Could be worse….

Things might seem lousy here, but they could be worse.

Consider Uncle Sam’s tropical cousin, the U.S. Virgin Islands. Their economic woes hit the Washington Post last week: “Virgin Islands Cannot Pay Workers,” says an AP story scribed by Jeannine Relly.

The USVI has a population of a mere 118,000 or so–roughly twice the size of the CNMI–yet has managed to rack up a debt of a cool $1 billion.

The islands depend on tourism for their bread and butter, but a couple of hurricanes put the hurts on the tourism industry. Meanwhile, the government had a massive number of employees and spent a lot of money, and–presto–it’s broke.

Last week, the USVI government announced to its employees that it simply can’t pay them.

I don’t know why the U.S. papers picked up on the story. One angle is the comical level of gross economic mismanagement. Another, however, as the story plays out, would be to see if the whole tangled mess erupts in an orgy of unrest and violence. When folks used to eternal freebies get stiffed, they’re not always very polite about expressing their displeasure.

The bottom line will be, of course, that the hurricanes are responsible for all the economic woes in the USVI. After all, nobody can predict hurricanes, so how can anyone be blamed for what happens in the aftermath of a random event?

A lot of messed up economies lack what a friend of mine call the “anticipation thing.” On the road to economic modernization, they neglect to take a spare tire. After all, you can’t predict a flat tire any more than you can a hurricane, so why bother to guard against an event that you really can’t get blamed for causing?
Twisted logic, to be sure, but a rationale that is as common as poverty itself.

Is it possible that the garment industry rescued the CNMI from this fate? It’s more than possible, its a fact. Consider this: the CNMI government spending per person is about 14 percent higher than the USVI’s We, then, spend money with more gusto than they do. (Er, I should say with more gusto than they “did.” I guess they’re so broke they can’t spend any more.)

They’ve got the hurricane excuse, we’ve got the Asia crisis; both of us swapped the economic spare tire for a case of Budweiser. If the CNMI didn’t have the garment industry, we would be economic road kill, and would have beat the USVI to the “those guys are broke, ha ha ha” headlines in the U.S. press.

Well, that’s economics for you. Economies are constantly sorting themselves out; most of the big ones are pretty stable, but the smaller ones are often times leaping ahead or falling back. Though it’s kind of funny, the USVI case–economically speaking– isn’t novel, interesting, or special. It’s just another typical example of what happens when the anticipation thing is lacking.