Increase in business activity noted

After reaching rock bottom, the local economy is starting to rebound as manifested by the significant growth in the number of business licenses issued by the Department of Commerce during the last fiscal year.

Government statistics disclosed a whooping 43.27 percent increase in revenues generated from business licensing fees in FY-1999, from $721,000 to $1.033 million.

In 1998, the commerce department issued 877 new business licenses or a monthly average of 73 new investments. This is translated into 45 difference or a five percent drop compared with the previous year’s tally.

Only 1,977 of the 3,731 establishments in 1997 renewed their business license in 1998. The highest drop was recorded in December that year when 407 establishments did not renew permit to operate.

During the first semester of the last calendar year, the commerce department issued 2,452 business licenses. The second quarter report also registered growth at 701 from the previous year of the same period’s 498.

More than 1,700 establishments have closed shop since January 1998 due to the dramatic decline in local economy. Existing establishments plunged by 47 percent or a difference of 1,754 during that period.

New investments pale in comparison with the previous year’s figure posted from 922 to 877. Overall investments dropped by 39 percent to 2,854 in 1998, posting a deficit of at least 1,799 compared with the previous year’s tally.

In 1997, the Central Statistics Division of the commerce department recorded a total of 4,653 businesses in the CNMI. Of this, 922 were new investments while 3,731 establishments renewed their business licenses.

Although consumers pigged out on less expensive commodities in the market due to the thousands of closing out sales, they are faced with costly products since there will be lesser competition in the market, and lesser competition means higher prices.

This scenario may lead to monopoly especially when the number of establishments involved in a particular field of business is trimmed down further which may give death to the open market environment.

This could make bigger companies out of “already big ones” that can dictate prices on the market, leaving the consumers at the losing end since there will be no other place to go to compare prices with.

“It is not so good in the long run because as you have lesser businesses, prices are likely to go up,” a business analyst said, explaining that bigger companies are more likely to survive the competition which are also more presumably to dictate prices.