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OPINION | The NMI economy

NO, it is not the “It’s the economy, stupid!,” nor is it politics, but it is the stupids in “we” all.   The stupids in “we” that caused all financial malaise of the commonwealth government in answer to former NMI Supreme Court Chief Justice Jose S. Dela Cruz’s and my NMD-rights warrior friend Daniel O. Quitugua’s concerns.

We are not in an economic downturn, so as to imply that it will rebound. The economy is in a state of equilibrium, where it should have always been, based on the very limited resources our islands have that have been exploited so far but have yet to be fully exploited. Full exploitation, however, is not the same as an economic rebound or recovery.

We have been having an artificial economy powered in part by federal monies pouring into the economy. So that when federal monies allocated for a fiscal year are fully expended the economy will contract to reach a new equilibrium. It is plain stupid to brag that we have been granted a smaller percentage to match federal funding, which the federal government has agreed to the lower matching percentage, when the allocated amount remains constant. That is, if the federal government sets aside $20 Million for Medicaid for a given fiscal year, it does not matter whether we get it all lump sum with zero percentage on our part, or otherwise at a low percentage, because once we expended all the $20 Million then that is it for that fiscal year. This is what is happening now with the Medicaid program — NMI health official told Congress that they have run over a cliff and are in a freefall.

Poor CHCC is now charged to handle the Medicaid-paid medical assistance it will have to extend by law but will never be paid the federal and CNMI contributions for the remainder of the fiscal year, because federal allocated moneys have been completely spent and the CNMI government never made any payment to CHCC to begin with, never ever. Medicaid monies are completely exhausted and Medicaid beneficiaries will have to pay or self-insure (like other self-insured patients) 100 percent of any medical services received from CHCC — it has to be fair to its self-insured patients under the constitutional equal protection of the law clause who are billed 100 percent of the costs of medical services and not write off the would-be federal contribution portion and absorb only the would-be CNMI contribution portion. What compounds all this is that we knew that the Affordable Healthcare Act (Obamacare), which increased the cap for the CNMI by $18 Million per annum, will end this fiscal year and that now we will revert back to block grants and lower cap, which even back then the CNMI had still not been able to meet its local matching requirement.

On another front, our economy is also powered by foreign investors’ monies. Our islands have no factories manufacturing anything because we have no natural resources that we could manufacture or even exploit that could be exported and to infuse cash into the economy. Tourism is the only industry we have that brings in cash and the hotels built with foreign investors’ money are our “factory” — in actuality, tourism is a service industry and not a manufacturing one. The more hotels built the more tourists can come and the more cash is infused into the economy. This cannot happen if expiring hotel leases on public land are renewed for renewals do not result in new construction of hotels.

Expired (Marpi land) and expiring public land leases of hotels should be sold to NMDs at a discount to continue the leases with the existing tenants who should be made to pay rents in accordance to market-set rents, which are probably higher than the existing rents. The difference in higher rents and the rents that would pay for the discounted sale price, with the land to be put up as collateral, may be appropriated to pay debt obligations to be obtained and invested in new construction of hotels on the site (with the same site, too, put up as collateral) designated by Imperial Pacific International to situate its casino-resort structures of 2,000 world-class rooms in Marpi — IPI recently has been allowed to have a minimum 10 percent controlling interest which the NMDs hotel owners can be partners in part of the remaining 90 percent controlling interest in the casino-resort development in Marpi.

Since IPI under the casino license agreement has three sites on which to site its casino-resort development, the southern part of Saipan too can be exploited to its full potential with the private landowners brought in as partners in the development together with the sale of the huge public land there to the same landowners that could be incorporated in to the total development of the whole area of another (or more) 2,000 world-class rooms and golf course. This is an economic development made in part by locals that MPLT and DPL may never be able to accomplish or surpass. And, the CNMI government may also benefit from all this to lift off some of its debt obligations — it just takes some creative financing and structuring…it is a no-brainer even the stupids in “we” can grasp. Comprende?

The writer is a resident of Kagman, Saipan.