THE recently issued, federally funded “Marianas Economic Roadmap: CNMI Economic Recovery Study” was prepared by a team of economists and other experts. It should be required reading for CNMI officials and politicians, many of whom either underestimate or are unaware of the complexity of the islands’ economic issues, while overestimating their ability to address them.
This latest report also reminds us that the CNMI “has a long history of creating thoughtful and detailed economic plans.” There is, however, “a critical disconnect or lack of follow-through between [the] CNMI’s economic planning on one hand, and actual economic development on the other, that must be addressed if future planning efforts are to be successful.”
What are the causes of this “disconnect,” and why does it persist? The short answer, in my opinion, is politics — where the “long term” often means the next election. A deeper discussion, with specific examples of how this plays out, should be the subject of another study.
Chapter 2 of the “Marianas Economic Roadmap” asks, “What does economic recovery look like?” It states that “there is wide-spread agreement that government intervention is essential if not critical to spur economic recovery and regain and retain an acceptable quality of life for the Commonwealth’s residents. Business revenues have declined precipitously, workers are facing stagnant or declining wages, increasing layoffs and restricted hours. The CNMI government also is struggling to maintain its workforce and lacks the funding or capability to affect economic recovery on its own.”
Here’s what I wrote on the margin: “Govt meddling mostly caused the prob[lem]s.”
The local tourism industry went into a virtual coma because of government-imposed restrictions in response to the Covid-19 pandemic. Government restrictions are preventing the revival of what used to be the CNMI’s second largest tourism market. Government restrictions have created labor shortages or have made them worse. Government restrictions, moreover, have imposed other costly burdens on businesses big and small.
And what is this government’s response? “Suck it up or we’ll call you ‘pro-China.’ And by the way, you ought to pay more taxes so we can continue hiring voters.”
According to the “Marianas Economic Roadmap,” one “pernicious implication of the current condition of declining economic activity is a sentiment of hopelessness…highlighted in stakeholder interviews. While difficult to measure, hopelessness speaks to the outlook of individuals and businesses to remain in the CNMI and contribute to the economy…. [A]pproximately 20% of those surveyed for this project indicated that they plan to leave the CNMI permanently in the next year. Only 33% of residents believe the economy will improve over the next year.”
I’m pretty sure those numbers could have been less depressing if administration officials and their appointees were included among the survey respondents.
As the CNMI delegate has noted in a recent excellent speech to the chamber of commerce, the CNMI government does not view the local economy the same way the private sector does.
What does this administration tell us whenever it deigns to speak about the local economy? To quote the delegate, “Just wait. Things will get better. Be patient.”
Of course, as the delegate noted, government officials can afford to wait. Their salaries — fully funded and consistently paid on time — come from taxpayers, whether local or federal. Meanwhile, in the private sector, many workers have either lost their jobs or are enduring cuts to their pay or benefits, which are sometimes delayed. Unlike the government, which can tell CUC officials to “offset” its unpaid utility bills, ordinary folks have to pay or they will get disconnected pronto.
Anyway, “things will get better.”
Which reminds me of life in the Socialist Paradise that is Cuba as depicted by American journalist Ben Corbett in his 2002 book, “This is Cuba”:
“In the future, when the economy is better…, there will be food and wealth for everyone. It’s always ‘the future,’ because in Cuba, there is no present…. Just trust in the [leader]. The [leader] will fix it. In the future. The [leader] always tells us everything will be better in the future.”
Meanwhile, in the CNMI, as pointed out by the “Marianas Economic Roadmap,” the “cumulative effects of the economic disruptions in the CNMI have placed the Commonwealth in a precarious position, with economic contraction, reduced labor market participation, and declining business revenue contributing to a prolonged recovery period. Yet, between 2020 and 2024 the economy maintained buoyancy with unprecedented levels of federal assistance in the form of pandemic relief aid (CARES Act, American Rescue Plan Act) and subsequent federal stimulus spending (Inflation Reduction Act, Bipartisan Infrastructure Bill). Through these programs, government spending has stimulated enough aggregate demand to maintain viability in the CNMI. But federal assistance funds are not perpetual….”
Just don’t tell that to the administration.
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