A bank economic forecast has predicted steady economic growth for Guam and tough times ahead for the Northern Marianas.<\/p>\n
According to First Hawaiian Bank\u2019s 2008 Guam-CNMI Economic Forecast, the prospect for Guam is generally bright, thanks to the planned military buildup. However, the economic outlook for the Commonwealth is not as optimistic.<\/p>\n
\u201cGuam\u2019s economy continues to fire on all cylinders in anticipation of its coming military buildup. Preparing for that buildup is an enormous task for the isolated island economy, and that causes some on Guam to question how realistic the targeted timeframe is. Just to the north, the CNMI economy struggles with hard times brought on by serious blows to its major industries,\u201d said FHB economic consultant Leroy Laney, a professor of economics and finance at Hawaii Pacific University.<\/p>\n
Laney said the CNMI\u2019s bleak economic condition may not get any better soon. He noted that both of its main industries\u2014garment manufacturing and tourism\u2014had suffered blows, and the CNMI must find some new economic growth engine to survive.<\/p>\n
Tinian\u2019s fledgling casino industry offers a glimmer of hope, despite challenges stemming from the island\u2019s isolation and unreliable transportation. \u201cYet overall,\u201d Laney said, \u201cthe CNMI economy is now left with few economic straws to grasp.\u201d<\/p>\n
Laney added that recent minimum wage hikes and the controversial immigration federalization bill contribute to the economic uncertainty in the Commonwealth.<\/p>\n
The spokesperson for the Fitial administration said the FHB reports seems to be \u201ca fairly realistic assessment\u201d of the CNMI\u2019s current economic challenges in view of federalization, forced federal minimum wage hikes, and the decline of the garment and tourism industries. <\/p>\n
\u201cThis report appropriately concludes that federal wage hikes\u2014imposed without adequate economic studies or support\u2014are harmful to our local economy and federal immigration may pose further complications and challenges for our struggling island economy. The U.S. Congress needs to see this independent, non-partisan report and carefully consider federal policy in the islands,\u201d Reyes said.<\/p>\n
One measure that the CNMI could consider, according to Laney, is to review existing restriction on land tenure.<\/p>\n
The CNMI Constitution limits permanent ownership of real property to persons of Northern Marianas descent. Those not qualified as NMDs can only lease public land for up to 40 years and private land for up to 55 years. There are initiatives underway to extend the leasehold interest for private land to 75 years.<\/p>\n
Laney said the land tenure restriction introduces unique problems for residential buyers, outside investors, and lenders within the CNMI.<\/p>\n
\u201cModifications of the land tenure limits, or even outright appeal, would help. At times like the present in the CNMI economy, no possibility for enhancing growth should be ignored,\u201d he said.<\/p>\n
As for Guam, Laney said, the expected huge increase in military presence on the island will have major repercussions for construction, housing supply, housing prices, and retail activity.<\/p>\n
But Guam\u2019s boom has its downsides. The increase economic activity is expected to bring higher inflation, more congestion, greater pressure on outdated infrastructure, and potential social problems of various kinds, Laney said.<\/p>\n","protected":false},"excerpt":{"rendered":"
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