Investments still come in trickles
With foreign investors still maintaining a ‘wait-and-see’ attitude, the Department of Commerce received only two new long-term business applicants out of the 87 businesses approved from April-June 1999.
Although the Coastal Resources Management has approved the construction of various hotels and resorts in the CNMI, there are still no signs that any of the multi-million project will begin this year.
“We cannot blame them, we are still feeling the effects of the regional crisis,” said Lee Cabrera, director of the commerce department’s Economic Development Division.
Heavily dependent on garment and tourism, the CNMI government has moved to diversify the island’s economy with the planned establishment of a Free Trade Zone. The House of Representatives has yet to pass the law creating the FTZ, which was launched during a business conference last March.
“If this becomes a law, marketing it will be the next difficult task. You may have the best free trade zone law but promotion is still a big factor,” said Cabrera.
While the department supports the Qualifying Certificate Program which offers incentives to investments not covered in the Free Trade Zone, Cabrera said the proposed measure still needs fine tuning. The proposal is now under review by the House Ways and Means Committee.
Patterned after Guam’s policy, the Qualifying Certificate bill would give preference to investors with a 51 percent stake from an owner who is both CNMI resident and U.S. citizen.
While the CNMI is showing signs that the worst of the economic decline is probably over, a regional economist from the Bank of Hawaii said the biggest question is when and how rapidly can the island get out of the trough.
Wali M. Osman, vice president and regional economist, said the Northern Marianas may find it hard to recover from the present economic slump with the changes in the region’s economy.
Recovery of the tourism market may be difficult due to the huge loss of tourists from Korea and the decrease in traffic from Japan, he said. At the same time, he added that the garment industry, which sustained the island’s economy during the crisis, has already reached its maximum capacity.
