KNIGHT SHRUGS OFF OSMAN REPORT Chamber says federalization is political issue

Newly-elected Saipan Chamber of Commerce president Lynn Knight has dismissed the analysis of Dr. Wali Osman, regional economist of the Bank of Hawaii, that business and government should prepare for the federalization of local labor and immigration, saying it is largely a political issue.

In his presentation of the Bank of Hawaii’s Economic Report on the CNMI, Osman suggested that the most effective way to deal with the issue is to reach an agreement with Washington as to when such laws would be implemented. With the threat of a federal takeover hovering above their heads, Osman said, the future of investors in the CNMI remains uncertain, thus, business and government should now prepare for an orderly transition to avoid economic disruption.

While she understands that Osman’s analysis stems largely from his concern to improve the investment climate in the Northern Marianas, Knight said the fact still remains that the federal takeover is an issue between the Democrats and the Republicans.

“I do believe that there are people in Washington who recognize our economic situation and are concern that if we have massive changes in our system, it would cause severe damage on the island,” she said.

“The best thing for us to do is to continue to focus on ways how we can improve ourselves and do our best not to break any labor laws, to be aware of the OSHA regulations and all of the things we’ve been criticized about,” said Knight.

The federal takeover, Knight said, will be determined by a number of factors, one of which is whether or not the CNMI can continue to handle its own problems related to labor and immigration.

Negotiating with Washington now would just hasten the federalization of labor and immigration, she said. The CNMI was given certain privileges under the Covenant, and any change in the present local and immigration system should be decided by both chambers in the U.S. Congress.

The island’s appeal as a base of operations for foreign investors is the combination of below-minimum U.S. wage rates and duty-free access to US markets.

Businesses have always opposed moves to federalize local labor and immigration functions claiming that this would result in the collapse of the CNMI economy because of the removal of necessary access to labor supply and an expected 100 percent hike in the local minimum wage amid the downturn in the island’s economy.

Asked about the future of the CNMI amid the uncertainty, Knight said: “The answer lies within us. If we cannot improve ourselves, then we have no chance at all,” said Knight.