Ruining opportunities for lasting investments

I came across an article in the US Journal of Commerce saying that for the last “eight consecutive years, Hawaii has reported virtually no economic growth, the result of the high cost of doing business and, more recently, the drop-off of Asian tourists due to the financial crisis”.

It is indeed very troublesome that such virtual zero-sum economic growth is even more pronounced at this island paradise (NMI) as a direct result of our propensity to impose strangling laws and regulations that work contrary to our intention to spur lasting economic expansion and investments.

Meanwhile, we remain optimistic that something would turn for the better when the worse or the second wave of the Asian Crisis has yet to land on our shores. There’s a similarity though between the NMI and the Aloha State: In Hawaii, 5,000 businesses would have shut down with the close of the year. Here, some 1,080 plus business have closed shops while others wait in the wings to either brave the situation or join the Luggage Squad as appropriately coined by Economist Ed Stephens, Jr.

If we haven’t learned already, policy determines the current and future success of the local economy. While our intention to weed out mom and pop stores may be well intended, its protectionist nature has spread like wild fire among local businesses and investors. Herein is drawn the line between those who understand the lasting benefits of good policies against those who normally brave political solutions.

A businessman knows what his $100,000 would reap if allowed to invest in business expansion or the establishment of new businesses against the requirement of local law that it be deposited in the local banks. We want insurance when in fact the very crux of the law is to leave $100,000 idle in the bank. To add salt to injury, we wanted $150,000 worth of business investment from the outset.

The most damning aspect of these protectionist policies is the obvious protection given local businessmen at the expense of the economy now fueled by well meaning investors. Interesting that when we review violations of laws, it also includes local businesses who have abandoned their employees because their ventures were under-capitalized from the outset. Thus, it would be most fitting too that they be required to post the same statutory requirements — $100,000 deposit and that their investments equal $150,000. Is it a fair statutory requirement for others while excepting locals? It’s a strangling law that has discouraged business expansion and future investments!

The strangling laws versus plans to approve the so-called “free trade zone” is a perfect illustration of the right hand not knowing what the left hand is doing. Yet, we’re convinced that we would see economic growth by approving protectionist laws. Until the NMI comes to terms with its blurred vision about enhancing business expansion and investments, like Hawaii, we too would be the direct recipients of policies fast forward the closure of more businesses while prospective investors head elsewhere.

Finally, I often quiz myself why would we be looking for our lost wallet underneath a fully lit streetlight when in fact we lost it around the couch in our living room?

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Laughter’s Corner: Last Christmas Eve, I gave my quiet gratitude to my dentist for allowing me to keep my four lower front teeth for the Yuletide Season. I mean, I’m not about to lose out on all the lavish local dishes that require pulling in order to cut, i.e., barbecued local beef jerky. I can’t see myself humming “All I want for Christmas are my four front teeth”. Anyway, hope you had a good one, too.