CNMI PROJECTED TO LOSE OVER $40 MILLION
With the CNMI economy still struggling to recover from the blow of Super Typhoon Yutu in late 2019 now comes another whammy: a viral outbreak that is projected to cost the CNMI a staggering $40 million-plus in revenue loss by the end of the fiscal year in October.
Speaking in front of business leaders at the Saipan Chamber of Commerce membership meeting yesterday at Kanoa Resort in Susupe, Gov. Ralph DLG Torres said this is the estimated body blow that the CNMI economy may have to absorb.
“Almost every economy in the Asia-Pacific region is negatively affected by the loss of Chinese tourism. Early projections show that we are set to lose at least $40 million in revenue,” he said in describing the economic situation of the CNMI.
As the CNMI tries to prevent the entry of the novel coronavirus into the islands, it has been losing tourists from China since late January, as evidenced by booking cancellations from Chinese tour operators and flight suspensions from Sichuan Airlines, China Eastern Airlines, Beijing Capital Airlines and, recently, HK Express.
That cancellation by HK Express means that, instead of a loss of $40 million by the end of the fiscal year, the CNMI government will have to again adjust its projected loss by an additional $4 million or as much as $7 million, Torres said.
“I understand that there have been discussions around the community about us returning to austerity. I can tell you all right now, that all the options are on the table,” he added.
Torres said he will be meeting with the Legislature soon to adapt and make the budget adjustments now. He said he and his team at the Executive Branch usually meet with the Legislature every week to give lawmakers an update on what is going on in the tourism industry “because there is a formula to calculate that loss. …We are reinforcing our cost-containment measures and we are looking at every angle…to seek ways in which we can generate revenues to keep essential public services going.”
“…We are looking at reduction of [work] hours, maybe eight or more. I know it has been very challenging the last two years for all of us, with the CW issues and Yutu. Now with this unforeseen outbreak and its impact on the global economy, it is going to take longer to recover,” he added.
Torres assures that CNMI will continue to take proactive action and preventive measures against the coronavirus and any other illnesses. “Our public health is our priority and the safety and security of our people will take precedence over anything else,” he said.
He said the Commonwealth Health Care Corp. has been screening passengers to ensure that no tourist with the coronavirus will enter the CNMI.
He said this virus outbreak underscores the need to not just diversify the CNMI’s tourism industry but also to diversify the CNMI’s economy as a whole and not rely on just one industry. “…when you have a diversified tourism, there is a balanced market that you can rely on. …Let us work together to encourage visitors from our other source markets in Japan and Korea to come and enjoy our beautiful islands as this is what we can do to minimize the negative effects of this economic loss,” he said.
“…we must continue to diversify our economy to be more than just tourism, so we can open business opportunities for cannabis, technology and other industries. It hasn’t been perfect but I know we can solve a lot of our problems when we work together and continue to promote the Marianas as coronavirus-free and a world-class destination,” he added.