IT industry in CNMI hinges on local immigration control

Northern Marianas has a houseful of advantages to lure software production facilities in Asia into relocating on the island but everything still depends on the Commonwealth’s ability to maintain local control of immigration, according to a study funded by the Office of Insular Affairs.

Software production is a labor-intensive industry which may require the importation of highly skilled technicians. The local labor force is not yet sufficiently trained in software production technology.

Because of this, the CNMI government should be able to provide the proposed software production sector the ability to hire skilled and relatively inexpensive labor from Asia until local skills can be developed.

In fact, the U.S. General Accounting Office said the local labor pool, including those already employed and U.S. citizens not born in the CNMI and non-U.S. citizens from the Freely Associated States who have the right of residency in the islands, is not sufficient to support the scope and size of the economy that exists in the Northern Marianas.

Government studies have noted that CNMI’s proximity to Asia and the island’s low corporate taxes are attractive features that may boost the Commonwealth’s potential to develop and produce computer software for sale in Asian markets.

However, House Speaker Benigno R. Fitial said the CNMI’s potential to develop an IT industry is greater when it is focused at encouraging Asian IT firms to do business in the island because of the Commonwealth’s duty-free access to the United States, the biggest market for both computer software and hardware.

Mr. Fitial said Asian IT companies, which do not have the same trade privileges as the CNMI, will find the island’s duty-free access to the mainland U.S. an incentive to invest in software production here.

He also called for a thorough study of the proposed IT industry to determine whether the island has infrastructure to support technology-based companies.

At the same time, experts said the success of developing a technology-based industry will be contingent on the Commonwealth’s success in setting up support systems as telecommunications, as well as on the expansion of housing and recreational activities.

According to a report submitted to the Office of the Governor, investments based in telecommunications have a significant opportunity to become a primary industry in the Northern Marianas.

But the CNMI government would have to take a thorough review before efforts to promote a data processing industry are put forward since this sector requires a well-prepared local labor force.

At present, CNMI falls short in terms of the availability of local workforce with the required technical skills and expertise.

Aside from its being a potential alternate industry for the Northern Marianas, analysts said telecommunications would also have minimal impact on the islands’ fragile environment and eco-system, thus, protecting the local tourism sector.

However, economic researchers said telecommunications industry would depend heavily upon favorable tariff rates. “The competitive structure under which the telecom industry is organized would have to be carefully considered in any decision to pursue this type of development.”