Experts see daunting task ahead for CNMI

In a move to save the island’s declining economy, a group of economists, financial analysts and planners recently gathered here to help officials plan for the CNMI’s economic future.

While experts agree that the Northern Marianas will be able to rise from its present difficulties, they also believe that efforts to improve the economy won’t be an easy task due to forces beyond the government’s control.

“We want to look at industries that offer business and employment opportunities capable of advancing the standard of living in the CNMI. We are looking at industries that require highly skilled and paid workers,” said Jack Peters, director, Business Development Center.

In examining the CNMI’s investment climate, various elements such as business taxes, incentives, legal stability, permit and regulatory requirements have been examined.

Furthermore, the public and private attitudes toward development, historical and cultural factors as well as the influence of the federal government on the economic future of the Northern Marianas were take into consideration.

Since the Northern Marianas has experienced sustained economic growth for many years, financial analyst Richard Conway, principal of Conway & Associates, a Seattle-based consulting firm, said the CNMI government suddenly finds itself in a difficult situation where it must make a choice between cutting down on jobs or reducing manhours.

“Unfortunately, there are no easy answers to the problems besetting the CNMI. The government would just have to be efficient in managing its limited finances,” he said.

As the CNMI government now depends on the garment industry for its main sources of revenue, Conway said its departure would mean a loss of about 1,200 government jobs between now and the year 2005 unless officials take drastic measures to cut down on working hours.

To make matters worst, Conway said the CNMI appears headed for a recession between now and 2005.

Peters acknowledged that identifying opportunities and constraints concerning economic development has become difficult in an increasingly competitive world as choices will be affected by market forces beyond the CNMI’s control.

Under these conditions, the experts would design productive and feasible processes feasible in the CNMI.

“Do we have the land, infrastructure, skilled workers, the capital, the transportation in sufficient quantities and qualities to exploit these development opportunities. If we do not have what is needed, we have to find out how we can get it. We will have to determine which industries could feasibly operate and flourish here with what we already have to offer,” said Peters.

While the geographic location of the CNMI provides many opportunities for its economic growth and diversity, it must also prepare for any crisis that may occur in the region, said Dr. Paul Callaghan, a finance and economics professor from the University of Guam.

“When Asia coughs, the CNMI gets pneumonia. When the medical prescription from Washington finally arrives, its use may kill the patient, if not administered in moderate doses,” he added.

Callaghan warned that the CNMI’s proximity to Asia and its distance from the United States mainland coupled with its smallness, will always make its economy susceptible to unforseen external effects whether economic, political or social.

Although Conway was able to develop a model that helped in understanding, explaining and predicting the Northern Marianas economy, Callaghan said no model in the world can still predict the timing and magnitude of “unexpected exogenous forces.”