The economic ruin of the CNMI: What can we do

Last of three parts

So far, the CNMI government hasn’t demonstrated to me a great ability to do anything. The Senate has tried to step up to the plate but this case is not the Senate’s primary job. The job is supposed to be initiated by the House (money bills) and by proposals from the governor. The governor has initiated some reform proposals that were submitted to the Legislature. But these proposals were rejected and I see what was once a great potential going ever more rapidly down the road to financial ruin.

Local economists, financiers and business people have tried in vain to present various ideas in the hopes of salvaging what is left and introducing innovative potential revenue sources. It seems that many in government have developed a severe case of deafness. Reform should have begun four years ago, but it didn’t and by now, whatever can be done may be too little too late for current industries. Once customers go, they don’t come back.

Just ask any of the two dozen or so prospective investors who have come here in the last five years looking for a new (and friendly) home, only to be shown the door if their offer didn’t include super-sized returns for the government or enough “bonuses” for those who promised to help them through the maze. It is time to stop and smell the stench.

The CNMI must change its attitude. You simply cannot lure business in by asking them what they will do for you. The CNMI must start asking what we can do for them. Senior members of the CNMI government are out to lunch in this respect and minority activists with little common sense rule the day.

The Northern Mariana Islands is currently NOT open for business. We need to tell the world we can be.

An Economic Summit: I think a fair start would be to initiate an economic “summit” primarily composed of economists, business people, financiers and accountants; maybe one lawyer for good measure but certainly NO politicians. Let them map out a strategy and then the Legislature must bite the bullet and change the road using the new map. It is heartening to see that the Governor has once again stepped forward and formed a new task force to look into the effects of the garment industry downturn, but disheartening to hear, once again, the same song and dance from his bureaucratic advisors that the downturn is really not that bad and they expect “only” a modest $4-5 million dollar “adjustment.”

Taxes: The current taxation system is antiquated and unwieldy. Wouldn’t it be better to simply scrap it in its entirety and start over? A new more broad-based system as in most other successful municipalities is not rocket science, just good business. Give each municipality some power over its own destiny. Reserve the things that affect everyone in the CNMI to the central government. Decentralize. Diversify. Broaden the tax base to include a new excise or sales tax on goods sold (except for food and medicine), a fair personal income tax, business “free” zones with no taxes, forget the BGR tax that is nothing more than a cheater’s haven anyway, perhaps a VAT for manufacturing, forget the “export” fee structure that drives away potential manufacturers, give municipalities the option to supplement their budget with other means. For Tinian, this could be casino gambling revenue; for others a property tax system. There are many fair remedies employed all over the United States. Search them out and use what best suits the need and the people. The Department of Finance is a mess—start over.

The government’s “permitting” process: The CNMI government’s permitting process must be more streamlined, reorganized and consolidated. The permitting process should be reasonable and the road clearly defined. A new system of ethics and conduct should be implemented with dire and extreme consequences for those who cheat.

Utilities should be privatized: CUC must separate power from water/sewer. All utilities (power, water, phone, cable, bus, taxi, etc.) should be placed under the regulatory control of a legislatively created “Public Utilities Commission” with the power to protect the public while assuring solvency of the utility. Rate structures should be developed that fairly distribute the cost of the utility among the various users such as residential, commercial, agriculture, manufacturing and government.

Bored with too many boards: We should forget the multitude of “boards” filled with beholden families and friends who enjoy ultimate power and grant or withhold favors based on custodial relationships rather than business sense. Wouldn’t a single oversight board with the purpose of making sure a potential business is not controlled by criminals or simply unworthy do the job? Businesses will, for the most part, regulate themselves based upon customer demand. The government’s primary role should be as a watchdog, making certain that every business, big and small, operates in a fair and healthy manner, damaging no one and serving the best interest of the CNMI and its people.

The Executive Branch: The executive branch needs to re-organize. A new slim, mean machine to replace the present one would seem to me to serve the needs of the people better and more efficiently and, you may not like it, but I believe this government has too many employees in many areas while others have nearly nothing. Now is the time for our governor to step forward and demonstrate that he really is the leader that most of us supported during his campaign.

Immigration: Our entire immigration policy should be thrown away and started anew. To all my nonresident friends, I am sorry, but if you are here as a contract worker and your job is finished or your employer elects not to renew your contract, you must leave. No one promised you (or your family) the rest of your life on U.S. soil—just a temporary job. The Department of Labor doesn’t seem to be much better, twisting and turning the regulations on a whim and, although some enforcement is beginning to take place, not doing nearly enough to keep the underground labor pool from wreaking havoc on the system.

One Bright Spot: One bright spot seems to be the office of the public auditor. But Mr. Sablan has more than his share of work and even when the most blatant of unethical, improper or outright illegal activities are uncovered, the punishment is usually delivered by someone who just hasn’t been caught yet and has no desire to stir the pot further. Anyway, let’s hope Mr. Sablan can keep up the good work. You DO have friends out here.

We must open the doors of the CNMI to business. We should let the Koreans invest $500 million dollars in Tinian, let Azmar invest in Pagan, let other legitimate offers come to fruition—and there are some. Any combination of two or three of the largest of these offers would have already formed a base for millions of dollars in revenue for the CNMI—and maybe I wouldn’t have to write such long letters.

This is an election year. Please remember that. Now is our turn to find out what the candidates believe in. I’m going to ask them. Won’t you? Then I will vote for the ones I think really care about the CNMI. Wouldn’t you? This time let’s forget the family relationships; forget the favor you owe someone; forget the politics or the “party” line. This time, let’s vote for one who seems to offer the best program and the best ideas and the intestinal fortitude to stand up to the crybabies and wannabees. Then hold their feet to the fire. I believe the future of the CNMI depends on it.

Mr. Smith, not one single scary exclamation point.

Remember that old Chinese proverb: “All good things come to he that waits.” The little known second line reads: “But only the things left behind by he that hustles.”

Dr. Thomas D. Arkle, Jr.
San Jose, Tinian