The Myth of CNMI Big Business

A prominent CNMI Leftist, “Mr. Offendo,” recently expressed great satisfaction at the defeat of the PK team in the last Republican gubernatorial primary. As he put it, this time the voters were not bought:
“Money did not talk–it took a walk.”

If we were to side with this obnoxious Leftist, we would have to believe that the CNMI government and its people were somehow controlled by “Big Business.” This so-called “Big Business” has, among other things, been nefariously characterized as “cheap labor-loving, garment-loving, minimum wage-hating, government-corrupting,” and so forth, ad infinitum. All of it is pure bunk, of course.

For if we objectively looked at the big picture, we would find that, in the final analysis, there is really no such thing as “Big Business” in the CNMI. Let me tell you why.

For one thing, the entire CNMI Gross Island Product itself amounts to little more than a billion dollars. In the larger scheme of global business, a billion dollars essentially amounts to nothing. In terms of our Gross island Product, Bill Gates could buy these islands 80 times over. Warren Buffet, who is worth about $20 billion or so, could buy the entire Northern Marianas and still have billions to spare.

For that matter, have we ever seen a CNMI-based big businessman–a tycoon, a mogul, a magnate–included in the annual Forbes 400 listing? The last time we had a CNMI businessman listed in the Forbes 400 (at least that I can recall) was back in 1992, when Larry Hillbloom was still alive. He was then pegged at $500 million. These days, with so many billionaires emerging almost overnight, Mr. Hillbloom would probably not even make the cut were he alive today.

Of course, the Forbes 400 only lists the richest American citizens. But even if we consider foreign investors, no CNMI-based businessman is to be found in Forbes’ annual listing of the richest people in the world. No one in the CNMI even comes close.

Incidentally, the only “Tan” on the Forbes rich list is Lucio Tan–a billionaire Chinese businessman based in the Philippines. To my knowledge, he has no major operations here. Relatively speaking, the CNMI is small potatoes.

Consider “small cap” stocks (small companies) in the United States. A small cap stock is any company with less than $1.5 billion in capitalization. Keep in mind: That’s just one small American company we are talking about here. Yet that small company’s market capitalization alone exceeds our entire Gross Island Product for a year.

Consider the US Government’s Small Business Administration. The SBA regards all businesses that generate less than $500,000 in revenues a year as small business. This would probably include as much as 90 percent of all CNMI businesses.

Look at the average company size in the CNMI and compare it to the average in the United States. We have an extremely small economy powered by struggling small businesses. Even our garment industry is small by comparison.

Strictly a personal view. Charles Reyes Jr. is a regular columnist of Saipan Tribune. Mr. Reyes may be reached at charlesraves@hotmail.com