Thursday, April 02, 2009

Marianas Buildup, Not Guam Buildup

'Marianas buildup, not Guam military buildup'
By Haidee V. Eugenio
Saipan Tribune
April 3, 2009

Guam Lt. Gov. Michael Cruz yesterday said he and Gov. Felix P. Camacho propose to rename what has long been known as the Guam military buildup to “Marianas buildup,” and both look to forming a regional economic task force to tap a projected $2 billion to $4 billion in annual defense-related contracts associated with the influx of military personnel on Guam.

Cruz was the keynote speaker at yesterday's opening of the two-day 2009 Economic Restoration Summit, which drew over a hundred businessmen and government officials from the CNMI and Guam.

He talked about the growing need for a regional approach to the economic challenges faced by the Marianas.

“I firmly believe that Guam's strategic value would diminish if not for the assets of the CNMI. The complexity of current military operations and the security requirements which accompany them cannot be resolved by one island alone,” Cruz told participants in the summit held at the Fiesta Resort and Spa in Garapan.


In his remarks, Cruz said he and Camacho propose a regional program in which the CNMI government will share experts with Guam for up to four years, with taxes paid to the Commonwealth to ensure critical government services.

Cruz said the next four years will increase Guam's need for tax enforcement officers, building inspectors, environmental health inspectors, policy specialists and public safety officers.

Although Guam will train its people to meet the increased demand, the number of needed positions requires that it finds other sources such as the CNMI.

“If the CNMI has an excess of these officials, we believe our governments can engage in a program of shared expertise during the peak years of the buildup,” he said.

The program, according to Cruz, would allow the region to share in Guam's future prosperity and by giving jobs to people.


CNMI Gov. Benigno R. Fitial, in his welcoming remarks, recognized the military buildup and the federal stimulus funding as opportunities for the islands.

The summit identified agriculture, aquaculture, edu-tourism and call centers as alternative industries for the CNMI, and brought together experts, entrepreneurs, lawmakers and other policymakers to help develop these industries.

Results of the summit will be presented at the U.S. Department of the Interior-sponsored Business Opportunities in the Islands Conference in Hawaii from April 6 to 8.

In an interview, Cruz recognized the CNMI's growing interest in agriculture and aquaculture which on Guam, “unfortunately, is sort of a dying industry because of multiple concerns, and the increasing price of land.”

Reducing the cost of shipping goods from the CNMI to Guam, he said, is a key area of cooperation.

“Gov. Felix Camacho has been very strong about ensuring the region benefits from the prosperity that Guam is going to see. A healthy region is a healthy Guam, and a healthy Guam should mean a healthy region,” Cruz said.

He added that the Marianas buildup recognizes the various impacts the military relocation will have on the islands, which need to work collaboratively to share in the success coming their way.

“This region must deal with a higher military profile, a large population influx, and a severe lack of skilled labor. If we do not meet our challenges together, we will be divided by them.” he added.

To implement this concept, Cruz and Camacho propose the creation of a regional economic task force that will use the Marianas buildup as the initial engine to address the region's economic concerns.

The proposed economic task force is seen to explore continued collaboration on the guest worker program to ensure new federal regulations address the region's shared concerns.

Accompanying Cruz on Saipan for the summit was his chief of staff, Carlotta De Leon Guerrero, a former TV anchor on Saipan.


Businesses in the CNMI and Guam experience significant difficulty identifying federal contracts and obtaining them, according to Cruz.

While companies with Guam addresses transacted approximately $250 million with the federal government last year, only less than 10 percent of the companies in Guam actually performed the work, he said.

“With a projected $2 billion to $4 billion per year in defense-related contracts associated with the buildup, companies throughout Guam, the CNMI and Micronesia must participate in these good times, especially after we survived the hard times,” said Cruz.

Over the next four years, Guam's population is expected to grow by 28 to 30 percent-the equivalent of some 22 years of population growth occurring in less than a third of that time.

Cruz said the government of Guam is spearheading efforts to prepare for the buildup, but these efforts are not for the military alone.

A dramatic increase in the population requires an upgrade to public services such as health, education, public safety, cultural preservation and economic development.

No easy solutions

Fitial, in his welcoming remarks at the summit, said it's not an easy task to develop promising new industries because of a dramatic change in the economic environment.

For example, the CNMI no longer holds its traditional competitive advantages such as local control of minimum wage rates, local control of immigration, and duty-free access to U.S. markets via Headnote 3(a) provision.

There may be no easy solutions, he said, but the Economic Restoration Summit represents a “good, healthy starting point.”

Fitial thanked former Supreme Court chief justice Jose S. Dela Cruz and others for publicly calling for an economic summit to discuss the CNMI's problems. He also thanked Commerce Secretary Michael Ada for organizing the summit along with other public and private sector agencies such as CDA, Northern Marianas College, and IT&E.

The well organized summit, co-sponsored by the Department of Commerce and the Commonwealth Development Authority, identified agriculture, aquaculture, edu-tourism and call centers as alternative industries for the CNMI.

Commerce Secretary Ada presented the Commonwealth Economic Development Strategy, which serves as a master plan for the CNMI's economic development. Among the priority projects involve the Commonwealth Utilities Corp., inter-island super ferry, alternative energy, and housing. Ada also provided an update on CNMI efforts to tap into the American Recovery and Reinvestment Act, or the federal stimulus package.

Dr. Arthur L. Smith, president of consulting firm Management Analysis Inc., said with half-a-billion dollar in proposed projects, the cost of which is more than three times the CNMI's annual budget, there is increased opportunity for public-private partnership.

He cited as examples the CUC power plant 1, Garapan Elementary School, Garapan redevelopment, Pinatang Beach Park, alternative energy and international sports complex as areas in which public-private partnership can benefit the CNMI.

Sergio Loya, project manager of MAI, presented the results of discussions on aquaculture, agriculture and edu-tourism. Each was followed by presentations of experts and entrepreneurs, including Dr. Shaun Moss of the Oceanic Institute who talked about aquaculture; businessman Tony Pellegrino, who talked about agriculture; and Wayne Pangelinan, who talked about edu-tourism.

The summit was broadcast through video teleconference to Rota and Tinian participants, who were also able to ask the presenters questions.

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