By Zaldy Dandan – Variety Editor
INSTEAD of arguing with the private sector or downplaying its concerns, the administration is now working with local businesses in pursuit of economic recovery. Rather than insisting it is on the right track while labeling others as “short-sighted” or worse, the governor’s office appears focused on doing the right thing.
As one of the co-chairs of the governor’s revived Council of Economic Advisers put it, they are “not going to reinvent the wheel. All we want to do is use the resources that are already in place, narrow down the ideas, and work from there.” According to the council’s other co-chair, the emphasis “is to draw upon all the plans that are already out there…. [N]ow is the time to execute. We can’t just keep talking about these ideas.”
I’m pretty sure the council will be guided by the latest (federally funded) economic recovery study — the Marianas Economic Roadmap — which reminds us that “Plans do not create economic growth — people do.”
It is important that government officials, politicians, and concerned citizens are repeatedly reminded of the economy’s primary importance in the grand scheme of things. We need more economically literate leaders. The CNMI right now is in financial trouble because its economy is in the gutter. You want to “improve” the CNMI, then you have to find ways to revive its economy. It has been done before. Trying, in any case, costs nothing — inaction costs more.
“In the past decades since the creation of the Commonwealth,” the roadmap stated, “the practice of economic policy-setting and economic policy implementation has not been an institutionalized role within the government. This has resulted in fragmented governance within the economy, with overlapping agency mandates and duplicative responsibilities, hindering progress and inhibiting the Commonwealth’s transition from economic planning to economic development. Addressing these challenges is paramount for effective recovery.”
Now that there is talk of identifying redundant agencies, the government should designate an individual — preferably someone already within its ranks — to be “responsible for coordinating and monitoring economic development activities of the government, ensuring alignment with the CNMI’s broader economic policy objectives,” as recommended by the roadmap.
The government, moreover, “should clear the confusion on responsibilities on economic development policy implementation and directly delegate a single entity to hold the primary implementation responsibilities.” As noted by the roadmap, a “review of existing statutes and resources would suggest that an ideal location for this responsibility is the Commonwealth Economic Development Authority….” CEDA “holds specific mandates for industrial solicitation, maintains investor incentive resources, and is [in theory at least — zd] autonomous from the central government, permitting policy implementation to potentially extend beyond term limited officials. Whichever entity is…selected, the delegation must be clear within the CNMI government, and to the CNMI community, and potential investors.”
The roadmap has specific policy proposals that require legislative action:
• Updating the Investment Incentive Act of 2000 by removing the static targeted industries list and providing CEDA with greater flexibility in “adapting to changes in the global economy and emerging opportunities relevant to the CNMI.” In addition, “CEDA should have the authority to delineate Economic Development Zones to focus incentives on regions most in need of investment, including the Northern Islands, Tinian, and Rota.”
• The roadmap also recommends the removal of “rigid minimum capital investment requirements.” CEDA should be allowed “to establish flexible, industry-specific thresholds that align with the realities of varying development costs across the CNMI. For example, requirements for projects in Saipan could differ from those in Tinian or Rota, where development costs are often higher. This change also ensures that low-capital but high-impact investments, such as those creating significant local employment or reducing reliance on imports, are not excluded from eligibility.”
Other roadmap recommendations:
• Require completion bonds for large-scale projects. This should not be a controversial proposal. “Given the CNMI’s history of stalled or incomplete large-scale projects, all investments granted a Qualifying Certificate…should require a completion bond. This guarantees the project’s completion or mitigates the risks of abandonment. Completion bonds would also ensure that only investors with sufficient financial credibility and due diligence enter the program, enhancing overall accountability.”
CEDA, for its part, “could allow the costs of obtaining these bonds to be covered under the tax rebate or abatement schedule provided through the QC program, further incentivizing compliance.”
• Allow negotiation of QC application fees. “Application fees for the QC program, currently fixed by statute, should be made negotiable by CEDA. This would allow the Authority to align fees with the costs of due diligence, whether conducted internally or by a third-party reviewer. Flexibility in setting fees ensures that the program can sustain itself financially while maintaining thorough evaluation processes.”
• Introduce a pre-application process for investors. “To improve efficiency, CEDA should implement a pre-application process that enables early alignment between investor proposals and the CNMI’s economic and other priorities. Investors would submit a statement of interest outlining their project’s objectives, economic impact, and location. CEDA, in consultation with government stakeholders, would then assess the project’s alignment with established goals and negotiate terms before allowing formal applications to proceed. This process provides clarity and reduces unnecessary delays, ensuring that viable projects advance while those misaligned with the CNMI’s priorities are identified early.”
• Create the CNMI Strategic Investment Program. “A Strategic Investment Program should be developed within the QC framework to proactively target industries that align with the CNMI’s diversification objectives. CEDA would lead this effort by conducting formal studies to identify suitable industries, locations, and permitting requirements. The program would engage the community in planned development concepts on specific sites with CNMI permitting agencies, ensuring that regulatory hurdles are addressed upfront. Once prepared, these pre-permitted projects would be actively marketed to U.S. investors through trade missions, summits, and targeted outreach efforts. This proactive approach positions the CNMI as an attractive, low-risk investment destination while ensuring alignment with community goals and environmental considerations.”
These are all sensible proposals. Of course, lawmakers should conduct public hearings and consultations before passing the legislation. But they better get moving — before next year’s campaign season turns everything into politics.
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