GAO report may shield CNMI vs fed takeover

A report prepared by the accounting and investigative arm of the U.S. Congress on the Commonwealth’s economy could be a strong shield against Washington D.C. efforts to extend federal immigration and minimum wage laws into the CNMI.

Gov. Pedro P. Tenorio yesterday expressed confidence the U.S. Congress will take into consideration the General Accounting Office report when it tackles legislative measures on the federalization of CNMI immigration and minimum wage.

Mr. Tenorio said the study was actually requested by the U.S. Congress in light of recommendations and report submitted by the Clinton Administration detailing harsh accusations against the Commonwealth’s handling of its own labor and immigration policies.

But the governor said the CNMI is expecting the GAO report to stand alone, underscoring the need to supplement the findings with concrete efforts from the local government in carrying out continued and intensified labor reforms.

Mr. Tenorio said his administration will push through with the strict implementation of policies concerning labor and immigration, as well as other areas, even without a pressure from the federal government.

“That’s what we should do and we remain committed to our obligations to CNMI residents, the federal government and our guest workers who are undoubtedly a significant factor in building the local economy,” he added.

He stressed that the government will continuously enforce the labor and immigration reforms it has instituted when strong proposals to federalize local labor and immigration control surfaced several years ago.

“We are working so hard in trying to resolve some of the problems that happened in the past. We hope the federal government has finally recognized the merits of these labor and immigration reform programs,” Mr. Tenorio said.

He noted that both the administration and the legislature have been reviewing policies and legislation that have to be amended, in efforts to address the concerns raised by the federal government on local labor and immigration.

The local chief executive emphasized that the labor and commerce departments have been instructed to look at either closing down the businesses or revoking the license of habitual violators.

On the GAO findings, Mr. Tenorio admitted that the report has been a boost to the Commonwealth’s efforts to dispute allegations hurled by the Department of the Interior’s Office of Insular Affairs concerning the islands’ labor-intensive garment and tourism industries.

However, a February 2000 report prepared by the U.S.-GAO said the presence of foreign workers in the islands has been directly and indirectly paving the way for the continued survival of the government and businesses in other sectors.

The GAO report questions findings by the Office of Insular Affairs that the garment and tourist industries and the workers they employ require government spending for services and infrastructure that exceeds what they contribute in revenue.

GAO validated the multiplier effect of garment and tourism industries to other business sectors, as well as to the growth of the local government which received over $50 million from the apparel manufacturing and $34 million from the travel sectors in 1998.

Primarily fueled by growth in the garment and tourism industries, CNMI has risen to be the most fiscally self-sufficient among other U.S. outlying areas like Guam, Puerto Rico, the U.S. Virgin Islands and the Freely Associated States.

The ratio of locally derived government revenue to gross domestic product in the CNMI is also higher than that of most other outlying areas and is larger than the comparable ratio for all levels of government in the U.S.

GAO also revealed that employment on Saipan improved faster by 183 percent than the island’s population growth rate which increased by 169 percent between 1980 and 1999.

The GAO findings contradicts a report previously released by the U.S. Department of the Interior’s Office of Insular Affairs that the island’s unemployment rate has skyrocketed due to the influx of foreign workers in the Northern Marianas.

GAO said labor participation among U.S. citizens on Saipan increased from about 58 percent in 1980 to 68 percent last year. Also, the number of U.S. citizens in the island who were self-employed rose from 2.5 percent to 5.0 percent of those employed over the same period.

It pointed out that the widespread use by apparel and tourism industries of nonresident workers from Asia has nothing to do with the alarming unemployment rate in the CNMI as claimed by the U.S. Department of the Interior.

“We found no data that support the claim that unemployment in the CNMI is caused by the garment and tourist industries or by their use of foreign labor,” the GAO February 2000 report said.