Cover Story
Guam on the Ropes
Continuing Economic Woes, Elections Highlight America's Most Affluent Territory.
At the Pacific crossroads of East and West, Guam has linked people and technology together for centuries, and benefited. The island is a classic Horatio Alger rags-to-riches story, rising from the ashes of World War II to become the cosmopolitan and financial center of the western Pacific. It has a Hawaiian suburbia-like feel to it, complimented by a distinct Micronesian flavor.
The road to prosperity begins in 1967. Five years after the naval security ban on Guam was lifted, Pan American Airways flew from Tokyo to Guam with a planeload of tourists. Nearly two generations later, more than one million visitors per year — 90 percent originating from Asia — flock to Guam’s shores for sun, sand, and surf. According to the 2001 Guam Comprehensive Economic Development Strategy, tourism is the island’s single largest economic sector, generating 60 percent of Guam’s annual business revenue. Guam has emerged as a world-class destination and, as a result, the island’s 165,000 residents enjoy the highest standard of living — as well as education and access to technology — in the insular Pacific.
- ADVERTISEMENT -
All that glitters is not gold, however. Beginning in 1997, Guam weathered a continuum of natural and man-made disasters: Super Typhoon Paka, an 8.2-magnitude earthquake, the Korean Air Lines crash, and an economic recession of gripping proportions that has forced an increased number of businesses to close their doors. Bank foreclosures, unemployment rates, and crime are at all-time highs.
 |
|
|
With Guam’s two main markets — East Asia and North America — struggling to emerge from their respective recessions as well as the aftermath of last year’s terrorist attacks, economists remain skeptical about a rebound. Largely a result of outside economic and social influences, Guam’s economy is teetering, perfect fodder for the colorful and oft-feisty November general elections.
Nine months down the road, more than 50,000 registered voters will head to the polls to elect a non-voting delegate to Congress, governor, and Legislature. “We’re going to be taking a closer look at the candidates,” said Cino Reyes, an undergraduate student at the University of Guam. “I want to know what they will do to get this economy going.” Although the Guam Election Commission won’t certify candidates until the July 9 deadline, speculation abounds as to who will seek office; campaigning won’t begin in earnest until September.
The only candidates to publicly announce a run for the gubernatorial seat as of press time are the Democrat team of Geri Gutierrez, wife of lame duck governor Carl T.C. Gutierrez, and Benny Paulino, current adjutant general of the Guam National Guard. Both have no formal political experience.
Expected to challenge the Gutierrez- Paulino ticket is Robert Underwood, five-term non-voting delegate to the U.S. Congress and Senator Tom Ada. Insiders say two-term Lt. Governor Madeleine Bordallo will run for the Washington post.
On the Republican ticket, a number of candidates — all current senators and career policy-makers in the Guam Legislature — are expected to run in the gubernatorial race, including the teams of Felix Camacho and Kaleo Moylan; current Guam Legislature Speaker Antonio Unpingco and Joanne Brown; and, Eddie Calvo and Lawrence Kasperbauer. Camacho ran unsuccessfully for the lieutenant governor’s position in 1998.
Whichever team winds up at Government House, they’ll inherit the daunting task to put the disjointed pieces of the island’s economic puzzle back together again. Two critical areas that need addressing, said Isabel Lujan, director of the beleaguered territorial Department of Commerce, include analyzing the early-out retirement program legislated by Senator Mark Forbes in 2000 and hiring a chief economist and planner. “The indiscriminate granting of the early retirement and voluntary separation incentives has created a vacuum in the resources necessary to generate comprehensive government statistics,” Lujan said at her cluttered Tiyan office. “Compounding the problem is the loss of impetus in collecting primary economic data needed to calculate Guam’s Gross Island Product.
“I can predict that any forthcoming plans to stimulate the economy will be temporary, short-term, and inadequately formulated because of the absence of benchmarks and fundamental measures of impact and progress,” she added. One figure is available, according to the Guam Economic Development Authority, and that is Guam’s total outstanding debt of more than $1.2 billion. Although Gutierrez has recently proposed to borrow $427 million on the bond market to help pay off the nearly $900 million Retirement Fund debt, legislators continue to debate the controversial issue. At issue is whether legislators can continue to borrow money. According to Section 11 of the Organic Act, “No public indebtedness of Guam shall be authorized or allowed in excess of 10 percent of the aggregate tax valuation of the property in Guam.” There has not been a real estate appraisal conducted since 1993, said Lujan, adding that it is impossible to calculate the debt ceiling without current data.
Even the once golden tourism industry has floundered — especially since the September 11 terrorist attacks on America — adding to the woes of unemployment and decreased revenue collections from the 10 percent hotel occupancy tax. The average occupancy continues to hover around 50 percent, though Guam Visitors Bureau and Guam Hotel & Restaurant officials expect a modest upward trend for the remainder of this year. The results of creative marketing strategies and promotions — the Guam Bare Card, for example, offers discounts of up to 65 percent to Japanese tourists at select business outlets — and official trips to Japan and Korea by tourism and government leaders in October 2001 have yet to be analyzed.
“As demand picks up, we only hope the airlines adjust accordingly,” said James Nelson, general manager of the Guam Visitors Bureau. “The return of Korean Air Lines, after a five-year hiatus, is a sign of a return to pre-9/11 levels, but we still have a lot more to do.”
Photo: Bruce L. Campbell
