Worst ‘economic strategy’ ever
TOURISM arrivals are so dismal that even MVA — which is tasked to improve tourism numbers — doesn’t want to talk about them. Not too long ago, the governor sounded gung-ho about the “new markets” that MVA could “tap into,” while ignoring the concerns of the local business community. “We cannot continue to be looking at things just for instant gratification,” he said, adding that U.S. military projects would be “rolling out soon,” and that the CNMI must create a “really sustainable economy.” He said all that in September 2023. Since then, the administration has pushed for tax hikes; spent federal funds it earlier said were already depleted; borrowed money from a bank while indicating that it may take out another loan; lifted a modest austerity measure in an election year; and stepped up its panhandling attempts in the U.S. capital.
So much for shunning “instant gratification.”
Apparently, the administration also believes that creating a “really sustainable economy” requires a deepening fiscal reliance on Washington while spending federal funds mostly on construction projects and training programs for jobs that may or may not exist locally.
As the dismal numbers from MVA, HANMI and businesses show, the administration’s “economic strategy” is as effective as bailing water with a sieve.
Clearly, there is a need for a new way forward, but it cannot come from an administration that keeps pushing on a door marked “pull.”
Businesses cut costs while the government touts profligacy
IN the real world, no one can defy arithmetic. As Kensington pointed out in its notification letter to the CNMI Department of Labor, due to “unprecedented business losses,” the hotel must cut costs, including through layoffs and furloughs. Compare that to politicians talking proudly of reversing fiscal restraints amid a persistent economic downturn. Many businesses are reducing work hours or their workforce while the government is proposing a new fiscal year budget that is higher than the previous year’s.
How is that possible? Simple. The government makes revenue assumptions that may or may not pan out, but it will spend based on them anyway. No legitimate business entity can operate like that and expect to remain efficient — or even viable. But unlike businesses, the government can — or at least it will try to — take other people’s money through “legalized” coercion; that is, by imposing taxes and/or fees.
Based on its mostly muddled pronouncements on the subject, it’s now painfully obvious that the economy is not the administration’s primary concern. Its main goal is to collect enough revenue to prop up a bloated and unsustainable government structure — at least until after the next election.
The CNMI government badly needs a reset.
