When first is last

“Putting locals first”–that’s what the local legislature is supposed to be about: looking out for the local, indigenous interest, protecting the Chamorros and Carolinians from the ravages–from the “exploitation”–of “unscrupulous foreign businessmen.”

At least, that is the political rhetoric we hear all of the time. It is used to justify protectionist legislation such as the Foreign Investment Act (with its irrational $100,000 security deposit). More recently, it was invoked to justify the local preference policy in awarding government contracts.

What the indigenous leadership doesn’t realize, however, is that, by “putting locals first,” they are really putting us last. The indigenous people do not benefit from the recent local preference legislation concerning government contracts.

Under the terms of the new law, for example, local bidders are allowed to charge as much as 15 percent more than the foreign bidder and still get the contract! This means that the local businessman can get away with overcharging us by 15 percent just because of the color of his skin, or where he was born. That point alone, according to our leaders, fully justifies the local bidder in ripping us off.

Naturally, they will not say it in those terms, but that is exactly the net effect. The local bidder not only gets special treatment for no logical reason (such as earned merit), he makes all of us pay more for government projects, (such as infrastructure development).

Think about it. Suppose a local bidder says he can complete a government project for $1,150,000. If a foreign bidder says he can do it for a flat million, under the terms of the new law, the local bidder will still get the contract–even though he is charging us $150,000 more: Hey, that’s OK; he’s local!

Think of what the government could do with that extra $150,000. Think of how many kids it could support in college.

But, no, we must have locals; we must benefit the local people.

But tell me this: If Juan Q. Malania gets a lucrative government contract, how do I, as a local person, personally benefit from it? Assume that he is not my father or other family member. Assume that I have no plans to marry his daughter. Assume that I don’t work for him. How do I then benefit?

Clearly, Juan Malania benefits, not you or me, or other local people apart from Mr. Malania’s friends and close family members.

Does the local bidder provide jobs, tax revenues, community contributions, etc.?

Yes, maybe so–but so does the foreign businessman.

But will the outside bidder repatriate most of his profits back to his home country?

No–not if we maintain a free, open and welcoming regulatory climate of free enterprise.

Remember, if we don’t, foreign money will not freely flow into our shores . . . and if that happens, everybody, including the local businessman, suffers.