House moves to create business-friendly environment

In fresh efforts to revitalize the Commonwealth’s sluggish economy, the CNMI Legislature has forged an agreement aimed at fast-tracking the passage of legislation considered important to allowing growth in the business sector.

House Speaker Ben Fitial said the new system, which will expedite passing of mostly investment-related measures, is expected to facilitate growth and recovery of business activities in the islands.

The much-delayed scrapping of the $100,000 cash deposit required from foreign investors, which business analysts described as highly restrictive, could be one of the first package of bills that will see approval by both chambers of the Legislature.

Mr. Fitial yesterday introduced a comprehensive business and labor reform measure which he expects to receive strong support from members of the House of Representatives and the Senate.

A provision in the bill seeks to lift the cap on the number of garment factories in the CNMI. The Saipan garment manufacturing industry has emerged the biggest revenue-generating sector during the time tourism was down.

According to the House Speaker, his bill will ease restrictions that curtail economic growth in the islands. The legislation has the support of business organizations like the Saipan Chamber of Commerce, the Hotel Association and the Garment Manufacturers Association.

Mr. Fitial said drafting of the bill has been coordinated with the Senate and business leaders from major private sector organizations in the Northern Marianas.

The legislation has been referred to the House committee on commerce and tourism for review.

As this developed, Gov. Pedro P. Tenorio called for consolidated efforts that would help rebuild the Commonwealth’s tarnished image and eventually lure fresh capital into the islands.

Mr. Tenorio urged government officials to work together toward providing stability in local laws which had been a major concern among the members of the business community who claimed that instability of CNMI policies is chasing investors away.

Mr. Tenorio has also called for significant changes in the Commonwealth’s attitude toward issues which investors may feel too restrictive or protectionist.

The governor said efforts to revitalize the economy should start with a change of attitude, getting away from the old idea that potentials of the Commonwealth are limited because it is just a few small, remote islands with few resources.

Although he expressed alarm on the possibility of further revenue decline, the local chief executive maintains an optimistic view on the future of the CNMI despite forecasts that the Commonwealth may see another recession between now and the year 2005.

CNMI’s proximity to Asia and its distance from the United States mainland, coupled with its smallness, will always make its economy particularly susceptible to unforeseen external economic, political and social impacts.

Business analysts have said that in order to keep the local economic environment on track with the regional setting, the government should start seeking new sets of perks that would entice businessmen look for fresher investment opportunities.

The CNMI may have to improve perks granted to investors if it aims to be competitive with the incentives offered by neighboring island-states and countries in the Asia-Pacific Region.

The Economic Revitalization Task Force should also look at realigning existing business incentives or at least give it some flexibility where investors can choose which perks they need.

CNMI has been grossly impacted by the Asian economic crisis which started hitting economies in the region in mid-1997. Countries in the Asia-Pacific Rim are pinning their hopes on the return of capital to the region to spur economic recovery.