You can’t correct a problem if you don’t see one, n’est-ce pas?

First of two parts

If young people are to remain at home on the islands with their families they must have satisfying employment opportunities—it’s as simple as that. In my judgment this should be the single, overriding goal of the government—well-paying jobs for local people within the private sector.

There are a lot of very astute people in the Commonwealth—most in the private sector—who know what the islands’ economic development problems are. Aside from the external factors that have had an adverse impact upon the economy in recent years, if one could sum up in a few words the internal factors and attitudes that have exacerbated the Commonwealth’s economic decline, one would have to conclude that several contributing factors are: apathy, indifference, and administrative and legislative paralysis—at least when it comes to working together in a cooperative manner. The Commonwealth appears to many to be a society in which local politics is apparently more important than economic recovery. No one seems to be in charge of efforts at economic renewal. Rather, action is often assigned to a task force composed of representatives from various departments of government and sometimes the private sector—task forces that are often given the responsibility to effect change and influence events but have the authority and funds to do so withheld.

Aside from those external forces over which the Commonwealth has no control—forces well known and which need not be repeated here—it is my opinion, and that of many others, that begrudging politics and the lack of cooperation between the executive and legislative branches cast doubt among many observers of the CNMI’s ability to exercise any meaningful measure of “self-government” when applied to solving economic and infrastructure problems in a timely and efficient manner.

This lack of cooperation between the two branches of government, which has certainly been witnessed by foreign investors, has no doubt influenced their decision in part as to whether to remain on the islands or not.

Additionally, the acceptance and condoning of nepotism is not seen for what it is—a breeding ground for mediocrity, incompetence and waste.

A few other observations follow:

No initiative, regardless of how worthwhile and beneficial to the community, economy, etc., will rarely be embraced by the opposing political party.

Many members of previous legislatures did not seem to know what the problems were or how to overcome them. Unfortunately, it also seemed they didn’t know that they didn’t know. Thomas Jefferson observed, “He who knows best knows how little he knows.” This basic insight was apparently lost on many.

Among some who have served in the legislature there appears to be have been little recognition of what investment capital really is—and from what it is derived. Investment capital is risk, venture money. Nothing in business is certain and one enters a venture (perhaps adventure is a better word) and takes the risk that the endeavor will be successful and that the investor will be rewarded. The reward for taking the risk is the profit earned. The money that is put at risk is itself a product of thrift, prudence, planning, management and, in some cases, sacrifice. It is extremely rare for such money to flow into areas where these traits are not respected. It is quite another matter, however, in an area that has yet to establish its long-term record of stability in dealing in a positive way with foreign investment, with the result that a degree of uncertainty is likely to be present.

Both domestic and foreign investment abhor uncertainty resulting from frequent changes in laws and regulations such as those that have occurred in the Commonwealth in recent years.

Many existing businesses and potential investors view the islands’ “business climate” as unstable. Judging from the many laws and regulations that have been enacted intended to govern business activity, a great many were later found to have been ill considered after the unintended, unanticipated consequences came to light which often required amendments to the original laws or regulations and sometimes—even amendments to amendments. It was a simple case of people passing laws who had little or no experience in business and thus were unaware of the needs of private enterprise.

It must appear to some potential investors that too many of the Commonwealth’s regulatory agencies have conflicting agendas, each with an abundance of time-consuming and expensive compliance procedures. Little appreciation is exhibited for the needs and requirements for increased economic growth and the private financial agents that can bring it about. There is no overall comprehensive plan to direct future private investment. No specific investment priorities or business preferences have been established.

Also sometimes there appears to be a lack of appreciation on the part of the federal government and the bureaucracy to the extent that many U.S. laws and regulations passed to govern and administer a confederation of states—of which all but two are contiguous within a continental land mass—many of which are too often applied, part and parcel, to several politically affiliated appendages in the Western Hemisphere when they are not always appropriate for transfer without modification to small islands on the other side of the world in the Eastern Hemisphere.

The Chamorro and Carolinian people should decide the level of development they find tolerable for their islands and the type and extent of foreign investment they find acceptable. This has never been articulated to my knowledge.

I’m reminded of an article that appeared in a local newspaper on April 13, 2001 where a prominent indigenous journalist lamented the attitude of some islanders who (and I paraphrase) appear to have been adversely influenced by “protectionist policies” of the local legislature which, according to the writer, fueled the poison of “disdain or hatred” toward those not of the island who had nevertheless established themselves in the Marianas.

At the time this was certainly a revealing statement offering an unusual and candid degree of insight from one who presumably had the pulse of many local islanders in the community who harbor such an attitude. The writer stated: “Our ill-conceived protectionist policies have done nothing but fuel the venom of disdain or hatred for foreigners who mean well and have openly established themselves here to partake in the growth of these isles. “As much as I’d like to see locals partake in the spirit of entrepreneurship, only a few are willing to take risks in the provision of goods and services.”

To be continued.

(Editor’s Note: The author, an economist, was formerly associated with the U.S. State Department’s program to implement President Kennedy’s foreign policy of assisting the emerging nations of the ’60s in Africa and Asia with their respective economic development efforts. He is a 35-year observer of the NMI economy, having served as senior economist for the Trust Territory Government and the CNMI government.)