Teno upbeat on business confidence

Gov. Pedro P. Tenorio yesterday expressed relief over what appears to be strong indications that business confidence in the Northern Marianas is beginning to build up following years of economic upheavals.

Mr. Tenorio aired his optimism over the turnaround of the NMI economy before bankers and finance managers during the opening of the Bank of Federated States of Micronesia’s branch in Susupe, Saipan yesterday morning.

“It is our hope that your decision to expand here is a sign of your confidence in the CNMI economy. Here in the Commonwealth, we are working on a number of initiatives that are significant to our financial standing,” the governor told officials of the BFSM.

“We are in the process of spending more money on Capital Improvement Projects than at any other time in our history. We are also hoping more of our people get into their own homes for the first time, and we are working on attracting new investments to our islands,” he added.

Mr. Tenorio said the commercial and consumer loans that will be initially offered by the banking institution is expected to increase business activities in the Northern Marianas since these would mean fresh capital flowing into the local economy.

Government records disclosed the finance department approved the application for permits to operate of about 2,187 businesses throughout the CNMI from April to June 2000, up from the previous quarter’s 1,695 licenses.

However, commerce officials were quick to point out that the increase in the number of business permits issued does not necessarily mean that there has been a corresponding growth in the number of existing establishments throughout the island.

Analysts said this only reveals that the magnitude of ailing businesses have started to drop, indicating a significant reduction in the average number of establishments that are closing down because of economic upheavals.

According to the Commonwealth Development Authority, the number of businesses on the islands dropped by as much as 32 percent in 1997 to 3,800 from about 6,000 in 1996.

The CNMI economy suffered yet another blow in 1998 when the number of existing establishments fell by an additional 10 percent, which totaled only around 3,410 businesses.

Of all existing industries in the Northern Marianas, only the apparel manufacturing sector registered growth of a whooping 22.2 percent between fiscal years 1997 and 1998.

Revenue reductions in the same period ranged from a mere two percent in the shipping sector to over 50 percent in agriculture and fisheries, professional services and the fuel retail industry.

At least 812 establishments in the Northern Marianas did not renew their business licenses last year. A report obtained from the Business Licensing Section of the finance department noted that out of 3,410 businesses in 1998, 812 establishments opted not to renew their licenses by end-December 1999.

However, the Central Statistics Division of the commerce department disclosed that 2,775 new business permits were issued by the Business License Section last year, exceeding the number of establishments that did not renew licenses.

Overall, the government’s business licensing office processed and approved 3,587 business permits last year which represented a trivial growth of 0.05 percent from the year-ago’s 3,410.