Cash woes aid slide •Governor heaps blame on predecessor for the crisis

Gov. Pedro P. Tenorio has said the rapid decline of the Northern Marianas economy that has pulled down revenue collections would have been less devastating to the commonwealth had he not inherited a cash-strapped government.

The governor explained the collapse of the Asian economy was sudden to allow his administration to lay out plans to cushion the rippling effects of the region-wide crisis.

Such situation, he said, has further complicated a string of financial problems he confronted when he assumed office almost a year ago, the latest of which is the retirement of the $53 million deficit incurred by the past administration.

The deficit was predicted to balloon to over $100 million in FY 1998 after the administration paid $27 million in outstanding obligation left by former governor Froilan C. Tenorio and the $28 million it raised to cover rebates for the previous tax year.

“It’s unfortunate that there was no time to prepare,” Tenorio said in an interview Thursday, “The money has already been spent and immediately the Asian crisis hit us within months.”

The impact of the year-long economic slump, the worst to hit the fragile island economy since the 1960s when minimum wage was reduced following the change in administration during the Trust Territory, would not have been severe if there was money in the local coffers, Tenorio said. “We would not be facing much problems as we are facing right now.”

The onset of Asia’s currency crisis early this year has led to business closures, layoffs and cutback in working hours in the private sector largely dependent on the region for tourists and fresh capital.

Double digit decline in tourist arrivals and continuos drop in cash collections have combined to put CNMI in its worst financial shape that is threatening to imperil delivery of basic services to the community.

To deal with the worsening financial condition, Tenorio has implemented an austerity program, banning off-island trips by officials, reduction in overtime and elimination of unnecessary expenditures to keep expenses low.

Plans are also underway to further tighten fiscal discipline in the government in order to cope with the anticipated 13.4 percent decline in revenue collections for Fiscal 1999.

A task force has been established to draw up ways to diversify the economy, including the creation of the first free trade zone in the Northern Marianas, and lessen dependence on tourism, the backbone of the island economy.