Ada cites CNMI investments, challenges in Hawaii conference

Tax benefits, strategic location, a U.S. legal protection and exemption from the Jones Act are among the CNMI advantages touted by Commerce Secretary Michael J. Ada in his remarks before investors at the Fifth Conference on Business Opportunities in the Islands held in Honolulu.

“The CNMI possesses favorable tax benefits to firms operating in our jurisdiction, in addition to a strategic location to major Asian markets, as well as to our neighboring island of Guam, which will be experiencing an unprecedented economic and population growth thanks to the much anticipated military buildup,” Ada told participants.

Ada led the CNMI team in the April 6-8 conference sponsored by the U.S. Department of the Interior.

The Interior, in an earlier statement, said the conference brought together some 500 participants who were briefed on possible businesses that may be explored in the CNMI, Guam, American Samoa, and the U.S. Virgin Islands, as well as the Marshall Islands, Palau, and the Federated States of Micronesia.

The potential investments focused on tourism, infrastructure development, and renewable energy solutions.

Ada said the CNMI’s political union with the United States provides the legal protection of the U.S. to business transactions while availing of a close proximity to major non-U.S. markets.

“The CNMI’s exemption from the Jones Act provides a favorable benefit for those firms engaged in commercial trade within our jurisdiction. A business-oriented government is actively engaging the private business sector in its efforts toward economic development and providing a favorable climate for investments,” he added.

The Jones Act, or the U.S Merchant Marine Act of 1920, requires goods transported between any two U.S. ports to be shipped on American flag vessels. The CNMI is not bound by this requirement. Thus, any foreign flag carrier, most of which have lower freight rates than those of American bottoms, can load cargo at any U. S. port and deliver that cargo to the CNMI.

Saipan, according to Ada, has been able to diversify its economy, from aquaculture to educational tourism, “and continues to be open to investments serving as a good fit for the community and the investor.”

With the pristine beauty of Rota, eco-tourism opportunities exist, while gaming also serves as an emerging opportunity.

“With its recent designation as a U.S. national monument, the Northern Marianas Marine National Monument is garnering worldwide attention for the CNMI, which presents significant opportunities for our much prized tourism industry,” Ada said.

The Commerce secretary said Tinian is sought after for purposes of military engagement, but the gaming industry continues to be the mainstay.

“The three populated islands of Saipan, Rota and Tinian present unique and promising investment opportunities, while our uninhabited islands present significant opportunities for resource extraction, research, and a tremendous potential for alternative energy production,” he added.

But while the CNMI has tremendous opportunities, these opportunities do not come without challenges.

Among these challenges is the impact of Public Law 110-229, which puts CNMI immigration under federal control but Ada said the CNMI is confident that careful consideration will be given to minimize its potential consequences.

The CNMI government has a pending lawsuit against the U.S. government over federalization.

Oil price increases and high costs associated with power production have also been compounded by infrastructure challenges. Ada said the government addressed the power crisis by securing temporary power production while at the same time rehabilitating its engines.

The CNMI will also leverage funding available from the American Recovery and Reinvestment Act of 2009 to reduce its reliance on fossil fuel and explore alternative energy sources, Ada added.

Tuesday’s afternoon sessions consisted of presentations developed by the island delegations. These dedicated sessions, with each island jurisdiction having its own hour-long block, allowed island leaders to provide conference attendees with a deeper look at the variety of business opportunities and incentives for doing business on their islands.

The panel for the CNMI’s session consisted of Ada, Lynn Knight, chairwoman of the Commonwealth Economic Development Commission, and Arthur Smith, president of Management Analysis Inc.

In her presentation, Knight said: “There has never been a more business friendly environment” in the CNMI, citing the recent work of Gov. Benigno Fitial and Ada.

Ada touted the 2009 CNMI Comprehensive Economic Development Strategy, which provides a plan outlining critical economic development projects to lay the groundwork for economic recovery.

Smith offered more details on the public-private partnerships offered in the CNMI, including: development of Pinatang Beach Park on Rota, renovation and improvement of the Tinian and Rota seaports, modernization and optimization of CUC Power Plant 1, territory-wide alternative energy solutions, and redevelopment of an 80,000 square meter property in Garapan.

On April 2 and 3, Commerce also co-hosted an Economic Restoration Summit, which outlined four major industries that the CNMI will focus its efforts on developing: agriculture, aquaculture, edu-tourism and call centers.

Guam Lt. Gov. Michal Cruz, who was the keynote speaker, highlighted the important role the CNMI will play in ensuring that the Guam military buildup is successful.

“To emphasize the importance of the collaboration, Lt. Gov. Cruz and Gov. Felix Camacho propose that the Guam military buildup be called the Marianas buildup. This proposal is very appropriate, as the impacts and opportunities will be felt throughout the entire Marianas region,” Ada said.

The conference ended Wednesday, April 8, with a full day of business-to-business meetings facilitated by DOI staff, allowing attendees to meet individually to develop joint ventures and secure partnerships following the previous days of networking. Over 300 meetings were officially scheduled.