“BUSINESS Reference & Investment Guide to the Commonwealth of the Northern Mariana Islands” was published in 1988 and re-printed in 1990 and 1992. According to its author, the late cartographer and economist William “Bill” H. Stewart, the 232-page book is a compilation of historical, economic and geographical information on the CNMI.
“The CNMI’s fascinating history is largely unknown to many otherwise knowledgeable people in the United States and elsewhere,” Stewart wrote. “The islands’ history in many instances is far more interesting and intriguing than the history of some states in the Union as the islands have played a significantly more prominent role in world affairs and geopolitics than many individual states.”
Stewart also noted that Saipan was the last of the former World War II battlefields to recover from devastation, and that process did not start until around 1978 — 33 years (!) after the end of the war. Before the establishment of the Commonwealth government, the local economy was stagnant, miniscule and dominated by the Trust Territory government (administered by the U.S.) which was the principal employer.
“By the late summer of 1970 the island was almost devoid of the amenities of the twentieth century,” Stewart recalled. “There was one black and white television channel available, broadcasting only a few hours each evening; only three food stores of any size with a very limited inventory; one cargo vessel a month called at the port; the airport was an open air tin shack and there were no recreational craft in the lagoon. There were only two hotels, the 56-room Royal Taga [where Saipan World Resort is now located], and the Hafa Adai Hotel in Garapan which consisted of ten plywood bungalows. The number of island restaurants could be counted on one hand. There were very few automobiles on the island and those consisted mostly of second hand, rusted pick-ups. The Fire Department had a single red jeep and there was only one stop sign on Saipan’s roadways. To make an overseas phone telephone call one had to drive to the RCA office in Susupe….”
Stewart said it was Japan’s “great boom period” — from 1985 to 1991 — that fueled the CNMI’s economic growth. “Japan registered huge annual trade surpluses, had an ever strengthening currency and one of the lowest interest rates in the industrialized world. Japanese banks overflowed with money, much more than they could accommodate by relending in Japan itself. It was this money that went abroad and around the world to finance a myriad of projects. Millions were invested in the Northern Marianas to launch the islands on the road to a thriving tourism industry.”
When Stewart’s book was published, the islands for the first time since the Japanese period, were experiencing phenomenal growth. By 1990, he said the combined range of businesses in the CNMI reported total gross revenues of $1.2 billion for the first time in history. That is worth $2.3 billion today. (The islands’ GDP in 2019, post-Yutu, pre-pandemic, was $1.18 billion.) From 1980 to 1990, the total annual revenues reported by businesses in the CNMI increased by 494%.
Stewart also reminded his readers of the (perennial) challenges that the CNMI had to address: a small tax base; dependency on foreign sources for almost all privately generated income; heavy reliance on imports from a variety of countries; little or no comparative advantage.
Moreover, because of the CNMI’s remote location, “the freight costs associated with importing equipment and materials increases the cost of all projects. Sheer distance and the time involved in traversing the Pacific are factors which must be taken into consideration when planning projects.” Stewart noted that the CNMI “is about as far away from the U.S. west coast as, for example, Washington, D.C. is from Cairo, Egypt.”
He said geography “also separates the major population groups of Saipan, Tinian and Rota and fragments the small domestic market, adds to the expense of transportation and communications and limits the cohesiveness of the population. The separation of the three principal islands requires a tremendous duplication of government services as each island requires its own air and sea port, power and water production facilities, schools and other public services which cannot be consolidated.”
In addition, these small islands’ small population was (still is) a major concern for existing businesses and potential investors. “The population of the CNMI is about the size of many communities in Rural America,” Stewart said. “There are not enough people to fill available jobs.” He said a “paradox is inherent in the current labor situation since any successful attempt to stem the flow of nonresident workers could likely slow the pace of economic development as foreign workers are recruited precisely because the local labor supply does not meet current demands.”
Then and now.
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Passengers board a plane at Saipan airport, 1969.
