The GAO, the investigative arm of the U.S. Congress, also noted in its 133-page report that relevant federal agencies involved in the federalization of the CNMI should get critical data about the islands’ labor market and foreign investment.
“The CNMI government comments also inaccurately stated that the report predicts a substantial decline in the CNMI economy as a result of the legislation. We believe our methodology is a sound approach for analyzing the potential impact of federal implementation decisions on the CNMI economy,” the GAO report reads.
The Fitial administration claims that the GAO’s GDP simulation methodology was “inadequate,” “faulty” and “ignores recent evidence of recovery.”
In a prepared statement, Gov. Benigno Fitial said the GAO’s findings aren’t useful anymore as the federalization law will soon be implemented.
“With respect to the report’s prediction of adverse impact on the CNMI economy, we urged the GAO not to publish this economic analysis and its projection of serious adverse impact on our community,” he said.
According to the GAO, the population of foreign workers has steadily declined since the early part of 2000.
“The number of foreign workers in the CNMI has fallen in recent years prior to the [federalization] legislation’s passage, owing in part to declines in the garment industry and challenges in the tourism industry. From 2000 to 2005, the number of noncitizen workers… dropped from about 35,000 in 2000 to about 28,000 in 2005,” its report stated.
As of June 2008, the CNMI had 18,942 documented foreign workers. With fewer business and job opportunities around, the CNMI’s unemployment rate rose to 8.3 percent in 2005 from 5.1 percent a year ago.
“The percentage of people below the poverty level in the CNMI rose from 46 percent in 1999 to 53.5 percent in 2004. Furthermore, the CNMI continues to have lower income and higher unemployment and poverty rates than the mainland United States,” the GAO report stated.
