Why we can and must prosper again: Part I

This year 2009 is a year for self examination. We are being forced to make several momentous decisions which will markedly affect our future. Three major ones are: 1. the election of a governor and new :egislature; 2. how to best adapt to the federalization act, and 3. how to turn our sagging economy around. We will discuss the first two at another time. Today let us focus on how we are going to rebuild our economy. Much of what you will read I have repeatedly said before. However I want to reinforce the message until it becomes a reality.

Before we can plan for the future, we must review how we came to be in these dire straits. Today’s dilemma did not happen overnight. It is the result of many years of mismanaging our economy and of neglecting our most precious asset—a local workforce trained in work attitudes and risk-taking. Unless we change the damage done to our people by the insensitive actions of our government and its greed for self-preservation, we will never regain prosperity.

We cannot rely on, and must not rely on, outside investors to save us. We must train our people to develop our own industries. All countries today that are prosperous are doing exactly that. A nation’s strength lies in its people, not in its assets. After a time a nation’s assets become depleted, but the skills of its people will create new assets.

In previous years our economy grew not from our own efforts but from the impetus of outside investors. Remember the glory days of the garment industry and hotel building by Japanese companies? These outside driving forces have been greatly been reduced for several years. Today if we wish to rebuild the previous prosperity we enjoyed, we must make the improvements from our own efforts. We must come to understand who we are and understand what our assets are and how to utilize them.

We know the garment industry, while prospering for itself, is no longer an industry. The Japanese investors have now left us and as a result our tourism industry is sagging badly. For a time both industries proved to be highly profitable. Both paid high taxes. As a result the government hired many “non-essential” workers who refused to work for the minimum wages.

In what it considered clever political moves, the government increased the wages of the public sector while making sure that the private sector wages were kept low so that the two above industries could flourish. It also increased chances for the government during that period to remain in power. It bought its patronage through jobs to its loyal followers. Today many of them are in jeopardy of being laid off because the party is over.

Unfortunately the garment industry contained seeds for self-destruction while the tourist industry isolated itself from the private sector. Simply put, neither industry encouraged the development of a local workforce. Both industries preferred to bring in their own help. And the government assisted them without realizing the negative efforts it was creating on our local workforce.

During these days of prosperity many local people flocked to join the government where wages were higher and working conditions more lax. They also enjoyed benefits of one of the most generous retirement plans in the world. Where else in the world than in the CNMI do government employees earn more than private sector employees and enjoy a bountiful retirement plan as early as less than 40 years old? A fall out of all of this is that many of these government workers must now be furloughed.

The ones with no political connections drifted into the garment industry to fill the minimum quota of local hire to satisfy the labor law. Rarely were any of these “token” employees given any training or responsibilities. They were simply tolerated as a necessary evil and expense.

The tourist industry brought in its own employees and employed the few locals it needed to fulfill the quota requirement. Nonresident workers filled the jobs of maintaining the hotels and doing other menial work. Again few locals were ever trained in the hospitality industry. Why should they when there were plenty non-resident workers available at low wages.

Both industries needed many employees. Our government, with influence from its political connections, was anxious to accommodate. However instead of encouraging our local people to apply for jobs in both industries, it opened the flood-gates for a huge influx of non-resident workers at the benefit of our local people. It further discouraged them from applying for work by keeping wages low. Meanwhile the government steadily raised the salaries of its own employees blatantly. Who could blame our local workforce for refusing to work for low wages?

So the party went on and the fortunate ones benefited through huge taxes. Happy times were here for the select few. The rest of us collected food stamps and drank away our rejection. The end result is that our economy was controlled on the whim and actions of outsiders. And as long as the odds were in their favor, we shared some of the harvest. But all too soon the tide changed and we were left to fend for ourselves. As a result look at where we are today. We had forgotten a basic rule in science: for all action there is a counteraction. We never considered what that would be. We had built our economy on sand.

Why didn’t anyone in the CNMI see the direction we were heading toward? When the garment industry began its exodus, why didn’t anyone question if we could become garment manufacturers for the U. S. military who spends over a billion dollars a year on clothing? To date, Puerto Rico, a commonwealth like the CNMI, receives over $400,000,000.00 per year of military garment contracts. The CNMI receives zero. Why? No one has ever approached the military. We didn’t even bother to ask the American garment manufacturers to do a join-venture. Because all U.S. military garments must be made in U.S. territory, we possibility could still have a garment industry.

Hindsight is a great opportunity to examine good and bad points. Now that the garment industry is only a memory and the tourist industry is on the ropes grasping for breath, it is time to look to the future. It is time to assess our strengths and decide on a course of action.

As we search for direction, let us never forget that the dilemma was caused through our own doing. It was brought about by greed of the few, and it was made worst by the total lack of planning to develop our “human capital.” We acted as parasites on the back of foreign investors, taking from them and not giving.

Despite the pessimism echoed by many citizens, I see and feel great challenges awaiting us. Next week I will discuss the assets we possess that can and will catapult us into the winner’s circle again. We have a bountiful ocean, a fertile soil, breathtaking scenery, a consistently warm climate, a young and eager to work population, and proximity to a huge market. Let us blend these ingredients to create a new era seasoned with a tireless strong will and desire.

This time by careful planning and by our own labor, we will build a strong and prosperous economy. The money is available. The assets are here. The workforce is waiting to be trained and is willing to become risk takers. Let us screw up our determination and will. Let’s create the desire and the rest will follow. Let’s do it!

Firmly imprint in our minds the words of Napoleon Hill as stated in his book Think and Grow Rich:

“Whatever the MIND OF MAN can CONCEIVE and BELIEVE it can ACHIEVE.”