Latest numbers show depth of slump

Renewal of business licenses suffered its worst decline in years, plunging 47 percent to 1,754 in 1998 compared to the previous year, according to statistics from the Department of Commerce that offered another gloomy economic condition in CNMI.

Government figures show that new licenses issued during that year slipped 45 to 877 from 922, or a slight decrease of 5 percent, with the biggest drop posted in March at 70, or 53 percent, compared to the same period in 1997.

Total number of licenses released by the commerce department at the end of 1998 tumbled 39 percent to 2,854 from 4,653.

Officials attribute the huge decline in license renewals to closures of business establishments mostly dependent on the tourism industry, once the lifeblood of the island economy.

A substantial decline in the total number of business licenses issued by DOC was noted in July when figures fell 62 percent to 65 from 169. The lowest number of renewals was recorded also during that month at 27, or a decrease or 75 percent.

The Asian-wide currency crisis that wreaked havoc on Japan and South Korea, two economic giants in the region that used to provide hordes of tourists to the Northern Marianas, has forced high-spending Japanese and Korean visitors to put off travel plans to the islands.

Since the onslaught of the Asian financial strife in late 1997, CNMI has seen hundreds of restaurants souvenir shops and convenience stores operated by Koreans and Japanese closed shop due to poor profits.

Independent economists predict the economic recession in the Commonwealth to last until year 2001, and local officials are not optimistic that faltering numbers in business licensing would ease in the immediate future.

As businessmen continue to leave the Commonwealth because of sluggish activities, island leaders are mapping out plans to diversify the tourism-based economy.

Last week an economic conference was held on Saipan to help local leaders identify possible alternatives to the tourism industry, which used to be a key source of revenues for the government.

Gov. Pedro P. Tenorio has created a task force composed of government and private sector representatives to help his administration craft a plan to revitalize the slumping economy.