Tell us something we don’t know
DIVERSIFYING the local economy has been a topic of discussion in the CNMI since at least the late 1970s, and it led to the establishment of the garment industry in 1983. At its peak in 1999, the industry remitted $39.3 million (worth about $76.2 million today) in user fees to the CNMI government, in addition to tens of millions of dollars in economic multiplier effects. However, the industry had a limited shelf life due to the liberalization of international trade set to begin in 2005. Four years later, the islands’ last garment factory shut down.
The CNMI government continued to seek new industries. There were talks of peanut butter and shoe factories, a floating casino, seabed minerals, a convention and cultural center, telecommunications, and even hosting a world boxing championship bout.
As the then-acting governor told Variety in 2002, the Commonwealth “should diversify its sources of income as it could not rely solely on the revenue from the tourism industry,” adding that “it’s definitely a fragile industry and so diversifying is necessary.”
Then and now, the list of possible new industries is long, and it included such golden oldies as agriculture and fishing.
The backbone of the local economy itself, tourism, was also diversified by tapping into the then-new markets of South Korea, Russia, Taiwan and China. There were also talks of “edu-tourism” and “eco-tourism,” among other variants of “high-value tourism.”
The most recent attempt to diversify the local economy was the legalization of cannabis. Early this year, moreover, the latest (federally funded) economic study was published — “The Marianas Economic Roadmap.” Like previous reports, it provided sensible and economically sound recommendations that, once again, are in danger of being ignored.
Perhaps, years from now, for a change, the next report could explain why.
It’s not a simple on/off switch
IN 1999, a federally funded economic conference organized by NMC featured several economists and other experts. One of them, Dr. David McLain, a University of Hawaii professor, talked about diversification. He reminded CNMI officials that it “is not an easy task … and does not happen overnight.”
Diversification, he said, “is really hard, and as a result, you cannot expect very much promise very quickly. To actually diversify will take 10 to 20 years.” He pointed out that “the insufficient supply of skilled manpower” was “a factor to be considered by the government when it talks about diversification.”
Since then, the CNMI population has dropped sharply as more people move away. Labor and immigration rules are tighter and come with higher costs. Transportation availability is a major issue. Tourism, the islands’ only industry, continues to shrink, and more businesses are either closing shop or downsizing.
The “great ideas” from the CNMI government, so far, consist of begging the feds, borrowing more money, raising taxes, and talking about the islands’ “bright future.”
Good luck with that. Meanwhile, here’s one thing elected officials can do immediately to help the local economy: Don’t pile more burdens on businesses and taxpayers.
The last thing the economy needs is the government making life tougher for those still keeping it afloat.
