NMI faces unprecedented crisis 

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THE global coronavirus outbreak presents unprecedented challenges to the CNMI, Hive Analytics chief economic consultant Matt Deleon Guerrero told the Board of Education meeting on Wednesday.

“We have never been in a position like this with our economy before,” he added. “And we are just at the onset of this most recent economic crisis…. The [small] size and scale of our economy doesn’t give us a whole lot of tools to work with.”

In the early 2000s, he said, as garment factories on island were shutting down, the CNMI government ramped up the tourism industry to somewhat minimize lost revenue.

During the Great Recession that started in 2008, he said the CNMI received a significant amount of federal stimulus funds through the American Recovery and Reinvestment Act.

Since then, he said, the CNMI economy has depended on the tourism industry. But the coronavirus outbreak has hit the islands’ two main tourism markets, China and South Korea.

“We are losing those numbers [tourist arrivals] and there are additional flight cancellations,” he said.

“We don’t know when the threat and concern about coronavirus are going to dissipate,” he said. “When the economy is not generating the revenue that it needs, the government needs to make difficult decisions to survive.”

The private and public sectors, he added, are trying to figure out how to make the current situation work. “When we are dealing with issues relating to the government budget and budget requests, we need to be reminded that this is not the same disaster that we have had before. This is potentially something new with fewer tools at our disposal to mitigate the effects,” Deleon Guerrero said.

“There needs to be a full picture about the total economic circumstances facing the community at large — employment, consumer debt, tax revenues, and the ability to afford essential services like public safety, the hospital, and Medicaid payments,” he said. He told the BOE members and other education officials that “we have to brace for what could be terrible circumstances that are going to be painful — we need to start considering what is the appropriate policy that will be able to protect the entirety of the system.”

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