TWENTY-SIX years ago, a federally funded economic conference was held on Saipan — at the Hyatt, a brand name that no longer exists on the island. Among the topics discussed during the two-day gathering were the Japanese tourism market, which now barely exists, and the garment industry, which has long vanished. Among the presenters was the president of DFS Saipan, which will shut down next month.
The guest speakers also included other tourism industry executives, business community leaders and economists. Their mission was to come up with recommendations that would help revive the local economy, which was hit hard by the Asian currency crisis. Up until then, the islands had enjoyed seemingly endless economic growth, so when Asian economies started collapsing, the CNMI didn’t know what hit it. In particular, the islands’ top two tourism markets — Japan and South Korea — experienced an alarming drop. In August 1998, Korean arrivals were down by 83%. The Korean market “has pretty much evaporated,” an airline executive said.
At the economic conference, Jack Peters, the director of NMC’s Business Development Center, delivered the introductory remarks. Reading them today made me realize how truly bad things are for the CNMI. Back then, they talked about what the CNMI could do to improve its economy. Today, most of the talk is about how the feds could pay the CNMI’s mounting bills.
“Let’s look for a moment at our background,” Peters said. “The first thing we want you to think about is this: Historically, the CNMI has economically outperformed every U.S. territory or insular area, some states, and most of its Pacific Island neighbors. [T]he CNMI took the hand it was dealt and responded accordingly. It used its status as a Commonwealth under the sovereignty of the United States. It used its proximity to Asia; it used its conditional duty-free access to U.S. markets; it used tax incentives; it used its access to foreign capital; it used its ingenuity; and it sharpened its entrepreneurial spirit. No transgression or allegation, by any industry, by any company or by any individual, can nullify this achievement by the CNMI.”
In his remarks, then-Governor Teno — who was as economically astute as the previous chief executives, Lang Tenorio and Larry Guerrero — acknowledged the severity of the CNMI’s economic crisis. He said the islands were trying to cope with “external factors beyond [their] control.” However, he said, “we cannot just sit back and wait. We cannot afford to watch the tide go in, and the tide go out, and do nothing.”
Governor Teno said the CNMI “must be flexible and encourage innovation, and adapt to constant change. Our islands can benefit from the…information super-highway. We must begin to build a new infrastructure — one that will enhance the ability of our government and business community to reap the benefits of…high technology.”
He also mentioned the work done by the special committees he created to tackle Finance and Information Technology, the Free Trade Zone, Tourism and Entertainment, Agriculture, Fisheries and Aquaculture, Aviation and Infrastructure Projects. “We need to develop a diversified economy,” Governor Teno said.
Potential new projects included a sound and light show featuring island dances within an island convention and cultural center; an aquarium and underwater marine observatory; a replica of the old sugar train; an aerial cable car to Mount Tapochao; a dive and sport fishing facility in the Northern Islands.
“My administration,” Governor Teno added, “is always willing to work with our private sector.” Unlike other officials we know, he actually followed through on that.
Among the questions asked and comments made during the conference:
“We should cut back on government employees and payroll to funnel more funds to business incentives.”
“Why don’t we attract Chinese tourists? … Japan Airlines is doing this.”
“Why is CNMI risky?”
“There is a need for improvement in tourism sites and facilities….”
“Local produce is more expensive than imported….”
“Explore food processing plants and export products related to coconut as raw product.”
“We should develop a famers and fish market as a tourist attraction (similar to San Francisco’s Pier 39)….”
“Re-educate…there should be dignity and honor in all forms of professions.”
“Good and professional attitudes should be instilled early in the educational process — college is too late.”
“The government’s objective…is to provide services, not more jobs.”
“There is a need for change in work ethic.”
“Reduce hoops…to start a business.”
“How do we streamline the business licensing process — half a dozen trips to the same government agencies?”
“How can economic activity increase with so many barriers?”
“There is too much red tape or over-regulation in government agencies.”
“Larry Hillblom tried eco-tourism and it didn’t work.”
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