Summit identifies 4 alternative industries for CNMI

The pre-economic restoration summit identified agriculture, aquaculture, educational tourism, and call centers as four alternative industries for the CNMI, which now relies heavily on a dwindling tourism sector to fuel its economy after the demise of the once almighty garment industry.

Lawmakers and other government leaders on Friday identified ways and policies that will help develop these four industries identified by the private sector during a similar session two weeks ago.

Minimizing bureaucracy or the runaround time for investors to secure permits and business licenses, investing on infrastructure especially power and water, and ensuring that laws and regulations are enforced instead of amending them all the time, were among those identified by participants to help propel these alternative industries.

Also among the possible legislative actions considered were subsidies for actions or transactions completed in each industry, minimizing incentives which guarantee funds at the onset of a company’s startup, and how the Legislature can shift some of the tax collected by the government to workforce training.

But for House Speaker Arnold I. Palacios, helping to develop these industries is not all about coming up with new legislation or laws, but reviewing “what has already been done in the past, why some of them failed, and why some of them succeeded.”

“For example, we should ask, what happened to the agriculture and fishery industry, which already has very generous incentives? What will it take to further develop this industry because it’s not new…What kind of land mass is needed, what types of crops and experts are needed,” he said.

He also cited the need to revisit the agricultural development plan developed by experts from Hawaii and Guam years ago.

“It’s going to take an entrepreneur to make these alternative industries succeed, with the help of the government,” Palacios told Saipan Tribune. He also said that an information technology industry should also be seen as an alternative industry.

Friday’s legislative/government session of the pre-economic restoration summit held at the Pedro P. Tenorio Multi-Purpose Center in Susupe drew the participation of 11 senators and House members, along with about 20 other government officials.

Commerce Secretary Michael Ada said the legislative/government session hoped to “identify policies or legislation that will move these industries.”

“It’s all about how should we strategize to develop these industries” he added.

Results of the private sector and government sessions will be presented during the April 2 and 3 Economic Restoration Summit.

Guam Lt. Gov. Mike Cruz will be the guest speaker at the summit, to discuss business opportunities brought by the military buildup on Guam, Ada said.

Representatives from the U.S. Small Business Administration and the U.S. Department of Agriculture may also be present at the summit as resource persons, he added.

Ada, however, told Saipan Tribune that the government needs to be cautious in giving out incentives to industries in these tough economic times.

“We cannot continue to give away things we don’t have, and let’s not give incentives for everything…We need to be more thoughtful of what we give. We don’t want to tell the Legislature what to do but we hope they’ll give some thoughts on legislation needed to help these industries,” he said.

During a breakout session, lawmakers and government divided themselves into four groups, each tackling the viability and the ways to develop one of the four identified alternative industries.

The multi-billion military buildup on Guam, for example, provides opportunity for CNMI farmers and ranchers to sell their fresh produce to the military, similar to what businessman Anthony Pellegrino has done with his shrimp business.

IT&E, which opened the first call center in the CNMI last year and has applied for a qualifying certificate for incentives, may also face healthy competition from other investors looking into the viability of the industry.

A call center is an office where a company’s inbound calls are received, our outbound calls are made.

However, participants raised concern whether the CNMI has the manpower required by a call center industry.

Aquaculture, although not new in the CNMI, posted sales of $66,725 in 2007 compared to only $6,150 in 2002 based on the U.S. agricultural census, and its viability is a potential pillar to the economy.

Educational tourism, according to Sen. Jude U. Hofschneider, has already taken off in the CNMI but should be further developed.

“It’s a viable industry, but we will need to revisit some policies that may affect the industry, especially in light of the federalization of our immigration. We need to look at the student visa policies in place. For example, young students from Asian countries who study English here, can their parents be also allowed to stay here, say, for two years?” he said.

But participants asked whether there are enough facilities in the CNMI to support more educational institutions that will attract foreign students.

Sergio Loya, project manager of consulting firm Management Analysis Inc., said economic development and establishing industries are not an exact science. Some things will work, others will not, he said. However, the CNMI can take calculated risks and specific actions that when managed properly, minimizes the risk and chances of failures.

He said the Legislature can act pro-actively, reactively, or take no action on economic development actions.

The lawmakers who participated in the break out session to identify ways and policies to develop each of the four identified alternative industries were Senate President Pete P. Reyes, Sen. Jude Hofschneider, Sen. Maria “Frica” Pangelinan, and Sen. Paterno Hocog, along with House Speaker Arnold I. Palacios, Rep. Ray Yumul, Rep. Ralph Torres, Rep. Joe Reyes, Rep. Stanley Torres, Rep. Joseph Deleon Guerrero, and Rep. Raymond Palacios.

The pre-economic restoration summit is hosted by the Department of Commerce, in collaboration with the Commonwealth Development Authority, the Northern Marianas College, and IT&E.

Results of the April 2 and 3 economic summit will be shared by the CNMI team at the U.S. Department of the Interior’s Office of Insular Affairs 2009 Conference on Business Opportunities in the Islands, to be held in Honolulu on April 6 to 8.