In his speech before the delegates of the Pacific Mayors Conference, the governor emphasized the negative impact of the law on the CNMI.
“For more than 30 years, the CNMI enjoyed a major competitive advantage in having local immigration control. This Covenant provision gave our small island community the tools needed to attract investment and lift up our economy. In the 1980s and 1990s, the CNMI enjoyed tremendous economic growth and was one of the fastest growing economies in the Asia-Pacific Region,” the governor said.
This year, he said the federalization law has already affected potential businesses on the islands, citing the New York-based Bridge Investment Group’s decision to suspend its casino development plans until it is assured that its target major markets of Russia and China are included in the Guam-CNMI Visa Waiver Program.
In a phone interview, Phillip Mendiola-Long, vice president of the firm, confirmed that their $60 million casino-hotel project is on hold.
“We are waiting for the dust to settle,” he said and stressed that there’s no use in venturing into a major casino project if their intended market won’t be allowed to freely enter the islands.
But he said they have secondary plans to build a smaller-scale similar project if Russian and Chinese tourists aren’t included on the VWP.
The U.S. Department of Homeland Security already published the interim final regulation on the Guam-CNMI VWP which excluded Russia and China.
Fitial said the passage of the federalization law, U.S. P.L. 110-229, or the Consolidated and Natural Resources Act of 2008 on May 8, 2008, changed everything for the islands.
“And the consequences are not at all encouraging. This year saw the closing of the CNMI’s last garment factory. By next year, there won’t be a single Russian sign in western Garapan. And in five years, our ethnically diverse and culturally rich population may not be quite so rich or diverse,” he said.
He said his views are also shared by government-paid economists who assessed the impact of the federalization law on the CNMI.
“The economic and social consequences of federalization appear quite grim, and this is not my view alone. This is a view supported by an objective and professionally produced economic report prepared by economists Richard Conway and Malcolm McPhee,” he said.
“The report covered the economic impact of Public Law 110-229 and other federal laws. This grim economic forecast of federalization is also supported by an economic report prepared by economists at First Hawaiian Bank, as well as by at least two reports prepared by the Government Accountability Office,” he added.
