New investments help rather than hurt CNMI residents

At a recent gathering in Honolulu, Speaker Benigno R. Fitial was asked if his plans to attract new businesses into the Commonwealth would in any way cut into local entrepreneurship. In other words, the question posed to the Speaker was, “Would new businesses and new investments kill locally-owned businesses?” That is to say, would CNMI business-owners be harmed by the outside competition that Speaker Fitial would attract through various pro-business incentives?

In response to this pointed query, the Speaker and Covenant Party gubernatorial candidate replied that, no, in all probability, local business-owners would not be harmed by the economic incentive package he would put forth as governor, if elected. The Speaker reasoned that the bulk of his incentive package would be aimed at substantial new investments in the area of $20 million or more.

And, quite naturally, since the vast majority of local business-owners would not likely be competing in these highly capitalized new industries, most local outfits would not be harmed. Since local entrepreneurs would not be significantly competing for free trade zones and $20 million projects in new high-tech industries, they generally have nothing to fear from Mr. Fitial’s proposed economic incentives.

While the Speaker’s response was a good one, unfortunately, it did not quite go far enough. What he should have added was this: “More outside businesses and investments do not harm local businesses. They do not harm local consumers at all; on the contrary, they offer more market competition, which leads to lower prices and better customer service.

“More outside investments are good for our people and for our economy, and here’s why: because more investments–more new businesses–create a bigger economic pie for all involved. We benefit from more outside investments and from an expanded economy.

“When Japanese, Chinese, Korean and other investments were pouring into our islands during the boom years (the late 1980s to early 1990s), more locally-owned businesses were created than ever before. During the boom years, more locally-owned businesses were created than destroyed.

“New businesses bring new investments–new money–into our economy, which translates into greater economic opportunities for all (not just for the rich but for anyone willing to pursue the American Dream by doing what it takes to succeed in a competitive, merit-based business environment free of unwarranted restrictions).

“Note that after the Asian economic crisis and our own local leadership crisis undermined additional CNMI investments, more than 1,000 CNMI businesses–both foreign and domestic–closed shop. Local businesses, like all other businesses–Korean, Chinese, Sri Lankan, you name it–do not benefit from our Senate’s anti-business mentality. Anti-business policies hurt all businesses–especially small and relatively undercapitalized locally-owned ones.

“Never let anyone tell you that foreign businesses hurt local businesses, because the only people really hurting local businesses are the liberal, tax-and-spend, restrict-and-overregulate politicians up there on Capitol Hill.” And Speaker Fitial is certainly not one of them.

Strictly a personal view. Charles Reyes Jr. is a regular columnist of Saipan Tribune. Mr. Reyes may be reached at charlesraves@hotmail.com