Full recovery not far for islands

By ALDWIN R. FAJARDO
Special to the Saipan Tribune

LOS ANGELES, California—American insular areas, particularly Guam and the Northern Marianas, are slowly inching toward full financial recovery, as key economic players—the United States, China and Japan—show signs that point to a healthier global economy in the next couple of years.

Speaking before more than 900 government and business leaders from seven American insular areas and various parts of the continental United States, Department of the Interior regional economist Wali Osman explained that Japan and China’s recent economic gains are strengthening East Asia—the Marianas’ major source of tourism revenues.

Osman, touted as the Alan Greenspan of the Pacific for his extensive work on Pacific economies, was among the resource speakers in the two-day, US-DOI organized Business Opportunities Conference held at the Marriott Hotel in downtown Los Angeles.

He also noted that economic and financial signs point to a healthy American economy in the next 2-3 years, saying that stability in the U.S. stock market suggests return of confidence in the future of businesses in the United States.

Tourism on the islands—which was badly hit by a multitude of outside factors to include the Asian financial crisis in the mid-90s, the Sept. 11, 2001 terror attacks, the war in Iraq and a host of natural calamities—is also expected to take a major rebound in the coming years, thanks primarily to growth in China and Japan economies.

Osman took note of the double-digit growth in China’s economy and its link with the Commonwealth and Guam’s efforts to tap into the huge number of Chinese travelers who take overseas trips for rest and relaxation annually.

The Northern Marianas government has been persistently focusing its efforts to luring more Chinese visitors into the islands, recognizing the significant potential of the market in stocking up the Commonwealth’s bleeding coffers, which started getting badly drained following the currency crisis that hit Asia in 1997.

Besides the anticipated entry of China as the next major source of tourists for the CNMI, the Commonwealth’s foremost tourism market, Japan, has also started showing signs of economic recovery. It will give Japanese travelers, according to Osman, stronger buying power that could translate to more money flowing into the Northern Marianas economy.

“Japan has started recovering [from economic stagnation]. Growth in the next 12 months may be 4-5 percent, strengthening all of East Asia,” said the DOI regional economist, who has authored extensive economic reports for American insular areas for the Bank of Hawaii and the East-West Center through the years.

Pointing out that the economic and financial forces of the islands depend largely on outside dynamics, Osman advised government and private sector leaders to refocus their efforts toward the trends in China, Japan, and U.S. economies, which are likely to influence the way businesses will be made in the next years.

“U.S., Japan and China economies are regaining their vitality and the signs are pointing to growth and prosperity in the very near future,” he said, adding that economic forecasts in the islands’ have improved primarily because of Japan’s recovery from its financial slump.

Osman said the key to the complete recovery of the islands from years of economic slump and stagnation is to make use not only of their natural beauties—pristine beaches, friendly people, and other beautiful sceneries—but also of their close political and economic affiliation with the United States.

Also, during opening ceremonies of the Business Opportunities Conference here, DOI Deputy Assistant Secretary David Cohen highlighted the strong points of the islands that would help them realize their dreams of fostering economic and financial growth through the entry of new investors in various fields, including tourism, manufacturing, telecommunications, agriculture, fisheries, and education, among others.

Cohen listed the following as CNMI’s strongest selling points: Asian-based tourism, major garment manufacturing industry, no U.S. visa-required entry, international workforce, reliable transportation services, lower minimum wage, and Jones Act exemption.