Cover Story
Getting Back on Track?
The Worst May Be Over in the Commonwealth of the Northern Marianas.
One of the most remarkable business success stories in the Pacific Islands can be found in the Commonwealth of the Northern Mariana Islands, a 14-volcanic island archipelago located on the northern fringe of Micronesia. A little more than 25 years ago, the Northern Mariana Islands ushered in a new era of political and economic self-reliance through a covenant with the United States; immigration and labor laws were controlled by the government to better develop the economy, but these have also opened a Pandora’s Box of scrutiny and condemnation.
The economy, most of which is derived from tourism and the garment industry, is a $2 billion juggernaut that has quintupled within the past 20 years alone. A quick glance at the classified ads in either of two Saipan- based newspapers shows a plethora of jobs, ranging from construction workers to office managers. The catch is that minimum wage in the private sector has been arbitrarily set at $3.05 per hour, creating, in the process, a disparate two-tier economic dynamic with the government workforce. According to the 2000 census, the commonwealth’s population has nearly doubled over the last decade, skyrocketing to 70,000; more than half were born outside the Northern Marianas, opting to enter as contract workers. “We just don’t have the population base to satisfy the labor demand, so we import labor,” said Jesse Palacios, acting director of the Department of Commerce in Saipan’s Capitol Hill. “Currently, there is a moratorium on non-U.S. citizens entering the Northern Marianas.”
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In recent years, the federal government has been critically assessing the labor situation in the Marianas. Over the past 18 months, working conditions of Chinese women in the garment factories have been the subject of federal lawsuits brought against some of the biggest names in the fashion industry. Although most of the suits have been settled, a 46-minute movie — “Worth the Risk: Behind the Labels” —produced by the cable and Internet network Oxygen Media (founded by media personality Oprah Winfrey) depicts continued human rights abuses and poor working conditions.
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In attempts to move forward — not just with labor issues, but also with the upcoming renegotiation of the covenant and the continued economic slump — commonwealth voters went to the polls in early November to cast their votes. Bad weather contributed to a low 78 percent turnout, but in the end, the Republican team of Juan N. Babauta and Diego T. Benavente defeated six other candidates in a hotly contested affair.
Babauta, a committed workaholic who was a three-term representative in Washington, hopes to make a few changes, including commonwealth-federal relations —changing the resident representative to a non-voting delegate position similar to Guam — doubling the average half million tourists who venture to the Marianas every year, altering perceptions about human rights and labor abuses, and securing increased “Compact impact” funds to reimburse the government for costs associated with the large influx of Micronesians since the 1980s.
“We want this administration to be as transparent as possible,” said governor’s assistant and former campaign manager, Adam Turner, at the Capitol Hill governor’s complex. “We hope to show a broader picture of what life is like in the Northern Marianas.”
Turner said Babauta’s administration is based on performance government that provides service, not jobs. This is good news for an economy badly whipped by the global economic slump. Although Business Gross Revenue Tax and amusement tax collections are expected to be $194 million this year — $35.6 million less than expected — there is a silver lining amidst the economic angst, and that is tourism.
The Marianas Visitors Authority has seen tourism numbers fall — 42 percent in the first quarter of 2002 compared to last year at the same time — but officials are upbeat about the August re-opening of the Tinian runway to serve the 410-room Tinian Dynasty Hotel & Casino, the return of Korean Air Lines, as well as new marketing approaches for niche travel, said MVA board member Roberta Guerrero.
“We know that tourism is what drives our economy,” she said. “We face the opportunity of being known globally as a ‘green’ destination. MVA has adopted a strategy that personalizes the message of rest and relaxation.”
Though MVA’s message is not lost on Japanese tourists who seek tropical havens, the Asian economic picture isn’t expected to get any clearer over the near term giving the commonwealth a tough hurdle to leap in its effort to boost its travel industry.
Photo: Bruce L. Campbell
