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Variations | Free fallin’

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IN March 1999, the CNMI government convened an economic summit funded by the U.S. Department of the Interior’s Office of Insular Affairs.

(Since the U.S. took over the NMI after World War II, the feds have been picking up the tab for similar other fora/conferences/studies/reports, etc. The latest was the Fiscal Response Summit in April.)

Organized by NMC’s Business Development Center, the 1999 summit was in response to the local economic slowdown following the Asian currency crisis which reached the CNMI in early 1998. After several years of economic growth — the deluge.  We simply didn’t know what hit us, and how hard it had hit us. Many were hoping for a quick recovery, but it never happened. From 1998 to 2013 the CNMI economy was in a free fall. Because the end of the garment trade quotas in 2005 was announced in 1995, the exit of the garment industry was at least anticipated. But the persistent annual decline in tourist arrivals wasn’t.

What revived the local economy was 1) the entry of a new (and controversial) investor: the Saipan casino which provided the revenue that prevented the Retirement Fund’s collapse six years ago; and 2) tourist arrivals from a new (controversial) market, China, after almost a decade or more of wooing it.

Despite the widespread belief in quick-fixes and once-and-for-all “solutions,” there are no such things, especially when tinkering with something as maddeningly complex as an economy.

In the NMI’s case, because it no longer controls local immigration and wage policies, the Commonwealth now has fewer economic tools at its disposable. It is practically at the mercy of federal decision-makers and whatever is the prevailing political wind in faraway Washington, D.C.  (I wouldn’t be surprised if many CNMI officials and politicians are hoping for a Democratic sweep in this year’s U.S. elections which many believe could result in more generous federal bailouts.)

We have to remember that in rebuilding its economy, the NMI is also competing with other islands/jurisdictions that do not have to comply with investment rules designed for a first world nation with the world’s largest economy and a population of over 300 million. The NMI, in addition, is competing with other U.S. jurisdictions that have so much more of what the NMI lacks in terms of workforce, infrastructure, transportation links, amenities, etc.

Like their fellow Americans in the states, moreover, the U.S. citizens in the NMI can vote with their feet. The NMI is not their “country”; the U.S. is. And the U.S. is a big country with some of the world’s greatest metropolitan areas that continue to attract not only foreigners but Americans from other states and territories who are looking for opportunities as big as their dreams. And thanks to Commonwealth officials past and present, many NMI residents have degrees from U.S.-accredited colleges and universities, and are eager to keep learning and growing in the land of opportunity.

Once the Covid-19 travel restrictions are lifted here and in the rest of the U.S., it is reasonable to expect that many local residents and other U.S. citizens will do what many local people did the last time the local economy cratered: leave the islands.

In the 2001 and 2005 elections, voters tired of austerity measures voted for “change” and “better times,” and were baffled and disappointed that there were neither changes nor better times — just “new” officials implementing “changes” in personnel based mostly on political affiliations and/or considerations.

Ultimately, it is the state of the economy that matters. Politicians can always make grandiose promises, but these can be redeemed only if the economy is generating enough revenue. In the NMI’s case, you can elect only candidates with the purest of hearts and the highest of IQs with master’s degrees and PhDs, but once they’re already in power and have given jobs/contracts to their key followers/supporters, we’ll be again asking agonizing questions regarding pension payments, jobs for everyone else, wage rates,  healthcare, medical referrals, public education, public safety, scholarships, homesteads, the government’s obligations to bond holders, vendors, landowners etc., etc.

In other words, after this year’s elections, we will soon have, more or less, the same discussions we’re having now.

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