The CNMI gubernatorial leadership: 1978-2004

Last of five parts

FROM 1988 THROUGH 1998

For the businesses that are associated with the garment industry in the CNMI, the situation has gotten worse for the simple reason the Multi-Fiber Agreement that will govern the textile and garment trade will take effect beginning January 2005. Specifically, the quotas will disappear for textiles, although import duties will remain. According to the Bank of Hawaii CNMI economic report of 2003, lifting quotas will make it possible for producers of labor-intensive goods such as garments to sell more of their products in markets such as the United States, Europe, and Japan, even with import duties. The countries in the global market that will benefit from the stipulations of this agreement will be China and Mexico. The Commonwealth will be amongst the countries that will have a tough time competing because of higher production cost. Thus, it is safe to say that for anyone who is in the garment industry in the Commonwealth, things are getting worse everyday—the antithesis of what Gov. Juan N. Babauta said in his State of the Commonwealth speech on April 30, 2004.

Babauta also said in his speech that, “last year we promised bold, innovative, systemic changes—major surgery—to really restore our islands to good health and today we are shortchanging our students and it shows.” The changes that have been implemented since 2002 have added more to a deficit that is hovering around $105 million. Having this much red ink will have negative repercussions on a variety of governmental programs and services. It also takes away fiscal stability, which negatively impacts the government’s ability to ask for and/or being involved with credit.

Another remark made by Gov. Babauta in his State of the Commonwealth speech was “spending dropped by $24 million since his administration began.” The fact of the matter is that this figure is in direct conflict with the total revenues collected for the FY 2002 ($287,615,613) and total expenditures ($314,985,333) which is clearly a “deficiency” of revenues under the expenditures by approximately $27,369,720. And with the deficit spending for FY 2003 added onto the amount for FY2002, there was an increased amount of spending as opposed to a drop of spending by $24 million.

Moreover, the $4.6 million in federal funding and CNMI revenues for the failed Pacific Gateway project and La Fiesta Mall acquisition has not done anything positive for higher education in the Commonwealth. Had the funds been used for books, campus repairs, much need equipment, buses, and faculty and staff raises, then the students, as well as the faculty, staff, and all of the schools on all three islands of the Commonwealth would not have been shortchanged.

Regarding the “tourist industry”, the number of visitors may have exceeded the 1999 figure, but the key to the tourist industry is “how much capital will they expend while they are visiting the CNMI?” According to the BoH CNMI economic report of 2003, which gets its tourist statistics from the Hotel Association of the Northern Mariana Islands and the Marianas Visitors Authority, there are no statistics for either the “estimated total tourism or average spending” from 1998 to the present. Hence, there is no way of gauging how much of a positive or negative impact the number of visitors from other countries will make on the CNMI without having statistics relative to how much they spent when they came to the Commonwealth.

Babauta will be entering the last year of his gubernatorial term in the CNMI. The abovementioned statistics regarding a variety of areas he discussed in his State of the Commonwealth speech can be checked in the various reports cited. Since what has been recently iterated by the governor since his inauguration is in direct conflict of what has been discussed and documented in reports from two CNMI agencies, as well as a reputable banking organization, reflecting the three years he has been in office, then there will always be some doubt as to whether Juan Babauta has been truly on the level with the island community about the true fiscal health of the CNMI government.

Dr. Jesus D. Camacho
Delano, CA 93215