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Monday, April 21, 2014

When do we begin to create our own prosperity?

Anthony Pellegrino

Last week, along with the Saipan Chamber of Commerce, I met with Office of Insular Affairs director Mr. Nick Pula and Assistant Secretary of the Department of the Interior Mr. Tony Babauta. They discussed their analysis and review of the past years of the financial condition of our government.

By now you have heard that the CNMI government has been miserably getting deeper and deeper in the red. When will it stop and begin getting better? How much more are we going to depend on outside assistance? Meanwhile we keep begging for more U.S. assistance to bail us out. But is that the answer? Are we going to keep begging? When will we begin to help ourselves?

In all the meetings I attend concerning the economy and how to improve it, I rarely hear solid ideas on how to generate more income. Most of the discussions are spent on how to cut expenses, such as reducing government personnel and work hours. While these are vital, we simply discuss how to squeeze instead of how to increase our income. We rarely discuss how we can increase the amount of money coming into the CNMI.

Recall the boom years of the garment industry when we exported millions of garments yearly and had a huge influx of dollars. Remember the $275-million budget years? Then as the garment industry faded, we failed to replace it with another industry. But we continued to spend and spend while the income of dollars became fewer and fewer, thus we are in the dreadful situation we now find ourselves in.

The Retirement Fund is bankrupt, the hospital is in a coma, and CUC is getting more and more expensive. Meanwhile we stand and scratch our head in dismay. Some of us have escaped to the mainland while the rest of us either are lining up for food stamps or are simply dumbfounded as to what to do.

When have any legislators come up with ideas on how to generate funds? When has our governor invited investors here? And I suspect that many of the ones we have now are either sorry they invested here or are eager to leave. Why is this?

Not seeming to be a mister-know-it all, I am going to stick my neck out and explain what I feel we must do to regain sanity and a sound economy. There are only two ways to make money on our islands. We must export goods and we must increase imports of dollars.

Increasing our tourist market is one of the best ways to import dollars. We must strive to improve what we are doing to attract tourists and must make their stay a pleasant and memorable one. How we do this I leave to the MVA who does work hard to increase tourism. But how much does our government invest for increasing tourism? Remember the greater the number of tourists, the greater amount of dollars that remain here.

Guam is increasing their tourists count daily. They expect over 1.3 million tourists this year. How do they do it? Palau is fast improving their tourist market. Yet our market is diminishing. Why? Tourism should be bigger and better yearly in the CNMI. It should be able to reduce most of our deficit. Why isn’t it? We must seriously study this problem. In October our hotel occupancy rate was only 59 percent! Try to get a room in Guam. It is very difficult. They are fully booked.

Another major way to increase our import of dollars is to grow and export agriculture and aquaculture products and value added products. As I have repeatedly written here, we can produce thousands of pounds of fruits and vegetables and value added products for export to our giant market in Guam. But why aren’t we doing it?

There is great opportunity for us to regain prosperity but it will come at a price. That price is the sweat of our brow and labor with our hands. We must turn to our natural resource: our land and ocean. We have over 117,000 acres of farmable land, of which we are currently using only about 3.4 percent of it for farming. We have an ocean that is bountiful with fish. Yet we turn our backs on these two diamonds under our feet.

Much of our farmland is leased to Chinese farmers or nonresident workers to farm for them. Therefore the farms are not fully utilized to generate dollars for us. The oceans are not fished because no one is willing to become a professional fisherman. Thus we remain poor and wonder what to do to improve while wealth lies under our feet.

After spending nearly two years researching the problem, an answer appeared. Nearly two years ago when I was exporting local grown shrimp to the U.S. military commissary, the Admiral of the Navy base approached me and stated: “Daily I import fruits and vegetables from Long Beach, California. As the produce is loaded into the container, it is gassed to slow down the ripening process while the container is being delivered to Guam. After arriving in Guam about two weeks later, it is opened and degassed. And that is the food I have to serve to my troops. Your farmers are only about 50 minutes away. Why can’t they supply me with the food I need?”

The CNMI has a huge market in Guam. Guam is fast becoming an urban society while the CNMI remains a rural society. We have more than one and half more farmers than Guam and over 10 times the farmland.

Guam has over 1.3 million tourists per year and growing. It has a fairly large population of 160,000-plus citizens and a large military population. All of these people eat at least three times daily. So where does this food come from? It is mostly imported from the United States or Korea. Yet we are only a few minutes away. We export almost nothing to Guam. What a wasted and missed golden opportunity! But we go there to shop. Thus we export more our money instead of importing it.

After extensive research, it has been found that the CNMI (Saipan, Tinian, and Rota) are able to produce large amounts of fruits and vegetables for export to Guam. Guam annually imports in excess of $25 million worth of fruits and vegetables. From the CNMI, the U.S. territory exports virtually very little except for some root crops from Rota.

To test the market my associate and I have hand-carried hundreds of pounds of vegetables to Guam and sold them to hotels and the commissary. We discovered two things: one is that the produce we grow in the CNMI is as good as the ones imported from the USA. But the other and negative point we discovered is the costly and difficulty in shipping that produce to Guam from the various islands of the CNMI.

Now there is a way to ship consistently to our huge market in Guam. However it will require the assistance of all of us. We will have to plow our fields and plant our crops. We will have to begin fishing our oceans. These two activities of cultivating our land and harvesting our ocean will bring two major improvements to our society. Our people will be working with pride and dignity, and with the exports, dollars will be imported thereby reversing the export of sparse dollars. We must return to the basic concept that unless we work we will not eat and will not have money. We cannot subside only on handouts. Work or we don’t eat!

But that is the subject of the next article in which I will discuss the air cargo bridge that is being built between every island from Saipan, Tinian, Rota, and Guam. Yes, I know that I have spoken of this before, but we must hear about it often until we take action. It is a sure way to improve our prosperity.

Someone once told me that being poor is a state of the mind, but being broke is only a temporary situation. Which is our situation?

Do have a great week and remember to smile! The smile we flash is always returned with another smile!

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