NMI sees more new investments, business expansion

Hopes are high efforts taken by the administration of Gov. Pedro P. Tenorio and the CNMI Legislature to build stronger economic backbone for the Northern Marianas will reap good fruits sooner than previously expected.

In an interview with reporters yesterday, Mr. Tenorio dropped strong hints legislation granting tax breaks to new investments as well as present businesses with expansion plans will promptly pass his office for immediate implementation.

The governor said there is a need to put up measures that will be desirable to new investors and existing businesses, which would at least encourage them to pour in fresh capital into the CNMI economy.

“I’m sure that the new measure will meet our requirements for new investments. Our staff worked closely with members of the Legislature and representatives of the various business sectors,” he told reporters.

He pointed out his office will accordingly review the Investment Incentive Act when transmitted by the Legislature to the executive branch, although he has hinted that he does not foresee any problem which might derail the signing of the bill into law.

“When they transmit the bill, we will review it although I don’t foresee any problem unless they made any further changes. We are aware that this measure was done in close consultation with the private sector and the administration,” he added.

According to Mr. Tenorio, representatives from various business organizations in the CNMI, the Department of Commerce and the Governor’s Economic Revitalization Task Force worked closely with the Legislature to come up with the measure.

“We always like to see close cooperation between the legislature and the administration, as well as with the private sector in our efforts to improve the economy. I am confident this will be a major boost in our present economic situation,” the governor said.

While total number of business licenses issued by the CNMI government increased by as much as 100 percent in the first six months of the year to 3,882 from the year ago’s average of 1,794 permits, analysts said this does not automatically translate to growth in economic activities.

Commerce officials explained that some establishments in the Northern Marianas hold more than one business license since existing laws require them to secure a permit each for the sale of liquor, cigarette and other consumer products.

In fact, rally of the Northern Marianas economy continues to pale in comparison during the boom years of 1996 and 1997, the same time when the government issued only an average of 1,865 and 2,009 business permit in a six-month period.

Although higher number of business renewals does not translate to economic growth, analysts said the situation indicates stronger business confidence primarily spurred by reports on the slow but sure recovery of the islands’ travel industry.

Analysts said the growth only reveals that the magnitude of ailing businesses have started to drop, indicating a significant reduction in the average number of establishments that are closing down because of economic upheavals.

Government officials said it will take the CNMI longer years to recover from deep economic slump or at least come close to the 1997 level since more than half of all the islands’ existing establishments in 1996 have stopped operations since the Asian financial upheaval fanned towards the Northern Marianas in early 1998.