NMI keeps close watch of Asian economies

As economic uncertainties cloud major countries in Asia from which the CNMI source its biggest tourism markets, business analysts are predicting yet another year of slow business activities for the Northern Marianas.

In preparation to the anticipated persistence of low economic output this year, the Commonwealth Development Authority has started taking aggressive measures to assist local entrepreneurs weather dwindling business turnout due to weaker consumer confidence.

Business experts at the development authority have been mobilized to conduct counseling sessions with the agency’s clients who may be in search for ways to survive the economic contraction, thereby, continue paying their loans from the CDA.

Aside from loan restructuring, CDA Board Chair John S. Tenorio said the agency is also exploring other ways to help local businesses, especially those with outstanding loans from the government, make it through the financial upheavals on the island.

The move has been taken to also reduce the increasing number of unpaid and overdue loans which have already caused concern among CDA officials. Current delinquency rate was reported to have exceeded the 20-percent mark by end-December 2000.

Mr. Tenorio earlier bared plans to require borrowers to undergo loan counseling if only to make sure they will not remiss on their monthly payment obligations once their credit applications are approved.

He said completion of a series of loan counseling sessions is one of the new requirements being looked at by the government’s lending arm in its efforts to address problems on swelling delinquency rate.

The move may also be taken to untangle numerous loan applications now pending before the development authority because of the ever growing demand for fresh money by the business sector due to economic slowdown.

At the same time, Mr. Tenorio said a lot of investors are in a “wait-and-see” attitude over the uncertainties created by the enduring financial crisis, while predicting that some investments that will be frozen at this point might be expanded when economic stability is achieved.

The region’s economic debacle occurred because Asian firms were generally unprepared to cope with the region’s headlong economic advance and the effects of globalization.

A critical imperative to survival amid the crisis is liquidity since traditional funding sources are running dry due to the unfavorable investment climate.

Companies that emerge from the crisis should be primed to compete on global terms and to benchmark their performance in accordance with the international standards.

Predicting a change in the behavior of managers in the aftermath of the economic crunch, Mr. Tenorio said future managers will need to be sober, hands-on, and focused on the businesses they own or manage.

“And since expectations play such an extremely powerful role in the behavior of markets, the challenge for governments and corporations is to acknowledge the presence of expectations and accept the current volatile reality,” he said.