Big strategies and small islands

If you’ve followed the news in Guam, you might know that the U.S. Navy did an about face on an agreement to turn its ship repair facility over to the Guam government. The Navy cited the specter of increased military activity in the area as a reason to keep the facility safely in hand. Given the mess that GovGuam would have made out of it, you can understand the Navy’s actions.

Meanwhile, the Asian sphere is kicking up the arms race. China has ordered some Russian destroyers and has purchased some high-tech surface to surface missiles. India, also a nuclear power, has embarked on an ambitious naval expansion, one that includes aircraft carriers. And though Taiwan’s recent efforts to buy some Aegis class cruisers were stymied by politics, the affair serves to illustrate the tone of military tensions in the area.

It’s not surprising, then, that our little area of the world might receive renewed appreciation for its strategic location.

For Guam, the situation can only bring good economic news. The island has long been buoyed by military spending. The military still owns a good sized chunk of the island, and appears to be able to pump up its presence pretty quickly.

We’re talking hundreds of millions of dollars here. The latest year I’ve got such data for is 1995, and the military spent $810 million in Guam that year. The biggest slice of that pie was for personnel, money that flows into the economy and turns over a number of times via the “multiplier” effect.

To put $810 million in perspective, consider that it’s a solid third of all the CNMI’s business gross receipts for an entire year.

The next economic wrinkle for the Mariana Islands may well be military linked. The mainstay of tourism isn’t going to take off any time soon. Japan, the main market for Guam and the CNMI, is going to remain in the economic doldrums for the foreseeable future.
Smaller markets like Korea and Taiwan will grow, but they’re not big enough to match Japan’s importance yet.

Economic policies both in the Commonwealth and in Guam are not exactly enlightened, and nobody expects any “home grown” economic growth. The islands will continue to be steered by outside events.

As for the Commonwealth, we’re no strangers to military presence. The north part of Tinian remains Uncle Sam’s military turf. The Voice of America radio compound, though perhaps not military in the strict sense of the word, is certainly a strategic asset, and its placement in Tinian certainly demonstrates the strategic merit of our islands.

I suspect we’re just starting to hear about the military’s interest in this region as the new century dawns. Uncle Sam’s economic ties to Asia are too strong to permit his military presence to wane. There will be a lot of money spent, and maybe the CNMI will be on the receiving end of some of it. Maybe we can turn all those vacant hotels into luxury barracks.