Three reasons for anemic economy

In a recent campaign speech, House Speaker Ben Fitial outlined the causes of our anemic economy. There are three reasons for our current economic slump, said Mr. Fitial. The first reason is the continuing Asian economic flu, which has ravaged our once vibrant tourism industry.

Prior to the Asian financial crisis of 1997, the CNMI was well on its way to hosting a million tourists annually. When the Asian financial crisis of 1997 hit, our monthly tourist arrivals declined sharply: by twenty percent or more over the previous year. We went from hosting nearly 800,000 tourists a year to serving only around 400,000 (or less). Hotel occupancy rates plummeted.

And while most of Asia eventually rebounded, Japan–our biggest tourist market–still has yet to fully recover. The Yen is only weakening against the US dollar, making the CNMI a more costly tourist destination. Japanese consumer confidence is shot. Japan’s government debts keep growing–and their private banks keep failing to successfully manage billions of dollars in bad loans. Economic growth, as measured by Gross Domestic Product, is weak, barely registering above one or two percent at best.

According to the Speaker, the second reason we are in such sorry financial shape is the ongoing Federal takeover threat, which casts tremendous uncertainty upon the CNMI as an investment destination. To be sure, Federal takeover threats create a deplorable image of political instability. They frighten prospective investors. The ongoing threat of a Federal takeover seriously undermines our investment climate.

Although we have, so far at least, been successful in averting a Federal takeover, this is not to say that there is no present threat and that there never will be other threats. The potential for a takeover threat is always present and we must be ever vigilant. Like America’s founding fathers, Speaker Fitial understands eternal vigilance as the price of liberty.

Finally, and perhaps most importantly, the CNMI economy is in such sorry economic shape because we have a serious local leadership crisis. Many of our local politicians are decidedly anti-business. They consistently support policies that are clearly anti-business. As the Speaker put it, “The labor moratorium is anti-business and the three-year limit is also anti-business.” Many of our “leaders”–particularly those in the Senate–steadfastly refuse to repeal these anti-business policies, which have discouraged investors and kept our economy down.

As to the first reason, we cannot do much about Japan’s economy. We cannot affect Asia’s economies. But we can continue to stave off Federal takeover attempts. And we can reverse our local leadership crisis by electing new leadership. Speaker Fitial understands these realities, and perhaps that is why he is running for governor.

Strictly a personal view. Charles Reyes Jr. is a regular columnist of Saipan Tribune. Mr. Reyes may be reached at charlesraves@hotmail.com