Local economy and land alienation

I would like o present my personal views on the rhetoric “Economy and Land Alienation.” I am referencing the Feb. 17, 2009, Marianas Variety headline “Ex-chief justice: NMI on verge of bankruptcy.” The ex-chief justice, Mr. Jose Dela Cruz said, “…the CNMI will soon be bankrupt unless the government changes the land alienation rule, which discourages potential investors from infusing fresh capital into the islands’ ailing tourism-based economy.”

I beg to defer with Mr. Dela Cruz’s argument that the CNMI’s land alienation law is one of the major factors in the CNMI government’s financial dilemma. Realistically, it is the doing of our elected officials’ insatiability, power play, and buddy-buddy approach that has brought the CNMI to this financial predicament. It is the elected officials’ famous hidden attitude we call in Chamorro “Guahu Finetnina.” We should be mindful that during the boom times of the late ’80s and early ’90s, the land alienation law has already been embedded in the CNMI Constitution. Investors flocked to the CNMI with positive investment attitude. They built hotels and other business. They were not discouraged by Article 12.

In my opinion, the driving factors that might cause the CNMI government to go bankrupt are:

1. Fact, the CNMI economy is tourism based. Japan Airlines pulled out from the CNMI in the mid-2000. Continental Airline followed suit last year. And Northwest Airlines is cutting back in March 2009. These tourism drivers are the major cause of the NMI government’s financial dilemma. Fewer tourists to the CNMI will mean lesser funds for the CNMI government.

2. Fact, the exodus of over $80 million by way of taxes from the garment factories will definitely have immense negative financial impact on the local government.

3. Fact, private and public entities have to embrace sustainability in these hard economic times. To stay afloat they have to cut corners that greatly affect employees. Taking away consumers’ buying power will mean fewer taxes to the government from businesses.

4. Fact, the high cost of fuel will have negative impact on the government’s finances.

5. Fact, the depressed local economy is driven by the global economy. There is nothing we can do to revive our economy unless the world economy is resolved. Foreign investors will only react positively to the economy when, and only when, the world economic situation is resolved. The CNMI government will continue to financially suffer.

To blame land alienation as the cause of a bankrupt CNMI government is pure fallacy.

It is my personal view that the above five reasons will cause the CNMI government to go bankrupt and not land alienation. And, of course, there is the Homeland Security issue to consider about potential investors from China and Korea and other countries. Homeland Security is beyond our control.

On the other hand, I must admit that I strongly agree with Mr. Dela Cruz that we should reconsider our flexibility in terms of land leases. But his suggestion of extending land leases from 40 years for public land and 55 years for private land to 75 to 99 years is not the answer. The concept is the same as lifting the land alienation law. I would recommend that flexibility of lease term should be and must be empowered to land owners. Landowners should make the decision to lease back completed years of the lease terms that have expired. Economically, extending leases to 75 to 99 years is not acceptable. Investors and landowners must continue to economically prosper.

The current 55-year land lease provision should continue to stay. The land lease flexibility should remain with the landowners. The government should not be making decisions for the landowners. If landowners want to lease back the completed lease term, then let them make that decision.

Lastly, we must embrace the land alienation rule, Article 12, of our Constitution. We must not compromise our land over money. Money is not our future, land is!
[B] Isidro Kani[/B] [I]As Matuis, Saipan[/I]