CNMI BUSINESSES BEWAIL ‘RICHES TO RAGS’ ECONOMY

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Chamber of Commerce calls for plan of action

By Haidee V. Eugenio SAIPAN, CNMI (Saipan Tribune, Sept. 2, 2010) - In a span of 30 years, the Commonwealth of the Northern Mariana Islands (CNMI) has gone from rags to riches and is now nearly back to rags.

That’s how Saipan Chamber of Commerce president Douglas Brennan described the CNMI economy in his address yesterday to members of the largest business organization in the islands with some 150 members.

Between the early ‘80s and into the ‘90s, the CNMI rose from obscurity to being the "brightest star on the Pacific horizon," he said, referring to the development of the garment and tourism industries.

A combination of factors, including the Asian economic crisis, 9/11 attacks, SARS, the pullout of Japan Airlines, and poor advance planning combined to cause a spiraling fall into recession by 2000.

By 2010, the CNMI is in the middle of an economic depression, with government budget shrinking to US$137 million from over US$250 million just a few years back. Government resources available for operation will further drop to US$132 million in fiscal year 2011.

"My preference would be for our elected leaders to buckle down and lay out the goals and targets needed to get our economy back on track by 2020 and then execute a plan of action," said Brennan, who is also the general manager of Microl Corp.

Marian Aldan-Pierce, president of DFS-Saipan and a member of the MVA board of directors, said she remains optimistic that there’s "light at the end of the tunnel."

House minority leader Diego T. Benavente (R-Saipan) said the Chamber is spot on when it said the government lacks a plan to get the CNMI out of its present quagmire.

Benavente said calling for a budget summit is still not too late.

A budget summit will bring together the administration, the House, Senate, and the private sector to plan for the future, and to discuss where the needed revenue will come from, industries that could be developed, cost-cutting measures in government, accountability, and tax and business laws.

"It’s also frustrating that about a month after the Marianas Visitors Authority presented its monetary incentive program for travel agents, we have yet to receive from the administration and the House leadership their promised legislation to appropriate US$6.2 million or at least a portion of it to MVA when tourism is supposed to be a priority," Benavente told Saipan Tribune.

He said if the government was able to immediately find some US$4 million to address payroll, it could find at least a few millions to improve tourism-its only industry.

"In my opinion, this is also important because it will help ensure future payrolls. Why is the administration or the leadership not rushing to move this program forward?" he asked.

Rep. Edmund Villagomez (Cov-Saipan), chair of the House Committee on Commerce and Tourism, said his committee has yet to see any legislation appropriating money for MVA’s incentive program for travel agents.

Under MVA’s program, travel agents will be given monetary incentive for every passenger from the Japanese cities of Osaka and Nagoya that they will bring to Saipan during so-called low peak periods.

The maximum cash incentive per passenger is US$100.

Brennan said CNMI elected officials are now targeting rank-and-file government employees "without seeming to give a second thought to ways in which they can reduce spending at their level."

The Fitial administration sent out notices this week to over 1,500 employees who will be subjected to a 16-hour cut every pay period starting Oct. 1.

"The blatant self-interest shown by a select few of our leaders is dumbfounding," he said.

The House just passed a US$132 million budget bill that increases lawmakers’ discretionary funding from US$86,796 to US$130,000 while employees will get a 16-hour pay cut every pay period.

The Senate, which is set to act on the budget bill on Friday, said it will retain the current discretionary funding for lawmakers.

Brennan said cutting salaries across-the-board unfairly penalizes good employees and allows leaders to continue to ignore the long-term problem "that our local government is simply too big."

"With all the various cabinet heads, secretaries, executive directors, directors, executive assistants, special assistants and special advisors, do we really need 20 congressmen and nine senators?" Brennan asked.

He said advance planning is apparently a foreign concept to many past and present lawmakers.

"We need long-range plans that incorporate efficient energy, potable water, cost effective shipping to and from the islands, quality education, fair and equitable enforcement of our laws, a clean environment, tight border controls, and the ability to pay our workers a living wage, amongst other things," Brennan added.

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