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A Speech By Carl T. C. Gutierrez Governor of Guam

At The Bank of Hawai‘i's Annual Manager's Conference Westin Hotel, Hagatna, Guam Wednesday, January 13, 1999

Good Afternoon · Ronald Leach - Senior Vice President, Bank of Hawaii · Lorraine Okada - Vice President · Al Pickens, Deloitte and Touche · Distinguished Guests · Ladies and Gentlemen

It is both an honor and a pleasure to be here with you today. I would especially like to thank Lori Okada and Ron Leach for the invitation.

I was asked to give a short update today on the Pacific Basin Development Council. An organization made up of the U.S. Flag islands, the CNMI, American Samoa, and Guam. Hawaii has not been active in the group since 1994.

However, I felt that in doing so, I could broaden my comments to include the issue of Pacific Regionalism and give you an update on Guam's current economic outlook.


Every second, as we sit in this room, the world is getting smaller. With revolutions in communications, technology, and computers, the geographical barriers that used to separate our pacific islands from the rest of the world are falling away.

No longer does it cost hundreds of dollars to call the corporate headquarters. No longer do we have to wait a week for a copy of a document to make it here via "snail mail". Our economies depend upon the global shifts of the yen and the dollar, our trade and investment are likewise tied to the larger global economy. And in the midst of this technological revolution, island leaders have found that we can rise to a new level in which we can become players on the international stage. We have many things to offer, from the miracles of medical cures that lie in the corals and sea life of our vast ocean, to fisheries that can feed the world, to warm vacation spots for the family weary of a cold city.

But one of the main keys to our success in this vast global trading post is our ability to work together, as partners. I have recounted several times in the past 4 years, a story about a school of small fish that band together to keep the sharks away. And indeed, that Micronesian tale reflects much of the wisdom that we need to succeed in today's world.

The formation of the Pacific Basin Development Council set the wheels rolling, with the first effort to join the forces of the U.S. Pacific Islands, and pursue common goals. I expanded that in 1995 with the creation of the Council of Micronesian Chief Executives. Now, in it's fourth year of operation, we are beginning to see some real progress. The amazing thing is how far we can move as a group.

Previously it was unheard of in international protocol to have presidents of independent island nations and governors of territories sit down at a table as equals, set aside the confusion of a dozen different political statuses, and simply talk about ideas that will benefit the people of the pacific.

In the spirit of regionalism, and through both the PBDC and CMCE, we have managed to solve many problems, come to each others' aid when needed, and build a strong foundation for the 21st century.


Our ability to battle the effects of El Nino which has caused droughts, threatened life, and moved much of the pelagic fish from the Marshalls to Kiribati was greatly enhanced by our cooperative efforts.

Through the PBDC we established the "Pacific El Nino Applications Center" - a center that is now the model for seasonal climate forecasting in the United States.

Our work together in Coral Reefs has gotten us recognition from none less than the President himself, and all of Congress, as the mainland States turn to the islands of the Pacific to learn how to be better stewards of this precious resource.

And in fact, through grants and joint programs we are not only working toward rebuilding our reefs to the pristine conditions of years past, we are also finding that there is precious medical and scientific information waiting to be discovered.

There is one project now underway at the University of Guam, in which a substance is being extracted from a rare type of sponge that only grows in the waters off Guam.

The substance is known to reduce inflammation, and is valued at over $3 million dollars an ounce. And we can find other cures too, as we continue our collaboration, a partnership that has resulted in increases in both governmental and private funding.

Through continued research and emphasis on coral reefs throughout the Pacific, we could very well begin to discover cures for disease or discover other scientific treasures.

And there are other areas of marine biology that are beginning to show signs of promise.

Just this week, a new company announced it is starting up on Guam -- in the business of aquarium fish. Did you know that Japan imports over $30 million dollars worth of aquarium fish from Florida ?

Imagine how much cheaper and faster we could do the same job here in the Pacific! Christmas Island in Kiribati has already gotten its aquarium industry going and with some regional cooperation the Pacific could quickly take over as the ornamental fish center of the world!


Our most important task as a pacific community, however, is our collective work on regional economies and trade. As a region we have made great strides in maximizing our strengths and sharing ideas, understanding that working together - everyone will benefit, just as a rising tide raises all boats.

This coming March, representatives of the islands will be gathering in the Marshalls for the first CMCE Economic Conference. This will be a landmark event where, for the first time, the Pacific region has an opportunity to develop long-term economic strategies that will benefit all of the islands.

This conference was spawned by the interest of other pacific island leaders who saw VISION 2001, the plan put together by various sectors of Guam's business and government community. It became apparent that if a long-term economic blueprint for Guam could help focus local efforts, that by replicating this process for the region, we could better manage our futures.

Right now, the focus of our efforts on Guam is to create a strong alternative industry in the fields of finance and telecommunications. As most of you are aware, we have spent the last two years putting in place the necessary laws, regulations and marketing efforts needed to develop Guam as the financial service center of the Pacific. This is a long and detailed process but we are committed to see it through. In Bermuda, it took 10 years. But with the right environment, Captive Insurance soon overtook tourism on that Caribbean island, providing 17,000 well-paying jobs. I must give much of the credit for moving this along, to Al Pickens, who is with us here today. And I think Al will agree with me when I say that Guam's economy will only succeed if more individuals in our business community come to the table with ideas, commitment, and energy.

There are many other familiar faces in this room, like Lorraine, who have also put a lot of energy into helping find solutions. In the coming years . . .we will need more of that from all of you if we are to succeed.

And for Guam there are so many advantages that will help us succeed, the greatest of which is our position as "America in Asia." Our strategic military value has since matured and now Guam is being recognized equally for its Strategic Economic Value! It is a value that is being recognized worldwide and holds much promise.

One project in development that has the potential to revolutionize the Internet by creating a world-wide fiber-optic super-network is already planning to set up a hub on Guam. This new technology would speed up communication, greatly increase the amount of data that can be sent, and drastically lower internet and long distance telephone costs. Guam would become one of three global land-based hubs because of our proximity to Asia, and our status under the American flag. The creation of this hub means more jobs, lower costs of doing business for everyone, and a brave new world of opportunity for everyone.

In the meantime, however, we must continue being good stewards of our main industry, Tourism. Just Monday, I joined with Continental Airlines in announcing an increase in seat capacity from Narita to Guam by 17 percent. That is two more flights per week starting in April. This weekend, I will be leading a small delegation to Japan where we will meet with the other signatory airlines to work out ways in which we can bring more visitors into Guam. With the stabilization of the yen and with the talks starting this week between Japan and European leaders, there is much optimism that we have just about reached the bottom of this Asian Economic slump. Now is the time to reposition ourselves to take full advantage of the upswing that is sure to begin in the next two years. Government is doing its share. I know there may be some inconvenience but once the project is done by the end of this year Tumon will rival the best stretches in Hawaii.

And along with our commitment to increase marketing efforts and improve our product, private companies are continuing to invest as hundreds of new hotel rooms come on line and new attractions such as Gameworks and the Aquarium open up this summer.

Yes, we are all feeling the effects of a slump. But as they say in marketing circles, now is the time to get aggressive. And while we work hard to bolster our economy we continue to put stock in our Pacific Regional approach, expanding even further our ideas for economic diversification.

Just as important, too, is this government's commitment to free enterprise and to the business community. Gone is the wage economy of the past, where Guam depended almost completely on military spending and federal grants. Through our private industries we have built a $3 billion dollar economy.

And just as we weather the storms together, TOGETHER, we continue to build this economy.

But we can only accomplish this with a consistent message to investors and a consistent commitment to the business community to provide a level playing field for everyone. No more can our Legislature play the old-boys network and protect their favorite companies.

There has to be a commitment to fairness and a re-write of business and banking laws by our Legislature to allow ALL businesses to flourish.

This administration stands ready to make that a reality.


Along with our economic plans, the PBDC has also been a focal point for our efforts to increase the visibility and "political clout", if you will, of the Pacific region. One of our ideas that cuts across organizational lines is the strengthening of our collective voice in Washington. The first phase of the program is the "Georgetown Initiative" which establishes academic links with one of the top universities in our nation's capitol. In addition to bringing more national attention to the issues of the Pacific Islands, the program also expands educational opportunities for Pacific Islanders. By next year, there will be a new undergraduate course focused on the Pacific islands named after American Samoa's late Governor Peter Tali Coleman. Heading up the project will be Retired U.S. Navy Admiral William J. Crowe, the former Chairman of the Joint Chiefs of Staff, and former CINCPAC.

And there are more plans in the works this year, including the establishment of a Washington arm of the CMCE and increased efforts to get a Pacific Agenda on the table of decision-makers.


What will the future hold?

I foresee new agenda emerging from this Pacific Regionalism in the 21st Century. No longer will the barriers of space and time hold us back. Right this moment our medical professionals from Guam Memorial Hospital, UOG and around the Pacific, are working to link our islands through computers so that telemedicine can save lives in even the most remote of locations.

Educational opportunities are also expanding with these technologies. I foresee a time in the next few years when elementary students will be sitting in a classroom in Pohnpei, sharing ideas with students from Guam, Samoa and Chuuk and getting advice from a teacher in New York. Already our University has a program like this, and with regional cooperation, it will only grow.


Ladies and Gentlemen, George Orwell's 1984 is a thing of the past, and even Prince's song "1999" is about to become old hat. Today's manager must learn to think outside of the box and dream of the impossible.

I charge you all during this conference to defy the limits of conventional logic and think about the opportunities that we can only dream of today. For I believe that these dreams can and will become Reality in the coming millenium.

Thank you all, Ladies and Gentlemen, and I wish you great success during the remainder of your conference.

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