TODAY, Oct. 15, the Senate holds its fourth day of its regular session in Rota, and part of the agenda is the final reading of House Bill 22-70 or the Investment Incentive Act of 2021 authored by Rep. Angel Demapan, which was unanimously passed by the House of Representatives this past August.
The Governor’s Council of Economic Advisers looks forward to the passage of the bill that would give the Marianas the competitive edge in attracting quality investors, modernize our approach in conducting business in the Marianas, and support the Commonwealth Economic Development Authority’s efforts in diversifying our economy.
House Bill 22-70 was built on the framework created in the Investment Incentive Act of 2000. This original act was developed for its time, providing the incentives the Marianas had at its disposal. It addressed the impacts on the tourism industry that resulted from the Asian financial crisis and the looming departure of the manufacturing economy. Since 2000, there have been minimal amendments to this approach, locking in targeted industries and minimum capital investment requirements of the circumstances and objectives of that period. Through these amendments, the Marianas will be given the ability to remain flexible to the demands of the global market and the evolving needs of our community for today’s economy and the global economy of the future.
The Marianas requires key investments to be able to expand its opportunities in the market. One example is the development of a convention center to attract and develop the Meetings, Incentives, Conferences, and Exhibition tourism market. Without it, access to this sought-after market remains out of reach for the visitor industry.
The need for key investments goes even further and constrains our ability to achieve economic diversity. We need more private sector investment in utility services, healthcare, and modern commercial spaces. We also need to strategically plan for how the Marianas can best make use of its underutilized public lands.
Through the Investment Incentive Act of 2021, CEDA, the lead agency that would pursue investment opportunities for the Marianas, will be equipped with tools to be competitive in the global race for qualified investors. The creation of the Strategic Investment Program contained in H.B. 22-70 will empower CEDA to seek out the needs of the community and the economy. It can pursue investments that will have the greatest impact on the Commonwealth, assess its marketability, and make strategic economic priority projects investment ready for qualified investors.
Although H.B. 22-70 is not the final solution to the Marianas’ economic development objectives, it is critical in addressing some of the most pressing hurdles to sustainable economic growth. For example, it will provide a simplified investment process, allow the Marianas to define its economic development objectives, and create a system for performing due diligence on investors to ensure their ability to complete and successfully operate an investment.
Together, we can reform the Marianas’ approach to economic development through a critical piece of legislation and renew our focus on investments driven by the priorities of the Commonwealth and its people and offer a more sustainable and quality economy in the years to come.
Matt Deleon Guerrero is an economist with Hive Analytics, a Saipan-based data analytics and research firm specializing in services for businesses that want to better understand their economy and business climate. He serves as chairman of the Fiscal Economic Diversification Committee for the GCEA, an advisory council for Gov. Ralph DLG Torres and Lt. Gov. Arnold I. Palacios. The GCEA’s mission is to improve the quality of life in the Marianas for all residents.