Permanent residency? Bank on it

Gloom and doom? Forget it.

In a letter to the editor on October 24th, I defied the negative position stated by the then SCC president relative to Governor Fitial’s proposal offering permanent residency to bring in more investors to our shores. What most readers don’t understand is his target: the select few, with money.

The previous “open-door” policy primarily brought in tens of thousands guest workers (and TT citizens) who brought little in the way of investments but placed an inexorable drain on the infrastructure and chronic burden to our community. During the “bubble-years” circa 1986-1991 (1996) elected officials then all but ignored the glaring problem. Today’s dire times have taught us the folly of their incompetence.

How do we now fix it?

Permanent residency is the arc toward quick recovery. Perhaps I can paint a more vivid picture of why.

There is an old saying: “Where the Japanese invests the others are sure to follow.”

When taken into account, Nippon investments and the garment industry were the driving force behind our prosperity since the islands were granted commonwealth status three decades ago. Their innate presence attracted other Asian businesses to propel us to where we are today.

Pointedly, it is a little-known fact that the governor’s personal consultant, Shigeyoshi Kato, has been more than impressive in attracting new Japanese monies and revitalizing others (JAL) to help lift our economy from its duress. And without question, the staunch support and tenacity given by the Chinese community and the South Korean business interests have, indeed, been the mainstay in our community, particularly during these trying times.

In my letter of the 24th I pointed out that the young, run-and-shoot kind of businessmen and women from China were loaded with cash and desirous to experience their first American (CNMI) adventure. The other side of the same coin is more impressive: over a dozen billionaires, 300,000 millionaires and an additional 300 million more nationals being lifted out of poverty.

In this follow up entry, I wish to illustrate the meaning of nouveau-riche, luxuriating a mere three-hours away and the opportunities that await us.

So, where is the Renminbi? According to Forbes 400 of China’s richest:

– A quarter on the list are under 40 years old and significantly younger than the U.S. at 46.5 to 65.7 on the average.

– The richest person is a 37-year-young appliance merchant, Wong Kwong-Yu, worth $2.3 billion, followed by Xu Rongnao at $2.1 billion.

– The richest woman is No. 5, Zhang Yin, in paper-recycling, $1.5 billion. The long of it is, if she combined hers with husband and brother in their Nine Dragons company, they would be first on the list.

– Another under-40 millionaire paid $200,000 to be the country’s first space traveler on the Virgin Galactic SpaceShip Two, in 2008. He prefers to remain anonymous.

– Twenty men worth over $250,000 each, signed-up for a love boat cruise along Shanghai’s Huangpu River. Fewer than 30 “good-looking and desirable” women were chosen out of 1,000 that applied. “Appearance is everything,” they profess of the women.

The minimum net worth to make it to the 400 rose to $100 million, up from $62 million in 2005. Comparatively, their fortunes are smaller averaging $950 million versus $13.2 billion for Forbes 500 in the U.S. China boasts of 40 richest women compared to seven in the U.S. They, however, made it the hard way while America’s inherited theirs.

The capitalistic words, “millionaire” and “billionaire” never existed in the vernacular a decade ago. The list grows longer with each passing day and with no end in sight. The amazing thing is not even the economic experts foresaw this phenomenon coming six years ago.

Now you know the fun side.

Get to the point: What does Governor Fitial know that we don’t, and will this new money come to the islands? Let’s evaluate why it should:

– Coming July 1, 2007, the China government will no longer enforce (and the once $5000-per- tourist restriction) the quota limitation on Chinese businesses in the amount of Renminbi they exchange for foreign currencies overseas.
This is incredible news for Tinian Dynasty Casino, their Southern and Eastern China flights, as well as other soon-to-be casinos.

– China’s foreign exchange reserves hit 875.1 billion U.S. dollars by the end of March, the most of any country in the world.

– Along with other (U.S.) banking institutions, the Hong Kong-Shanghai and the Tokyo-Mitsubishi banks revel in the historical milestone for the world’s financial industry, promising to launch hundreds more branches in China.

– Chinese tourists expected to soar 190percent by 2010 to 110 million people per year, generating $94 billion in revenues.
What slice of this is the Marianas Visitors Authority preparing for?

– “Runaway province” Taiwan, enjoying ballooning, multibillions in cross-strait trade with mainland China, doesn’t anticipate giving up this largess for any reason.

– Guangdong, located across the Formosa Strait, made up of rice-paddies and once noted only for its Chinese cuisine, is now the richest province and will surpass Taiwan in its GDP by 2008 with a half-trillion in U.S. dollars.

– Shanghai is in the front rank of the gold trade worldwide.

– China is globally strengthening trade ties such as with its “former enemy” India, Southeast Asian nations and African countries.

But more telling for the CNMI, China is offering financial incentives to South Pacific nations.

– In China 2006, over a half-trillion foreign-financed corporations used $270 billion in foreign funds to fuel the nation’s growth.

Had enough? There’s more, but we’ll leave it for next time.

Who stands to immediately benefit from this soon-incursion of spending? The Chinese owned Tinian Dynasty and another casino soon to come on line in 2008. The municipality itself is ecstatically scrambling to meet this challenge. And what about the promise of new and wealthy investors? Remember the bubble-years?! Let’s see what 2007 brings.

Do we want part of this action? Governor Fitial seems to think so.