The real question
THE CNMI has been trying to diversify its economy since the establishment of the Commonwealth government in 1978, when tourism was still emerging as a promising economic sector. In his first State of the Commonwealth Address in 1979, Gov. Carlos S. Camacho proposed several initiatives to boost local agriculture and fisheries, including aquaculture, with the goal of developing them into export industries.
In 1983, a different kind of export industry emerged with the opening of Saipan’s first garment factory. At its peak from 1999 to 2000, the garment industry contributed roughly $79 million annually in direct taxes and fees to the CNMI treasury. Adjusted for inflation, that amount would be worth about $152 million today. By comparison, projected government revenue for fiscal year 2026 was initially set at $134.5 million before being reduced to $121.4 million following Super Typhoon Sinlaku.
When tourism was hit hard by the Asian financial crisis in 1998, and with the anticipated departure of the garment industry after export quotas ended in 2005, the CNMI government intensified its efforts to diversify the economy. It organized conferences, consulted economic experts, and enacted legislation aimed at attracting new investment. The Marianas Visitors Authority itself — even when it was still known as the Marianas Visitors Bureau — worked to broaden the islands’ tourism markets by reaching out to Taiwan, Australia, Russia, and, yes, China, among others. It also pursued educational tourism, sports tourism, business and MICE tourism, geo-tourism, medical tourism, adventure tourism, and other niche tourism sectors.
Since 1998, every administration has identified potential new industries and promoted the CNMI at off-island business and investment conferences, including those sponsored by the federal government. The Commonwealth Economic Development Authority, formerly known as the Commonwealth Development Authority, is tasked with promoting and facilitating economic development by marketing the CNMI as a potential hub for technology, finance, and light manufacturing.
This may surprise some people, but the CNMI government has never stopped talking about economic diversification for nearly 50 years. In 2008, the CNMI supported the creation of the Mariana Trench Marine National Monument because it was expected to generate eco-tourism and related economic benefits. A decade later, the CNMI legalized cannabis in hopes of creating a new industry. Last year, the administration released the Marianas Economic Roadmap to identify potential growth sectors and diversify the economy.
The conversation about diversification and a “new economy” has continued and is ongoing. Everyone supports it. The real question is: Where are the new investors?
We know the answer
ECONOMISTS, both past and present, have identified severe and compounding obstacles to new investment in the CNMI. These include a tiny consumer base, high operating costs, weak fiscal and physical infrastructure, and a small and shrinking labor pool — arguably the most immediate threat to the local economy and one of the greatest deterrents to outside investment.
If a new enterprise wants to establish a hotel, a technology service company, or a light manufacturing operation on Saipan, it cannot rely on the local population alone to staff it. However, turning to foreign workers means navigating strict federal caps, mandatory touchback requirements, expensive petition fees, prevailing wage mandates, and the looming 2029 expiration of the CW-1 visa program. For many investors, the numbers simply do not work.
Some argue that the CNMI should seek out “sustainable” economic unicorns — er, ventures — rather than trying to revive an industry in which the Northern Marianas already has well-established experience and know-how.
Fair enough. But if that is the path forward, then the next conversation should be about the deep budget cuts the government will have to make — on top of the reductions already being implemented.
The bottom line is this: tourism is not merely one sector of the CNMI economy. For all practical purposes, it is the private economy, with federal assistance filling the gap everywhere else.
The rest is an economic fairy tale.
Zaldy Dandan is the recipient of the NMI Society of Professional Journalists’ Best in Editorial Writing Award and the NMI Humanities Award for Outstanding Contributions to Journalism. His four books are available on amazon.com/.
