“THE Northern Mariana Islands are experiencing their most challenging economic status since the birth of the Commonwealth in [1978]. By definition, the CNMI is in an economic depression unmatched even by the Great Depression of the United States in 1929-1933.”
That’s from the federally funded, 249-page Comprehensive Economic Development Strategic or CEDS Plan created in 2009 by the Commonwealth government through its Comprehensive Economic Development Commission, which was assisted by a U.S. management and economic consultant. Also in that year, yet another CNMI economic restoration summit was held, and the general public was asked to comment. In addition, public hearings were held on each of the three main islands. Private sector input “was also solicited through several industry associations meetings,” and other “pertinent members of the communities that comprise the CNMI were included, briefed and afforded the opportunity to provide input into this plan.”
Compare that to the current governor’s “pivot” decision, which was first announced to the U.S. military instead of the CNMI people, who were not consulted about it. (There was no mention of “pivot” in the 2022 InDem unity pledge for the runoff election.)
To diversify the local economy, the 2009 plan identified four “new” industries: agriculture, aquaculture, a call center and educational tourism. The CNMI also participated in the Office of Insular Affairs Annual Islands Business Opportunities Conference, which “provided the CNMI an opportunity to present on several of the CEDS projects to potential investors and private partners in an effort to bring these projects to fruition. In addition, the CNMI had the opportunity to speak on many of the benefits of doing business within our islands. This forum proved to be a successful forum which allowed the CNMI to advertise its economic projects and goals to a wider regional base.”
Like most economic plans for the Northern Marianas — and such plans have existed since the TT days — the 2009 CEDS proposal was thorough, analytical and candid:
“Despite various economic studies and efforts by the local community over the years to identify new industries,” it said, “the CNMI has not been able to attract new investors or develop any other major industry other than tourism.”
The CEDS also pointed out that by “its very nature, tourism is fragile, seasonal, and is dependent on stable air service. Affected by events beyond the control of the local government and other stakeholders in the islands, tourism can rise or drop depending on the weather, regional economic conditions in tourism source markets, world political instability, terrorism, competition, accessibility and cost of labor, fuel prices, and stability of international and inter-island transportation. Of all the factors mentioned above, unstable air service has had the largest impact of all.”
Still, the CEDS plan stated, “the CNMI’s tourism industry is maturing — no longer solely dependent on one strong market source for visitors, but more exposed now to regional and global market trends,” referring to MVA’s efforts in those days to tap new markets such as China and Russia while strengthening the more reliable South Korean market. “The Northern Marianas as a leisure destination has reached a stage wherein it must strive not only to diversify, but keep up with competing destinations in terms of the one factor it can most easily control: destination enhancement,” the CEDS plan added. It’s a recommendation that the CNMI government has been pursuing since the late 1990s.
The CEDS plan also reiterated tourism’s importance to the local economy by pointing out the industry’s “large ‘multiplier effect’ on other vital sectors of the economy such as retail, services, and government….” Tourism “has become an integral part of the daily lives of the people of the Northern Marianas. Creating jobs at a ratio of approximately (1.79) jobs in the community for every (1) job in the tourism industry, it opens up various business possibilities that serve to strengthen the economy and provide livelihood for the island’s residents.”
Today, not surprisingly, the economy remains down because tourism is still down compared to the pre-pandemic years.
In 2009, the CNMI had to cope with the loss of air service from Japan and economic events beyond the islands’ control, which included the total loss of the garment industry due to WTO rules. The CEDS plan noted that the CNMI government had lost over 35% of its budget. “These events and the rising cost of power in the islands have contributed to a substantial population decline, estimated at over 20,000 people leaving the Commonwealth in the past several years. Once nearing 78,000, the current population is estimated by economists to be approximately 50,000 to 55,000 in 2009. The decrease in population has proved to be a challenge for the local government as well as businesses that are facing declining markets.”
Today, the CNMI population is estimated to be around 50,000. The actual number is most likely around 45,000 or even less.
In 2009, in any case, the CNMI also had to deal with the federalization of immigration and minimum wage, which would further restrict its economic development options. But back then, the CNMI was optimistic that the planned military buildup on Guam would create new economic opportunities. That was 15 years ago. The actual military buildup turned out to be a slow-motion, drawn-out and piece-meal activity that is still ongoing.
What finally revived the local economy starting in 2012 was not a “revitalized” Japanese tourism market nor any of the projects identified by the 2009 economic plan, but the growth of a new tourism market, China, and the entry of a new major investor. But both were done in by an unforeseen event: the Covid-19 pandemic and the global (over)reaction that triggered economy-killing restrictions.
What this and other similar plans teach us has been known by wise people since ancient times: If you want to make God laugh, tell Him your plans.
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