GUAM ECONOMIC RECOVERY PLAN AIMS HIGH

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HAGATNA, Guam (Pacific Daily News, Mar. 20) - An economic recovery plan released yesterday by Gov. Felix Camacho and his economic team projects that Guam's economy will grow an eye-popping 33 percent, to $3.6 billion, three years from now.

The Camacho administration rolled out what it called ''Ten Strategic Initiatives'' toward achieving its goal, with aggressive tourism promotions topping the list and government of Guam reorganization at the bottom.

''My economic stabilization plan represents a realistic, incremental and measurable approach to revitalizing Guam's economy,'' the governor said, reading a prepared speech.

''While our goals are aggressive, our process is deliberate and calculated in order to measure the true results of a plan that is designed to create thousands of jobs and restore revenues to mid-1990s levels with an economy that circulates more than $3 billion annually,'' he added.

The administration's plan estimates that the Gross Island Product, the value of goods and services produced on Guam, will increase from $2.7 billion last year to $3.6 billion in 2006.

The 33-percent projected economic growth for Guam is a giant leap forward when juxtaposed with the growth rate of, say, Japan, whose recently reported annual growth rate is 2 percent.

Some Guam business leaders have said before, however, that the island's economy is easier to turn around because of its small size.

Still, a Bank of Hawaii economic report projected in 1998 that the average real economic growth rate for dollar-denominated island economies in the Western Pacific, including Guam, would range from 2 to 4 percent.

With Guam's projection, the island would need about 1.5 million tourists in 2006, said Gerry Perez, acting administrator of the Guam Economic Development and Commerce Authority, which presented the plan.

The administration's estimate that the size of Guam's economy was $2.7 billion last year may be high, as Guam saw about 100,000 fewer tourists last year, lost thousands of jobs and saw bankruptcies soar.

Perez said the 2002 GIP was only an estimate because some information is not available. The government of Guam also hasn't had a chief economist for several years to issue GIP figures.

The governor said a chief economist will be hired by his administration.

Guam visitor arrivals reached 1.38 million in 1997 but those numbers have declined since then, to 1.05 million last year, according to Guam Visitors Bureau statistics.

The plan's projection for overall economic growth was finalized before it became almost certain the United States would go to war in Iraq, so does not take into account tourist arrival losses stemming from war worries.

John Dela Rosa, the governor's spokesman, said Camacho considered delaying the release of the plan to account for war-related effects on the island's tourism industry.

But the governor released the plan to meet an earlier schedule and so other initiatives in the plan, such as pursuing more federal funds and addressing federal restrictions that hinder the economy, are not delayed, according to Dela Rosa.

''Even in the war environment, many issues in the plan can be addressed,'' Dela Rosa said.

GVB General Manager Alberto Lamorena has said that during the Gulf War more than a decade ago, Guam visitor arrivals plummeted 37 percent. That was at a time when the Japanese economy was in better shape than it is now.

Although Japan's economy has since weakened, the country remains the largest supplier of tourists for Guam, with Japanese tourists accounting for about 80 percent of all visitors.

''There are clear steps that must be taken,'' according to the governor. ''First, we must stop the downward spiral of our economy through quick and aggressive marketing of our No. 1 industry -- tourism,'' he said.

''We will redefine our markets, expand to include new ones like China and sports tourism, and focus our efforts on improving our visitor plant through beautification efforts and by offering new attractions, such as old HagÂtÒa revitalization and the Perez Marina,'' Camacho said.

Encouraging increased military spending also is high on his plan's list of actions.

The governor said Guam will pursue a full air wing for Andersen Air Force Base, a carrier group for the Navy base on island and the shifting of thousands of Marines from Okinawa to Guam.

Part of the plan requires improving other sources of money besides tourism and the military, and reducing Guam's reliance on tourism.

This year, tourism accounts for 38 percent of the island's Gross Island Product; in 2006 that will drop to 33 percent, according to the plan.

Perez said the administration is developing a mechanism for foreign investors to come to Guam on investor visas if they invest a minimum of $500,000 each and create at least 10 jobs.

The mechanism must meet federal Internal Revenue Service and U.S. immigration authorities' approval, he said.

The administration's economic plan also mentions privatization of Guam Waterworks Authority and other initiatives to place some government services into private hands.

Privatizing Waterworks will help improve the reliability of services and the overall quality of life on the island, which helps attracts investors, according to the plan.

But Patrick Lujan, GWA spokesman, said in earlier written comments that while critics say Waterworks hasn't produced up to standards, the agency is capable of doing the job with no profit.

March 20, 2003

Pacific Daily News: www.guampdn.com 

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