Business sector still hurting

Despite a slight improvement in tourist arrivals, most of the businesses on the island could still barely survive the effects of Asia’s financial crisis, with earnings just enough to maintain the day-to-day operation.

“It is still a roller coaster ride for most of us,” said acting Saipan Chamber of Commerce president Gregg Kresge.

The assessment on how business on the island are coping with the prolonged economic slowdown was conducted through a telephone survey among Chamber members last month.

The survey was conducted to help the business sector in presenting a position paper in Washington D.C. for the scheduled U.S. Congress oversight hearing in September.

A regular survey on current issues is just one way the Chamber could ask its members to air their views on timely issues that will affect their conduct of business on the island.

With businesses still reeling from the effects of the regional crisis, a renewed federal takeover attempts makes the investment climate very uncertain. “We want to maintain the status quo and continue to oppose all moves to assume local labor and immigration functions,” said Kresge.

The Chamber’s position will be presented by its president, Kerry Deets, in the congressional hearing.

Earlier, the Hotel Association of Northern Mariana Islands and the Chamber said they wanted to be given credit for subsidies on housing, food, local transportation and medical treatment extended to non-resident workers if the federal minimum wage is implemented.

They said the Wage Review Board must take into consideration the additional benefits provided to non- resident workers which would result in an increase from the present $3.05 per hour rate to $6 to $7 per hour in minimum wage, higher than the $5.25 mainland standard.

HANMI president Ron Sablan said no business in the CNMI would be able to afford an increment of 30 cents per year and still pay for the benefits required under the law. He said the federal minimum wage in the U.S. has no relevance whatsoever to the island’s economy, which has been devastated by the regional crisis in Asia where the costs of doing business are far higher.

A study on the CNMI economy conducted by Dr. Richard Conway, principal of Conway & Associates, a Seattle-based firm engaged in regional economic research and consulting since 1981, said the island may continue to experience the slowdown until 2005.

According to Conway, the CNMI’s tourism industry, which has been battered by Asia’s financial crisis, may grow faster than 5 percent annually between now and the year 2005.

With the expected removal of trade quotas in the year 2005 by the World Trade Organization, the Northern Marianas will lose some 3,090 jobs annually, including 2,030 in the garment industry.

Over a seven-year period, the CNMI economy would lose a net of 2,130 jobs per year, Conway said. By the year 2005, the Northern Marianas would have roughly one-third fewer jobs than it does today.