CNMI Faces Federal "Typhoon"

CNMI faces federal 'typhoon'
Cohen: Loss of labor, immigration control likely
By David V. Crisostomo
Pacific Sunday News
dcrisostomo@guampdn.com

A top Interior Department official, who spoke before the Saipan Chamber of Commerce Friday, warned that a federal "typhoon" is barreling toward the Commonwealth of the Northern Mariana Islands and that its impact likely will strip the local government's controls on wages and immigration.

"'Federalization' of the CNMI is almost certain to occur in the near future," said Interior's Deputy Assistant Secretary for Insular Affairs David Cohen, as he gave his remarks before the Saipan Chamber of Commerce installation dinner, which was also attended by members of the Guam Chamber of Commerce, federal officials and military leaders.

Cohen stressed that the CNMI faces its toughest challenges yet and that each member of its community will be affected.

"If any portion of this community is at risk, then everyone is at risk," Cohen said. "You are all in the same boat, and if that boat sinks, then everyone drowns."
Cohen said under a worst-case scenario "the transformation of this society will be abrupt and painful."

"I'm sorry to say that in my opinion, the worst-case scenario is much more likely in this case than the worst-case scenario usually is," he said. "Can there be federalization without strangulation? I'm afraid that we may soon find out."


Garment industry

Cohen said the federal "typhoon" comes at a time when the territory's two main industries -- tourism and the garment industry -- are reeling. The garment industry, he said, is "on its way out anyway."

"One does not have to be a fan of the Saipan garment industry to recognize the danger of its abrupt departure," Cohen said.

"The garment industry has in recent years accounted for about 35 percent of the local government's revenues," he added. "Could the local government absorb the rapid loss of such a large portion of its revenues and still protect the health, safety and welfare of its people? Could the economy survive an immediate exit of the garment industry at a time when the other pillar of the economy, the tourism industry, is also reeling? I'm afraid that we may soon find out."

Cohen said while the absence of the garment industry will be good for the CNMI in the long run, the territory must first survive the short run.

"Left to its own devices, the steady downsizing of the garment industry had been dragging the CNMI's economy down to a hard landing," Cohen said. "Pushing the industry out the door may result in a crash landing. Unfortunately, there is no soft landing in sight--but it is easier to survive a hard landing than a crash landing."


Details

Cohen provided the following details:

Wages: The federalization of the CNMI minimum wage is "on an extremely fast track."
"It is woven into the bill to increase the federal minimum wage to $7.25. Under the Democrats' proposal, the CNMI minimum wage will increase from $3.05 to $7.25 over a four-year period, jumping $1.50 in the first year alone," he said. "This could very likely result in a complete and immediate exodus of what's left of Saipan's garment industry."


Immigration: Congress has expressed an interest in moving immigration control in the CNMI to the federal government. Cohen said the timing and terms of any immigration federalization legislation is not clear.

"What I do know is that the U.S. Senate has given my office a lengthy homework assignment -- 24 complex questions about the labor and immigration in the CNMI, due January 26," he said. "A hearing is likely to follow shortly thereafter. To state the obvious, federalization of immigration could also have a profound impact on the CNMI economy."


Representation in Washington: Cohen urged CNMI leaders to push Congress for a delegate seat to the U.S. House of Representatives, but cautioned that such an effort requires a unified community speaking with one voice.

"For a community this small, Washington simply will not take the time to decipher many voices speaking in cacophony. That's why it's so important to transcend the divisions that exist in this community to find the common ground," he said.


Uncertainty

Cohen said uncertainty lies ahead for the CNMI community and its survival will depend on what it does next.

"There's nothing you can do to control a real typhoon," Cohen said. "But there may still be hope that your actions can protect you from the typhoon of my analogy. Regardless of what happens, a concerted effort that brings this community together can only be a good thing. You should at least make the effort. You have nothing to lose, everything to gain and your community to save."