FINANCIAL institutions are the heart of modern economies. They act as the pulse for the state of economy. In the CNMI, where there are no credible measures of economic activity, condition of the financial industry is a good barometer to judge the health of its economy.
In recent days, the media are flashing news of alleged irregularities at one bank and another bank’s plan to pull out. It’s almost certain that everyone in the CNMI would be affected one way or another. This situation is not only alarming but also frightening. Its long-term affect on investor confidence is likely to be beyond anyone’s imagination in the policy making and planning circles. However, its positive impact could be pressure on the policymakers to develop plans and policies based on economic principles.
It’s nearly three decades since the CNMI started a commercialized market system yet hardly any realistic development plan was developed and followed. The pace of this development was unparalleled anywhere around the globe. Economic activity peaked without required infrastructure to sustain it. It may not be fair to point fingers on anyone for lack of planning because it happened primarily due to external favorable development factors.
If anyone still dwells on the laurels of the past, he may be far from reality. The circumstances—one of its kind in history—that led to an explosive economic growth in the CNMI probably would never be replicated. So it’s time to learn basic rules of economic development in order to sustain any desired level of economic activity. It may not be easy to do because government resources are dwindling and the demand for public services is exploding. I believe there are scores of people and businesses who are barely keeping their head above water during this hard economic time and would like to see effective actions.
I have just sensitized the economic issues to arouse the attention for an open public debate. It would be also helpful to mention before closing that the CNMI has not gone through all phases of the business cycles in its short development history, so no one can precisely predict or expect what’s ahead.Dr. Mohammad Ashraf
International Resource Economist
Papago, Saipan
