Commerce sees growth in finance, digital sectors

Conceding to the turtle-paced recovery of the Northern Marianas tourism industry, the Department of Commerce has identified two major business activities that show bright potentials at facilitating the Commonwealth’s redemption from deep economic contraction.

Economic advisors from the commerce department noted promising signs of continued growth in the local finance sector and the auspicious prospects for new ventures in the digital technology.

Acting Commerce Secretary David S. Palacios said plans to diversify the CNMI economy offer bright prospects for the Northern Marianas since a quick recovery of the visitor industry, once the Commonwealth’s largest-revenue generating sector, is not foreseeable.

“The Department of Commerce believes there are other economic areas that offer bright prospects. They include banking, financial services, electronic commerce, software development, among others,” Mr. Palacios said.

He explained the dominance of United States-based banking laws on the island provides better prospects for the development of a finance-based activity in the Northern Marianas, the CNMI being a U.S. jurisdiction which is only at least three hours plane ride away from the Asia.

Business analysts said allowing dollar trades of securities to be conducted in a US-regulated market during Asian daylight hours has good potentials of stimulating the island’s economy.

Securities bourse

Aside from the advantages it will have in terms of diversifying the economy, developing a securities exchange market would also give the CNMI the capability to position itself as a financial center in the region.

Finance managers have noted the sector-based multiplier effect that may be potentially available once a securities bourse is established in the Northern Marianas, including the creation and administration of mutual funds specializing in Asian investments.

The stability of the U.S. dollar and the volatility of major currencies in neighboring Asian countries also make it auspicious for the CNMI to create dollar-denominated trusts that cater to Asian investors.

Predictions are rife that the Northern Marianas could see increased activities in mutual fund brokerage and in the stock market due to the presence of U.S.-based financial institutions in the islands which may spur the sector’s expansion.

On the information technology sector, actions are now being undertaken by the House of Representatives to keep the Northern Marianas abreast with the latest electronic innovation in enhancing commerce.

Digital trade

House Speaker Benigno R. Fitial previously called for increased CNMI participation in the digital trade, stressing the CNMI should be in the same playing field as most of the world’s economies which are currently driven by technological improvement.

There is a need for the Commonwealth to increase its participation in electronic trade and digital technology primarily because the respective economy of all the 50 American states is increasingly driven by computer.

Northern Marianas consumers currently account for big volume of imported items purchased from the mainland U.S. through transactions in the Internet despite the absence of local laws that protect them from e-commerce shams.

Still, the commerce department is optimistic the Commonwealth’s tourism sector will witness a turnaround in visitor-related business activities sooner, following the rebound of major Asian economies.

“There is hope with the rebound in Asian economies that things will eventually stabilize. Despite the recent fluctuations, this industry offers the most potential for future economic growth and should be nurtured,” Mr. Palacios said.

He added the same holds true for the apparel manufacturing industry, whose future remains uncertain pending the lifting of U.S. trade quotas in the next six to seven years.