Teno hails garment sector for $140-M contributions

Gov. Pedro P. Tenorio yesterday acknowledged contributions of garment manufacturers to the local economy as industry leaders disclosed that over $140 million were infused by the sector in direct payments to the government and businesses in 1999.

“We know that many of you are making a lot of contributions to the economy and we certainly appreciate that,” the governor told the general membership meeting held by the Saipan Garment Manufacturers Association.

Mr. Tenorio, Senate President Paul A. Manglona and House Speaker Benigno R. Fitial attended the meeting which was held in closed doors at the Aqua Resort Club.

But a statement released by SGMA said the top government leaders were briefed on the economic impact of the industry on the islands’ economy.

Members also raised their concerns to the governor and the legislative leaders about the business during the nearly two-hour meeting, it added.

In a survey of the Saipan-based factories earlier this year, SGMA identified more than $140 million in direct contributions, representing over half of the government expenditures, the statement said.

“It wasn’t just the taxes the factories paid. It was the jobs we provided, it was the support services we spawned, it was the salaries for the government employees in the jobs we literally created,” SGMA Executive Director Richard A. Pierce said at the meeting.

“It was, more than anything else, the relief we gave to the cash-strapped local government that was reeling from the effects of the Asian economic crisis,” he added.

Mr. Pierce cited the recent SGMA study and the 1999 study by the Business Development Center of the Northern Marianas College funded by the U.S. Department of the Interior to support the findings.

He said the study found that the garment industry was the “biggest contributor to the CNMI economy and, without its revenue the economy would collapse.”

The survey polled 33 garment companies on the island in early 2000, although Mr. Pierce said there are now only 31 factories in operations with another one expected to close down soon.

There are about 17,500 people working directly in the local garment industry which is also responsible for at least 9,800 direct government and private sector jobs.

Mr. Pierce said the employment factor was calculated and derived from the NMC study.

Garment manufacturers recorded over $1 billion in sales in 1998, but the figure slid slightly to $940 million last year. Mr. Pierce said the industry projects another decrease for calendar year 2000, without elaborating.

The sector has come under fire in recent years from the Clinton administration and some U.S. lawmakers as well as human rights groups, largely due to its employment of about 13,000 guest workers.

A $1 billion class-action suit filed by a human rights group on behalf of the workers has claimed labor abuses and violations, a claim that Saipan manufacturers have denied although it has prompted U.S. retailers to cut their orders.

Despite the slip in total sales last year, the sector still accounted over a third of the total CNMI revenues of $210 million, pouring almost $80 million into the coffers such as $42 million in users fees and excise taxes.

About $62 million were spent by the industry on local businesses and individuals, most of which made on purchases of local food, gas, supplies, freight and transportation and employee housing rentals.

SGMA is expected to release the results to government officials later this week.