment climates and potential. Legalizing casino gaming on Saipan, as its proponents argued years ago, was the last resort to prevent the Retirement Fund’s depletion — and protect the retirees’ welfare and livelihood.

“Desperate” maybe, but certainly not “imprudent.” That’s like scolding a drowning man for clutching at a piece of lumber with nails sticking out — instead of waiting for a ring-buoy from a rescue ship that is nowhere to be seen.