Commonwealth Economic Development Authority Executive Director Manuel A. Sablan and CEDA Chairman Frank Rabauliman appear before the House Ways and Means Committee on Thursday last week.
TOURIST arrivals and other economic indicators are down.
This was the answer of the Commonwealth Economic Development Authority’s economic development director, David Guerrero, to House Ways and Means Committee Chairman Ralph N. Yumul, who asked CEDA, “Why are there no outside investors coming here?”
The committee invited officials of CEDA, a semi-autonomous agency, to a meeting on Thursday last week. Yumul said it was not a budget hearing; they just wanted to hear from the CNMI’s “investment arm” about its progress in enticing new investors to the islands.
CEDA Executive Director Manny Sablan, one of the NMI’s Covenant negotiators, said he was “very disturbed” to receive a call from the committee. He said he thought that “maybe many of you are not aware of what we are doing. You can Google CEDA and you’ll get a tremendous amount of information there.”
He added, “I’ve never been asked by the Legislature to appear in a budget hearing. I’ve never done this before. I’ve never met anybody that would question my integrity.”
Yumul assured him that it was not a budget hearing and the committee was not questioning CEDA’s integrity.
“I know this is unprecedented,” he added. “This is the first time we called CEDA, but a lot of us don’t understand CEDA and what CEDA is doing. We are trying to understand the market out there. We are trying to understand why aren’t outside investors coming into the CNMI.”
Yumul said they want to know if there’s an “issue” with the CNMI that deters investors from coming in. They also want to know “how we can improve it.”
Guerrero said, “In my view, it really boils down to financing.” Right now, he said there is no upside [trend] as you’ve been seeing in the reports out there about visitors or tourists coming in.”
All the numbers are low, he added.
He said there are small businesses opening in the CNMI, primarily restaurants, but “it’s not enough to reverse the trend in the CNMI’s coffers. So, that, I think, in essence, is what is holding us back.”
Since he started working for CEDA two years ago, Guerrero said three potential investors have approached him “and really sat down with me, but no application for a qualifying certificate has been filed with us.”
One filed an application, “but it wasn’t complete, so I took that as incomplete,” he added.
Guerrero believes there are “big” investors interested in the CNMI, but they “are looking at…our power situation [and the] high cost there, also the water as well.”
He said potential investors also want to learn about the CNMI’s tax rates. “We have a really low tax structure here and I think that is advantageous for the CNMI, but it’s not enough to move them here unless they have enough customers or scalability to make that switch,” he said.
Yumul asked him if CEDA officials have joined the Marianas Visitors Authority in traveling to tourist markets, such as South Korea, to meet with potential investors there.
Guerrero said, “No, we haven’t traveled with MVA,” which also believes “we should start to market together.”
“It does behoove us to join MVA,” he added.
For his part, CEDA Board Chairman Frank Rabauliman said they have “pretty much been out of the loop” when it comes to economic legislation.
“Unfortunately, I have not seen that working relationship with the Legislature. I’m not just talking about the House. The Senate, as well,” he added.
Rabauliman said many bills that affect the economy have been passed, “but we were never consulted, or at least invited to share our perspective on the legislation.”
“I’m just bringing it to your attention that the board would like to be involved in all these discussions,” he added.
To which Yumul responded, “A lot of us here are new and never really understand many things about CEDA.”
