But McPhee & Associates said its report also included a relief scenario, and suggested a possible path to recovery by 2015.
“This is important because the two scenarios represent a continuum from a pessimistic outcome to a more optimistic outcome,” the company stated.
Sens. Jeff Bingaman, D-N.M. and chairman of the Senate Committee on Energy and Natural Resources, and Lisa Murkowski, R-Alaska and committee member, have asked McPhee & Associates to provide more information regarding its economic impact study that was commissioned by Gov. Benigno R. Fitial using federal funds.
Fitial has filed a lawsuit to prevent the implementation of the federalization law on June 1, and cited the report’s findings as one of his arguments.
“There was a serious misunderstanding of our report reflected in many of the questions. This was that we had only offered one scenario and that was the worst case scenario. This is simply false,” McPhee & Associates told the senators in its letter dated Jan. 14.
McPhee & Associates explained that “much can be done in the continuum of economic outcomes toward a hopeful economic future for the CNMI.”
The report made the following recommendations:
• Repeal or amend the federal legislation to return some immigration and minimum wage control to the CNMI.
• Execute an economically favorable implementation of the laws to preserve an adequate labor force at competitive rates.
• Institute an aggressive visitor industry redevelopment program.
• Seek federal redevelopment funding, technical and incentive assistance.
• Institute more aggressive internal and external investment programs.
According to McPhee & Associates, the “misunderstanding of their report has led to another serious problem because the reviewers recognized only the pessimistic case scenario — they missed some of the more important findings that were implicit in the optimistic scenario.”
McPhee & Associates reiterated that the potential effects of federalization could prevent economic recovery in CNMI for the foreseeable future.
McPhee & Associates answered the nine questions of the senators, including the methodology used in the report, its source of the CNMI population figure, and whether the report was used to support the governor’s federalization lawsuit.
