Cohen: Govt role in private sector need to be assessed

Insular governments like the CNMI need to assess their relationship with the private sector to ensure an improved business climate, according to Department of the Interior deputy assistant secretary for insular affairs David Cohen.

Cohen said it is very important for investors to find island economies “attractive” as business destinations.

To begin with, governments need to ask themselves if they have taken too large a role in the private sector and determine their proper relationship with the business community.

“We discussed what type of things the governments need to give the private sector comfort to come here and create opportunities… We’re trying to stimulate conversations how to make sure that businesses will feel comfortable,” Cohen said in an interview with reporters after a meeting with local officials Wednesday.

He said he recognized that “these decisions are for elected leaders to make.”

“It’s not for us to make, but it’s very important for us to do what we can to assist,” he said.

Cohen said that the latest annual business conference for the territories held in Los Angeles has been successful and that the DOI’s job now is to make sure that island territories are ready to welcome potential investors.

“We’re having similar discussions throughout the islands on how we can work together to improve the business climate because when businesses come here, we want to make sure that we have done everything that we can to create a good impression,” he said.

When asked, Gov. Juan N. Babauta said that the issue on government role should be taken in the “proper” context.

He said it is the government’s responsibility “to enhance and encourage the development of the private sector.”

“That’s where the goal is in terms of building the economy up in the CNMI,” he said.

One way to do that, he said, is privatizing government agencies and services such as utilities. “As you know, I have always supported the privatization of power in the CNMI. I believe that with privatization comes efficiency and more effective delivery of services. I truly believe that, if people are provided reliable power, they will pay what is charged them. These are the things we need to continue to talk about and begin to plan for the future in building up the private sector economy.”

Governor special assistant Galvin Guerrero said improving business climate includes promoting “team work with the private sector.”

“It’s so hard to put what the role of the government is. One role is to look out for the public good and make sure it’s not compromised,” he said.

A total laissez-faire approach toward the private sector, he said, would not be a good idea. What businesses prefer to find in a local economy, he said, are clear regulations and consistent implementation of rules.

“I don’t think the government is too much of an interventionist,” he said.

In his opinion, he said, the issue in the CNMI is “not so much about government intervention” but on “consistent enforcement of rules and applications of laws.”

Cohen said DOI would support power privatization if the CNMI government decides to go in that direction.

“Economic research shows that privatization can often result in services being delivered more cost-effectively and if the government wants to pursue privatization, we will be supportive and do what we can do to assist,” said Cohen.