Capital flight warned •Businessman: $1B suit driving investors away from the CNMI

Businessman of the year Joe Ayuyu has warned that the $1 billion class suit filed against garment manufacturers and buyers, will force the immediate departure of the industry and leave the island in deeper economic trouble.

Since the Asian financial crisis began 16 months ago, the Northern Marianas tourism economy has been battered, leaving the CNMI to depend heavily on the revenue from the garment industry. Garment manufacturers here ship some $1 billion worth of apparel products to the United States every year.

Ayuyu lamented that the expected relocation of many garment firms to other countries would happen at this time when the island’s half-a-billion-dollar tourism economy cannot even produce the needed revenue due to the continues decline of tourist arrivals. Some garment firms have already established factories in Mexico, Philippines, Cambodia and other Latin American countries.

“If the federal government succeeds in removing the garment firms, we would all be in a helpless situation. It would be a sad day for all of us when the last garment manufacturer leaves the CNMI because it will put the island in deeper financial trouble,” he said. Ayuyu was voted by the Chamber members as most outstanding businessman of 1998 during ceremonies last Saturday.

According to Ayuyu, the departure of the garment industry, should be a concern of the members of the community because this will lead to the closure of other related businesses and result in the unemployment of many local people.

When the garment manufacturers leave, the Northern Marianas cannot expect Washington to provide financial assistance that would equal the revenue contributed by the industry to the CNMI government’s coffers.

The CNMI panel will meet with U.S. representative Bill Cohen tomorrow to resume the stalled 902 talks focusing on the controversial federal takeover of labor and immigration.

Ayuyu, who is a member of the CNMI 902 team, said it is unfortunate that the federal government has continuously refused to allow the Northern Marianas’ right to self-government.

With very limited resources, the Northern Marianas cannot fight back efforts of the federal government to cripple the independence of the CNMI, he added. The former chamber president said the image of the CNMI abroad has been severely damaged as a result of the publicity brought about by the filing of the lawsuit.

“It has destroyed our image as an investment destination and it will be with us for a long time,” he said.