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‘We need to get our economy up and running’

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THE Governor’s Council Of Economic Advisors subcommittee chairpersons Alex Sablan and Matthew Deleon Guerrero talked about proposals to revive the economy on KKMP radio last week.

Sablan said council chairman Jerry Tan, council members and the governor “have been focused on this theme of ‘Together, We Can Be World Class,’ and our tagline that we want to continue to use is, ‘Together, We Can.’”

He added, “The intent is to start now and to start a process that gets us to [being] a world-class destination… I think all can recognize that our islands are very beautiful and [that is] one of the selling points as to why people come [from] near and far within our region.”

He said the CNMI expects to receive hundreds of millions of dollars in federal grants in the next three to five years.

“We’ve all heard of the over $200 million… for housing, for destination enhancement, [and] for [the Commonwealth Utilities Corporation]…. We’re soon to hopefully receive word about a grant for the Oleai Sports Complex, which looks to be over $20 million. We also have $3.5 million from FEMA funding for the Oleai Sports Complex,” he added.

Sablan said the council chair and the governor are signing up organizations in a public-private partnership to maintain and beautify tourist sites and villages.

“The effort here is to join forces as a community, and to really look at what is our number one industry… We’re going to need to open up safely… We have been talking about what we can do to help open up the Commonwealth to tourism again. Safety is completely in mind here, and so we’ve written suggestions to the Covid-19 Task Force, [the Commonwealth Healthcare Corp.], and the rest of the medical community….”

Sablan said the CNMI is attempting to try to reopen in the course of the next six months to a year.

“We need to get our economy up and running. We’re hopeful that we can get Korea going, and we’re hopeful that we can soon follow with Japan. China, of course, is a whole different story,” he added, referring to the strained relations between the U.S. and China.

“We’re hopeful that that gets resolved as quickly as possible as well. We need all three markets to make our numbers work for us and to grow our tourism base. The greater economy needs to open, and we need to get money flowing in here as quickly as possible so that people have jobs and we have the ability to regain and move our economy forward,” Sablan said.

Matthew Deleon Guerrero, for his part, said even if “a vaccine comes out tomorrow, it would take a period of time before the vaccine starts to spread its way through different countries, into different populations, and to start impacting the concerns and the confidence within the consumer market, especially for international tourism, and that’s going to take time in itself.”

 

In late July, members of the Governor’s Council of Economic Advisors meet with the House Committee on Commerce and Tourism in the House chamber. Photo by K-Andrea Evarose S. Limol

He added, “Assuming that a vaccine comes into play in January [or] February of  2021, which may be optimistic, nobody really knows — typically, it can take about six to eight months until a full rebound from a natural disaster…. If we were to assume that this crisis has a similar effect on tourism markets as a natural disaster, then that may be the time frame.”

He reiterated that this may be an optimistic time frame, “but if we were trying to take a look at what the previous impacts are, I would say that somewhere in either the third quarter or fourth quarter of FY21 is ideal.”

Pre-Covid-19, Deleon Guerrero said, the economy was roughly worth about $1.3 billion with 52% approximately related to tourism.

“We need a continual injection of new capital and new resources in order to start the process over again. For the past couple of years since the decline and the elimination of the garment industry, it really has been tourism to a greater and greater extent,” he added.

Deleon Guerrero said the complete elimination of tourism following the coronavirus outbreak had a significant and an unprecedented impact on the CNMI economy.

“It was a complete shutout of any new dollars up until the point of stimulus, and now up until the point of [the Pandemic Unemployment Assistance].... Even the best-run business typically has a three- to four-month reserve capacity to be able to handle the consistent volatility that the CNMI economy has experienced in previous years,” he added.

He said once December hits and the supply of new cash from PUA is no longer available, “then the clock starts again, and then it becomes worrisome as to how many businesses, small and large, won’t be able to weather the limitation on money that’s circulating in the system, and will they ever reopen if they do close?”

He noted that several businesses on island have already closed or are closing.

“It also should be recognized that if there was an alternative [industry] that would have existed, it should have already existed, so there must have been some impediment in the way, whether it’s a government impediment [or]... an infrastructure impediment.

“Even though we’ve consistently talked about economic diversification as a priority, talking about it doesn’t necessarily remedy any of the underlying issues and obstacles that private sector investors from the mainland or from other industries are looking for,” Deleon Guerrero said.

He said government expenditures, government revenue, and the tourism market economy are directly tied together, and that the government relies primarily on business gross revenue tax to fund its operations.

The other members of the Governor’s Council of Economic Advisors are KKMP’s Gary Sword; Sen. Frank Borja; Rep. Joseph Leepan Guerrero; Bo Palacios, vice president, J.C. Tenorio Enterprises; Masato Tezuka, president, Tasi Tours; businessman Joe Guerrero; Don J. Power, vice president, FPA Pacific Corp.; Marcie M. Tomokane, vice president/CNMI regional manager,  Bank of Guam; Alex B.K. Youn, president, AC Pacific LLC dba Star Sands Plaza and I Love Saipan; and Aubry Hocog, special assistant for programs and grants, Rota mayor’s office.

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