THE Saipan Garment Manufacturers Association has sought the Babauta administration’s assistance to ensure the survival of the garment industry beyond Dec. 31, 2004.
During the Saipan Chamber of Commerce’s general membership meeting yesterday, SGMA Executive Director Richard Pierce said the administration “needs to do something now” to help the apparel business, especially because the industry contributes $72.8 million to the CNMI government in 1999 alone.
Pierce, who is also the Chamber president, said the garment industry’s contribution equates to 34 percent of the government revenues, given a $216 million annual proposed budget.
He said the money circulating in the CNMI will be reduced by over 30 percent if the garment industry pulls out from Saipan.
In his presentation, Pierce recommended that the government should create an office that will gather garment industry data and monitor the business trends.
He said the government needs to keep down the costs of doing business in the CNMI, including the decision of not increasing wages and not imposing new taxes.
“The government should conduct a joint marketing efforts to help prioritize the industry just like what other countries are doing,” he said.
Pierce pointed out that the support of the government will increase the comfort level of the buyers.
The government should also help reduce the value-added requirement from 50 percent to 30 percent to qualify for duty-free entry into the U.S., Pierce added.
He also recommended the pre-clearing in the CNMI of garment goods destined for U.S. ports.
The garment industry, he said, will witness its birth, life and death in a 20-year period since its entry into Saipan in 1983 — unless the government helps.
“By Dec. 31, 2004, the garment companies here will locate elsewhere or simply shut down operations if we don’t do something about it,” he said.
Due to stiffer competition from other countries and worsening economic condition, the Saipan garment industry may lose six to 10 small factories between 2002 and 2003.
He said without the garment industry, the air travel, port, and telecommunications costs would increase, while passenger capacity into the CNMI would decline.
“The CNMI government would have less money to operate, fewer jobs. The cost of basic living needs would increase,” he added.
SGMA held the same kind of presentation on the state of the Saipan garment industry to the Senate, House of Representatives, the Office of the Governor and the Strategic Economic Development Council.
