GAO: NMI economy would take a hit

The investigative arm of the U.S. Congress believes the CNMI’s economy would take a huge hit if all foreign workers are removed from the labor market.

David Gootnick, International Affairs and Trade director of the U.S. Government Accountability Office, said in his testimony read in last week’s U.S. Senate Energy and Natural Resources committee hearing that foreign workers under the CNMI-Only Transitional Nonimmigrant Worker visa or CW1 program comprised 45 percent of the CNMI’s labor force in 2015.

“GAO’s preliminary economic analysis projects a 26- to 62-percent reduction in the CNMI’s 2015 gross domestic product—[based on] the most recent GDP [data] available,” said Gootnick.

Committee chair Sen. Lisa Murkowski (R-Alaska) presided over the hearing, which was held in connection with House Resolution 339 or the NMI Economic Expansion Act introduced by Delegate Gregorio Kilili C. Sablan (D-MP).

At 3.5 percent, the CNMI’s GDP showed a 0.7-percent increase in 2015, from 2.8 in 2014, making it the fourth straight year the Commonwealth’s economy increased after years of slump that included a -17.5 percent performance in 2009.

The CNMI’s GDP has also jumped by $86 million in 2015. The numbers are expected to show positive signs as soon as the U.S. Bureau of Economic Analysis releases its latest compiled data for last year.

New investments, like the construction of the casino-hotel Imperial Pacific Resort, contributed to that renewed economic activity, along with a continued increase in tourist arrivals from China and Korea.

Gootnick said demand for foreign workers surpassed the available slots for the CW1 program’s numerical limit, with many of those approved being Chinese nationals, especially those in the construction positions. The CW-1 numerical limit was reached early in fiscal years 2016 and 2017.

“The construction of a new casino in Saipan is a key factor in this demand. Meanwhile, by 2019, plans for additional hotels, casinos, and other projects estimate needing thousands of new employees,” said Gootnick.

“When the CW-1 permit programs ends in 2019, GAO’s preliminary analysis of available data shows that the unemployed domestic workforce is estimated at 2,386 in 2016. [It] will be well below the CNMI’s expected demand for labor.”

He added that one solution is for CNMI employers and other businesses to hire or recruit U.S.-eligible workers from other U.S. states and territories, or from freely associated states like the Federated States of Micronesia, the Marshall Islands, and Palau.

Another solution GAO sees is the recommendation made by the U.S. Department of the Interior in April 2010 for Congress to consider new legislation that would give permanent residency or improved status to foreign workers who have lawfully resided in the CNMI for a minimum of five years.

The same recommendation was included in the 902 report that was submitted by both the CNMI and federal government panels after last year’s series of 902 Talks.

The Interior Department estimates 15,816 individuals would qualify to apply for long-term resident status under the Immigration and Nationality Act.

The options Congress could consider were U.S. citizenship, permanent resident status leading to U.S. citizenship (per the normal provisions of INA relating to naturalization), with the five-year minimum residence spent anywhere in the U.S. or its territories, or permanent resident status leading to U.S. citizenship with the five-year minimum residence spent in the CNMI.

GAO is the investigative arm of Congress that is charged with examining matters relating to the receipt and payment of public funds.