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Thursday, April 17, 2014

Ada: Monument economic data ‘speculative’

CNMI Commerce Secretary Michael Ada on Thursday pointed to a host of shortcomings he sees in an economic analysis released by the Pew Charitable Trust that details the potential economic benefits of the White House’s proposal to establish a national marine monument in the Northern Mariana Islands.

In an Oct. 20 letter to Coastal Resources Management director John Joyner, Ada says the study, penned by University of Guam economist Dr. Thomas Iverson, is based on hastily analyzed information that might be outdated or invalid. Moreover, he says, the study includes adjustments to certain economic figures Iverson viewed as “overly optimistic or a poorly constructed measure of multiplier effects,” adding that these changes cast doubt on the accuracy of its findings.

“The report provides figures which are speculative in nature and applies a simple economic model to derive a projected estimated value of the proposed [monument],” Ada writes.

In his report, Iverson detailed a host of potential benefits the proposed monument could hold for the CNMI. Among them, Iverson said the monument could attract $10 million each year in spending to the islands, much of that derived from a possible increase in tourism, and create new jobs. In contrast, he wrote, the costs associated with the monument could be comparatively low, at around $1 million.

Yet in his rebuttal of Iverson’s analysis, Ada notes that rising fuel costs could raise the price for any visitors to the CNMI who might wish to travel to the monument and the only reliable source of funding linked to the plan would be the federal government’s operating budget for managing the waters.

“Due to a quantifiable rising trend in the cost of travel within the CNMI, it stands to reason that accessibility to the [monument] for purposes of tourism will be severely limited, thus impacting the projected estimates of additional sales revenues and indirect job creation as a result of a monument designation as stated in the report,” Ada writes.

In addition, Ada points to the report’s omission of data on the potential economic value of the resources within the proposed boundaries of the monument, resources to which the business sector could lose access if the plan moves forward.

“While the report is optimistic about the potential economic value of [the monument], it doesn’t acknowledge any potential economic value that may be sacrificed as a result of inaccessibility to resources should [the waters] receive monument designation,” Ada writes. “In times of economic despair, it is natural to favor any project which would have an economic benefit to the CNMI; however this proposal does not provide that particular dynamic.”

Ada’s analysis comes after Rep. Madeleine Bordallo (D-GU) and Gov. Felix Camacho of Guam this week came out in opposition to the White House’s plan. President Bush is expected to issue a decision on the monument sometime before the close of his term in January.

A spokesman for the Pew Charitable Trust declined to respond to Ada’s analysis, saying talks on the monument are now in the hands of local government officials and White House staff.

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