Stagnant but cautiously optimistic

High prices on goods, utilities and transportation, coupled with a drop in tourism, have put a strain on many Tinian businesses, observers say, forcing some to scale back services to compensate.

“You can feel there is a downturn,” William Cing, an adviser to Tinian Mayor Jose San Nicolas, said in an interview last week. “You don’t have to look at pie charts.”

The pending military buildup in the region, however, and an array of construction projects could bolster Tinian’s economy with new jobs and opportunity. Among these prospects are two new resorts slated to begin construction in the near future.

Yet for Tinian to see a significant economic revival, many locals say the island must first address infrastructure needs like repairing the breakwater at the local port, establishing a new solid waste dump and installing a new instrument landing system for the airport, a project that is now in its early stages.

Meanwhile, Tinian’s current economic woes are increasingly tied to high shipping costs, which business leaders say have driven up the price of retail goods and materials, further diminishing local businesses’ financial resources.

“People just don’t have the spending power anymore to bring things to the island,” said Trenton Conner, operating manager of Tinian Stevedores Inc, which handles cargo at the island’s port. “The economy is kind of stagnant now. Everything is at a standstill.”

Shipping to Tinian has diminished recently, he added, with far fewer containers arriving. And next month, the price of transporting a 20-foot-long shipping container to Tinian is set to almost triple, he noted, from about $660 to $1,850 depending on its contents—an increase which will likely exacerbate problems for the island’s business community.

To locally owned businesses like grocery and retail stores, an added challenge recently has become their foreigner-owned competition, who have the resources to lower prices below what they can offer to customers, several business leaders say. Consequently, they add, local shops are being slowly priced out of the market.

“Their prices are obviously cheaper than most of the other markets,” said Kimberly Hinds, who runs a grocery and water bottling company on the island. “How are they able to stay in business and set their prices the way they do?”

At the same time, although the consistent power outages that plague Saipan are not a problem on Tinian, high power rates are eating into the profits of many businesses, with some owners now having to make tough choices to stay in operation.

“The power rate is basically affecting our ability to put stuff on the shelf,” Hinds said, adding that most local businesses are now in “survival mode.”

For example, the Tinian Dynasty Hotel and Casino now has a black curtain barring access to half of its casino floor, a move management said is intended to conserve energy.

“It’s at a point where people have to choose between getting power and putting food on the table,” said Conner.

In spite of these problems, several local business leaders said plans to develop new hotels on the island could be a potential economic boon. One, the Tinian Oceanview Resort and Condominiums, a project by the Bridge Investment Group, has recently entered its first phase, constructing the staff housing and groundwork needed to begin building. Plans for a second, the Matua Bay Resort, recently unveiled at a press conference earlier this month, are moving forward after the submission of an environmental study of the site. Gaming commissioners are also investigating the financial backing for a third proposed resort on the island, put forth by the Neo Gold Wings Paradise Saipan Corp.

Moreover, businesses are eying the military buildup slated to begin in the area as a vehicle to improve economic conditions and the island’s infrastructure. Military officials have said Tinian will likely serve as the staging ground for training activities.

“Everybody is looking at the military buildup for the future,” said Conner, noting that it could increase the amount of shipping traffic at the port.

‘You can feel there is a downturn. You don’t have to look at pie charts.’
[I]—William Cing[/I]

‘People just don’t have the spending power anymore to bring things to the island. The economy is kind of stagnant now. Everything is at a standstill.’
[I]—Trenton Conner[/I]

‘The power rate is basically affecting our ability to put stuff on the shelf.’
[I]—Kimberly Hinds[/I]