Chamber bids time to diversify economy

Washington must provide a bailout package to the CNMI to make up for the shortfall of revenue which it will lose when the federal laws on labor and immigration are implemented on the island, according to the Saipan Chamber of Commerce.

In a position paper submitted to last week’s 902 negotiations, the Chamber warned that a federal takeover would devastate businesses on the island which are already reeling from the effects of Asia’s currency crisis.

The Chamber asked Edward B. Cohen, U.S. President Clinton’s representative in the 902 talks if the federal government would be willing to help nurture the island’s economy back to health since it will take years before businesses in the CNMI can recover due to Asia’s economic problems.

At the same time, is the U.S. government also willing to shoulder the enormous cost and expenses related to an administrative transition to federal standards?” the Chamber added.

The planned federal takeover would affect the future economic development plans of the CNMI as the governor’s Economic Recovery and Revitalization Task Force has been finalizing the establishment of a Free Trade Zone to lure investors specifically American companies.

This is part of the CNMI’s move to diversify its economy which has become so dependent on the garment industry. With the removal of preferential treatment on textiles entering the United States Customs area under the World Trade Organization, garment manufacturers are expected to leave the CNMI in the year 2005.

“As a result, we are looking for additional industries that will diversify our economy. We need time to do this. We also need stable policies that investors can feel secure about. The constant threat of a federal takeover is stifling our opportunities for further development,” the Chamber said.

The Chamber assured the U.S. government that the business community in the CNMI has been planning for the future. Telephone rates to the U.S. and Asia have been reduced by two-thirds when the CNMI became part of the North American Numbering Plan, making the Northern Marianas competitive.

Instead of a federalization of labor and immigration laws, the Chamber has suggested the following:

• Allow the governor’s minimum wage review board an opportunity to make recommendations to the CNMI government.

• Give the CNMI government and private sector the opportunity to implement programs which will focus on training and development of the local workforce.

• Create a joint law enforcement task force comprising of members from the U.S. and local officers in areas such as wage and hour compliance, OSHA, Customs Service Division, Justice Department for criminal investigations and guest worker hiring clearance.