Economist: Buildup, tourism can coexist

Economist: Buildup, tourism can coexist

By Laura Matthews • Pacific Daily News • January 29, 2010

Guam's biggest export is its sunshine, and more than a million visitors travel here every year to enjoy what they lack in their cold climate -- beautiful beaches and tropical weather.

However, with the military buildup less than five years away, some are wondering if it will connect with a tourism industry that has been providing for the island for more than 40 years.

Claret Ruane, resident economist for the University of Guam's Pacific Center for Economic Initiatives, believes the two giants can live together.

"When you have more military here, their friends and families will be visiting from the mainland and that will be a resource for tourism," Ruane said. "And I am thinking not only can they coexist, but you can push forward for sustainable tourism -- ecotourism."

Speaking at the Fourth Annual Youth Summit at the Harvest Life Center in Barrigada yesterday, Ruane said because the purchasing power of people from the mainland is high, they will tend to splurge on the "expensive tourism product."

Ruane said her only problem is she wished the island had more tourism products to offer. She said everyone will need to take on a new outlook as the buildup approaches.

"Military buildup or not, we need to move the island forward," Ruane said. "We should have been a stronger economy to begin with and we have to start today to think about what it is we need to do. ... We can't turn everybody into the construction business and work the jobs ourselves. We should start thinking of new industries."

But there are some who feel the $15 billion buildup could be a pyrrhic victory.

"The bottom line is that it appears that economic impacts exceed economic benefits," said Anthony C, Blaz, administrator for the Guam Economic Development Authority.

The draft Environmental Impact Statement states that while the hotels will benefit "considerably" from the buildup, the general service sector could experience a period of hardship from losing labor to higher-paying jobs. It also says the pressure for increased wages could impair competition with inexpensive Asian destinations.

Furthermore, even though the government could get about $423 million more in tax revenue at the peak of the buildup in 2014 than it currently does, that would trickle to about $104 million more in 2017 than current government revenues. After 2014, the island could experience a recession-like period that could send some businesses packing or experience cutbacks and workers migrating because of job losses.

Cara Flores-Mays, a small business owner and a member of We Are Guahan, believes that the military buildup and tourism are incompatible. We Are Guahan is a group of concerned citizens who are reading the draft EIS and trying to simplify it for residents.

She said the dredging of the ocean and excess noise from the additional aircraft visits could have a negative impact.

The Department of Defense plans to widen an existing shipping channel to fit a carrier. Additionally, to create a turning basin near the wharf, about 2.3 million square feet of sea floor will be dredged.

About 35 percent of that area is covered in coral reef that will be permanently destroyed, the draft EIS states.

"We could basically lose markets to buildup construction that will cause chaos," Flores-Mays said. "We cannot rely on the military to be our savior. Prosperity for a few is greed if it's not prosperity for all."

Vice Speaker Benjamin Cruz, the chairman for the Committee on Tourism, said the only way the two opportunities can work for Guam is if the military doesn't insist that it has to destroy the reef, and build on other properties it has in the north.

"I'm almost ready to suggest to them to keep yourselves within your reservations," he said. "Don't destroy the island."