NMI strengthens economic recovery efforts

The CNMI government is laying the ground for fast-paced economic recovery programs, apparently growing tired of the sluggish rally of the local economy as neighboring Micronesian islands start witnessing a turnaround of business activities in recent months.

This, as the administration of Gov. Pedro P. Tenorio opened a position for an economic development advisor under the Department of Commerce to complement government efforts in nourishing the islands’ badly-hit economy.

If this is still not a bad news, business experts believe the likelihood of the Northern Marianas witnessing a significant growth in business activities this year remains a far-fetched reality, although a flat improvement may take place.

Business analysts said economic growth in the CNMI will partially depend on the number of available regular airline seats between Saipan and South Korea. The local economy is expected to grow by no more than one to two percent this year.

A report prepared by the Bank of Hawaii noted that the CNMI economy is projected to pick up by between 3-4 percent next year when more Japanese and Korean travelers begin taking overseas trips again.

The document pointed out that the development will have to be spurred by a turnaround in tourist traffic which would cause growth in business receipts, employment, taxes and the rest of the economy.

The report ruled out further growth in the garment manufacturing industry explaining that the sector has reached its mandatory peak for active licenses and employment due to the cap in the number of apparel factories and nonresident workers it may employ.

Experts said sluggishness of the local economy will persist throughout, and may even fan beyond, the year 2000 with both foreign and local investors practicing frugality due to the volatility of the CNMI business climate.

This necessitates the hiring of a government economic development advisor who will be tasked to plan, coordinate and draft research which relates to overall economic development in the Northern Marianas.

The economic advisor will also review, analyze and evaluate economic development programs and recommend policies, method, procedures and changes for carrying out overall objectives.
Commerce Secretary Frankie Villanueva disclosed the economic advisor would be assigned to develop and assist in the implementation of projects aimed at stimulating economic growth in the Northern Marianas, amid the persisting downward trend in tour-related activities.

However, the anticipated success of the programs that will be carried out by the Strategic Economic Development Council is seen to allow the tourism industry to pump up government revenues by at least $200 million in five years.

A report prepared by the Office of the Governor disclosed that revenues generated from the tourism industry are projected to reach $200 million by 2005.

Following projections that visitor arrivals to the Northern Marianas will reach 810,000 in five years, the CNMI government is planning to develop 900 new tourist hotel rooms by 2004.

The growth in tourism is also expected to result from intensified efforts by the Marianas Visitors Authority which has started carrying out programs aimed at encouraging non-traditional visits like charter flights, the U.S. Military and luxury cruise ships.

The Garapan Revitalization Committee is nearing implementation of a plan to completely change the main tourism area on Saipan by creating pedestrian walkways through the major shopping district.

CNMI’s tourism sector has faced a two-year recession due to the turtle-paced growth of the Japan economy. Officials are hoping that deplanement figures will remain steadfast as a result of the various promotional programs carried out by MVA and industry players.