Chamber president wants more people to open businesses

Saipan Chamber of Commerce president Alex Sablan wants the people of the CNMI to take advantage of the next wave of economic activity brought by the recent influx of foreign investment by becoming entrepreneurs themselves.

Saipan Chamber of Commerce president Alex Sablan speaks before members and guests of the business organization’s Installation Dinner last Saturday at the Fiesta Resort and Spa Saipan’s Hibiscus Hall. (Mark Rabago)

Addressing Chamber members and guests during the organization’s Installation Dinner on Saturday, the CTSI Logistics executive prefaced his speech by saying that the islands’ future appears bright, referring to the casino project of Best Sunshine International Ltd., additional hotels from E-Land, Alter City Group, Honest Profit International Ltd., and Sunshine 100/Tan Holdings.

He, however, wants the people of the CNMI to also take the initiative by setting up businesses of their own that can become mini-drivers of the local economy in concert with Best Sunshines, E-Lands, Alter City Groups, Honest Profits, and Tan Holdings.

He said the Chamber continues to support and encourage those that qualify to work with the Commonwealth Development Authority and the islands’ banks to pursue lending through the Small Business Credit Initiative.

“…But what I speak of is modeling a resident lending program, possibly utilizing Marianas Public Land Trust or better yet local appropriations to mirror the former Economic Development Loan Fund initiative. I do not suggest mirroring the runaway EDLF lending for relatives, friends, apartment and commercial buildings but offering true, significant lending (and what I mean by significant is more than a $35,000 micro loan)…lending that takes into account a resident with a great business plan but has been turned down by all or most of our banking institutions because of a lack of collateral due to CNMI-wide depressed land values.”

He said there are many great business ideas out there but many residents do not qualify for a traditional bank loan due to a lack of good collateral.

“The EDLF fund of my father’s generation was created to lend to individuals that create a good business plan, that would employ residents and generate a revolving fund of lending as loans were repaid back into the fund. Generally, applicants qualified for EDLF lending when traditional bank lending was not available. I do not suggest lending for the sake of lending. This fund should have many strings attached, effective monitoring by the lending partner or a cohort of agencies such as CDA, the Department of Commerce Small Business Incubator, or even technical assistance grants from the Office of Insular Affairs, that could marshal up resources to support and advise the lender to success.”

Sablan hopes a renewed spirit of entrepreneurship in the CNMI would produce the next generation’s Jose and Daidai Tenorio, Herman and Maria Guerrero (Pan), Olympio and Carmen Borja, Jesus and Frances Yumul, and Joe and Marsha Ayuyu.

Another model the Chamber president wants replicated is how investment company Bridge Capital, LLC came to the CNMI.

“The principal owners, John Baldwin and Shawn Scott, viewed the CNMI as a great location to relocate from the U.S. Virgin Islands. Phillip Mendiola-Long and I met them in a David Cohen, Office of Insular Affairs-sponsored investor conference in Honolulu, Hawaii, and we touted the CNMI opportunity. David and Shawn came out saw the beauty of the Islands and decided this would be a perfect location in which to spring board to and from Asia, the U.S. mainland, and ultimately the CNMI to conduct their financing business. As you may know financial institutions like Bridge Capital, LLC provide middle- to high-income jobs, most of their employees pay higher than normal payroll taxes and more than likely can afford a higher standard of living, which may translate to a more discerning palate of consumables and commodities at the stores, medical services, private education, luxury vehicles, just to name a few items.”

Sablan said having three- to four-dozen financial institutions like Bridge Capital that delves in hedge funds, private equity, venture capital, growth capital, foundations and the like can improve the quality of life on the islands.

“Building an above-average to high income society of say 800 to 2,000 individuals through a relatively small financial industry in the CNMI could possibly translate to better job opportunities for our residents but also ultimately much better commodities, services, and education that not only cater to the employees of this industry but complement our society as a whole. The job opportunities in the CNMI will continue to be limited to service industry jobs if we do not look at other industries. We do not need to look far but to our neighbor island of Guahan [Guam] to establish what the limitations are in diversifying our economy.”

Sablan said the CNMI government will ultimately have to determine if offering incentives and aggressively marketing these incentives to lure financial institutions to the CNMI outweighs the overall benefit of building a financial industry, providing an opportunity for good jobs, a more educated workforce that brings people home after college, and a possible second leg to the local economy.

Sablan also championed the Economic Stimulus Plan, which variation was successful in luring Best Sunshine to the Commonwealth’s shores.

“…This is not anything new. In fact, we commend the members of the Lottery Commission and the then-chairman Sixto Igisomar in aggressively negotiating the establishment of specific terms and conditions the CNMI wanted from a casino operator and the negotiation process that led to the current agreement with Best Sunshine. This is exactly what this Chamber has suggested on numerous occasions utilizing the Investment Incentive Act of 2000. Whether we’d like to admit it or not, the CNMI must compete for viable investors amongst many other countries, provinces, states, cities, even counties. Incentives, more specifically tax incentives, are used globally to lure investors into a specific region. Like the CNMI Casino Gaming Act, the administration could develop a desired model for many of the different ideas pending in the Investment Incentive Act of 2000 and market these items on investment missions into Asia and the United States,” he said.