The CNMI's fascinating history is largely unknown to many otherwise
knowledgeable people in the United States and elsewhere. The islands'
history in many instances is far more interesting and intriguing that the
history of some states in the Union as the islands have played a
significantly more prominent role in world affairs and geopolitics than
their size and resources would seem to indicate.
    The islands’ history has been both rich and tragic. The Mariana Islands
(Guam, Rota, Tinian and Saipan) are the only areas under the United States
flag to experience total devastation as a result of the Pacific war. They
are also frequently subjected to the destructive force and rage of
unpredictable typhoons, sometimes with a wind force exceeding 150 miles per
hour and they are situated within the Pacific’s volcanic rim of fire.
   Little is known of the early prehistoric settlers of the islands. It is
believed that they originated somewhere to  the west and  south  of what is
now the Mariana Islands. The first European contact occurred in 1521 when
Ferdinand Magellan made his landfall at Guam. In 1668 a Catholic mission
was established and the islands were named after Maria Anna of Austria the
widow of Spain's Philip IV - thus the name Mariana. By 1815 a new wave of
immigrants visited the islands from low-lying  atolls in the Carolines
southeast of the  Northern Marianas.
   In  1898 as a result of war between the United States and Spain, a near
bankrupt Spanish government sold the 14 islands north of Guam, (the
Northern  Marianas) to Germany. This occurred after the United States had
taken control of Guam, largest and most southern of the  islands, as a
result of the Spanish American War.
   The new German administration encouraged the development of agriculture
and  fisheries  as  well as the  immigration  of foreigners. By 1905
Japanese immigrants had so established themselves in the islands that they
controlled 90 percent of all trade. In 1914 with the advent of World War
One, Japan moved against the German possessions in the Pacific and forced
the German administration out - expelling all citizens of Deutschland.
   Following  the conclusion of hostilities in Europe and upon the
creation  of  the League of Nations and the subsequent stripping of Germany
of all her overseas colonial  possessions, Japan succeeded  in  being
confirmed as administrator of the islands receiving a Class C Mandate from
the League in 1921 over all of  Micronesia  (except the U.S.  Territory of
Guam).  While this move was made over the objection of the United States,
which was not  a member of the League, Japan successfully legitimatized its
entry and control over 3 million square miles of the western Pacific an
area as large as the continental United States.  While not known at the
time, the requisition of  these "dry-land"  assets  by the Japanese in a
vast universe  of  water would be  the  scene  of  bitter   hostilities
in  less  than  a generation.
   Japanese nationals moved to the Northern  Marianas with intense interest
in the cultivation of crops and the development of fishing and sugar
enterprises. As tension increased between the United States and  Japan, the
latter  withdrew from the League and by doing so unilaterally terminated
the Mandate, which had forbidden militarization and fortification  of  the
islands. Japan closed  the  islands and prepared for war.
    America's entry into the Pacific war occurred on December 7, 1941 when
military installations in Hawaii were attacked  by Japanese  carrier based
forces. For the next 30 months fighting continued in various locations in
the Pacific with U.S. forces eventually attacking and neutralizing Japan's
Micronesian Mandate within the central Pacific.  For Saipan and Tinian this
island hopping strategy culminated in the invasion of June 15, 1944. The
island’s sandy beaches and mountainous terrain were the scene of one of
World War Two's bloodiest battles. After the island's were secured by
American military forces, airfields were constructed from which long-range
B-29 aircraft attacked  the Japanese home islands. In 1945 the airfields on
Tinian were the busiest in the world. It was from one such airfield  that
the Superfortress Enola Gay was based and from which the first atomic  bomb
was launched for detonation over Hiroshima in August 1945 thereby hastening
the end of the war. As a little known footnote to history the last
surrender of World War II took place in the Northern Marianas on Anatahan
Island north of Saipan when a group of Japanese holdouts finally surrender
in 1952. In 1945 the United Nations was organized as a successor to the
League of Nations  and two years later the islands were placed under the
purview of the Security Council with the United States appointed as
administrator. The United States accepted the obligation to develop the
area economically, socially, and politically for eventual self-government.
This three million square mile area consisting of the Marshall Islands,
Eastern and Western Carolines, and the Northern  Marianas  became  known as
the Trust Territory of  the Pacific Islands and was administered first by
the United States Navy and later by the U.S. Department of the Interior.
     Japanese facilities in the Northern Marianas had been totally
destroyed and the infrastructure which remained in place was falling into
disrepair from lack of maintenance. Dense jungle growth quickly reclaimed
much of the landscape previously cleared for sugar cane which had been a
subsidized activity during the Japanese period.
       At that time to even think of a hospitality industry based on
Japanese tourists was an unimaginable dream. The economy was as listless as
the doldrums which frequent the islands. Cold war tensions of the period
resulted in the United States Navy virtually closing off the Marianas to
all but the military and the indigenous population. This situation
prevailed until the late fifties and early sixties.  At that time there was
actually very little potential for development and, more important, the
population of some 6,300 people were too few to undertake the process to
any significant degree. These were the days before widespread use of
commercial jet aircraft when travel from Hawaii to these isolated islands
required many exhausting hours. In the early fifties a flight from Honolulu
to Wake Island required about nine and one half hours from Wake to Saipan
was still eight hours further. In those days Japan was occupied  by the
United States Armed Forces. The country was concerned with its own
reconstruction and had little interest in its former mandated islands.
      The Northern Marianas' economy was to languish undeveloped for an
entire generation, some 33 years, following the conclusion of the Pacific
war. First, as a result of sheer exhaustion and despondence and later
(until 1973) as a result of American policy exercised on the basis of the
''most favored nation" clause within Article 8 (1) of the Trusteeship
Agreement For The Former Japanese Mandated Islands. From 1947 until 1973
this policy to prohibit non American investment was referred to as the
"denial principle."  The United States Government was not particularly
interested in the islands except for Saipan and its training base for
Central Intelligence Agency covert operations for the Naval Technical
Training Unit (an area now known as Capitol Hill) and did not wish to
encourage investment from the nationals of other countries. The
administering authority interpreted Article 8 (1) in such a manner to be an
effective tool to prohibit foreign investment.  This policy  precluded
Japan from re-establishing itself in the Marianas and the other islands of
Micronesia which were administered under the Trusteeship Agreement. It was
largely through the efforts of  the Saipan Chamber of Commerce at a meeting
held at the Royal Taga Hotel in December, 1972 that the United States was
convinced of the need to relax its policy and open the islands to foreign
investment.
       Once the United States changed its policy toward outside investors
there was still a strong desire by a somewhat xenophobic  Congress of
Micronesia to continue to control the introduction of foreign capital into
the islands. This body, in which the Marianas District was represented, had
enacted a rather stringent and restrictive Foreign Investor's Business
Permit Act in 1970. This law remained in force in the Northern Marianas
until 1983 when it was repealed. The door was opened to investment from all
nations with few controls to regulate outside capital.
   On still another front, negotiations  for  self-government  and  the
eventual termination of the United Nation's Trusteeship Agreement with the
United States first began in the late sixties. Today’s unique relationship
between the United States Government and the Commonwealth stems  from the
fact that the islands were never recognized as a permanent possession of
any nation since they were taken from defeated Germany by the Allied Powers
during World War One. Subsequently assigned to Japan under a mandate from
the League of Nations, the islands' status did not change after they were
occupied  by  United States armed forces in 1944. Indeed, since their
purchase by Germany from Spain in 1899, and their  assignment to Japan for
administration in 1920 by the League of Nations, the Northern Marianas had
no political identity among the countries of the world. From the time of
Germany's loss of the islands they were never regarded as a permanent
colony within the exclusive sovereignty of any nation, except, of course,
by Japan when it left the League  before the outbreak of World War Two.
       At the conclusion of the Second World War the United States, not
desiring to appear as having annexed the islands by virtue of "victor's
rights", placed the islands under the supervision of the Security Council
of the  newly formed United Nations. As the Marianas where considered to be
within a strategic area of the western Pacific they were to be overseen
through the Security Council where the United States had veto power, rather
than  the U.N. General Assembly. The people of the Marianas were encouraged
to choose their future political status from several options. These
included: maintaining the status quo and remaining a Trust Territory;
selecting independence; or becoming  affiliated with the United States,
either through a relationship of free association or a commonwealth status
based upon a negotiated agreement which later became known as the Covenant.
The Covenant describes the relationship agreed upon between the people of
the Northern Marianas and the United States Government.
       No other United States territory or insular possession has a similar
relationship. Alaska, Hawaii, Puerto Rico, the Virgin Islands, American
Samoa, Guam and other Pacific possessions were all acquired under
circumstances far different than that of the Northern Marianas.
       For a nation to acquire additional territory, a government must
either annex an area by force of arms or by purchase from a sovereign
government.The Northern Marianas was not a permanent legal possession of
Japan at the time of the war  as it had only been entrusted to Japan under
a mandate by a group of countries through their organization - the League
of Nations. Therefore, the United States could not strip territory from
defeated Japan at the conclusion of hostilities since the islands were
never recognized as a permanent legal possession of Japan in the first
place.
      In June 1975 a plebiscite was held in which 78.8 percent of the votes
cast by the people of the Northern Marianas indicated agreement in
accepting a negotiated Covenant with the United States. In January 1978
the  Northern Marianas  became  self-governing under the terms of the
Covenant and the area's first elected governor assumed office. On May 28,
1986 the United Nation's Trusteeship Council determined that the United
States had  satisfactorily met its  obligations  to  the islands  and on
November 4, 1986 United States citizenship was conferred upon those people
in the Northern Marianas that met the necessary qualifications. From that
point to the  present  the area  experienced rapid economic growth.
  The above date  may  be  considered  the point of  "takeoff"  for  the
Commonwealth economy, the growth of which was stimulated by three
principal   factors,  namely,  the  stability  assured  by  an affiliation
with the United States; the opening of air service to Japan; and the
abandonment of restrictions on foreign investment, particularly in tourist
related enterprises. This pace was accelerated greatly in l986 as a result
of the Plaza Accords and the "Group of Seven's" policy to devalue the
dollar in relation to the yen, which made Japan a financial superpower
overnight and gave Japanese investors a half-price sale on "dollar-valued"
real estate assets.  This led to a tremendous inflow of Japanese investment
into the islands, forcing land values to skyrocket and increasing the cost
of living.
    It is at this point that one is struck by a strange irony - United
States Government expenditures within the Northern Marianas aside - large
private American investment is somewhat conspicuous by its absence in the
islands.  It is something of a paradox that it has been largely private
capital from a defeated former adversary rather than the wealth from the
victor that has resulted in the reconstruction of Saipan's economy.
Considering that the Japanese presence in the islands extended for a period
of 30 years, as compared to almost one half century for that of America, it
is somewhat surprising that the geographic and economic ties between the
islands and Japan were reforged in the seventies. It is also interesting to
note that the Philippines and the Mariana Islands, located as they are in
the eastern hemisphere, are culturally oriented to the western hemisphere.
As a predominately Catholic area, colonized first by the western nations of
Spain and later Germany, the Northern Mariana Islands were under the
influence of the eastern hemispheric nation of Japan for only two and one
half decades, after which they were administered by the United States. By
contrast there is no culturally oriented eastern hemispheric nation
situated in the western hemisphere.
     On any given day in the Commonwealth, there are more Japanese present
than non-indigenous, native born Americans. It must be said, however, that
it is the stability assured by the American flag and the U.S. rule of law
that has provided a safe business environment for Japanese and other
foreign investment to flourish in the islands. Situated in a universe of
water, the islands within the Marianas archipelago are the farthest stars
out in the American galaxy.
     During the Trust Territory period and into the early years of the
Commonwealth  before the “boom” years of the eighties Saipan had only a
single local bank consisting of 4,016 accounts with aggregate savings of
$562,000.  In 1970 the private sector consisted of 55 licensed business
firms with total assets  estimated at slightly less than $2 million. Only
957 privately owned vehicles were registered.  The single credit union had
a membership of 277 with total assets of $19,700. The 1,056 employed
indigenous workers in the Marianas had wages that totaled $1.5 million
annually and the population stood at 11,340 people.The Trust Territory
Government, with it's large expatriate payroll, was the major employer.
There was no foreign investment in any substantial amount.
       By the late summer of 1970 the islands were almost devoid of the
amenities of the last quarter of the twentieth century. There was one black
and white television channel available operating only a few hours each
evening; there were only three food stores of any size with a very limited
inventory; one cargo vessel a month called at the port. The airport was an
open-air tin shack with one aircraft a day. Since the airstrip was not
lighted and had no navigational aids, aircraft had to overfly the strip at
a low altitude prior to landing to check the wind direction and to frighten
stray dogs and cattle from the landing strip. There were no recreational
craft in the lagoon except for a single glass bottom boat operated by a
Palauan. There were only two hotels, the 73 room Royal Taga Hotel where the
elegant Diamond Hotel now stands in Susupe and the Hafa Adai Hotel in
Garapan which consisted of ten plywood bungalows each slightly larger than
a shipping container.  The number of island restaurants could be counted
on  one hand. There were very few automobiles on the island and those
consisted mostly of second hand, rusted pick-ups. The Fire Department had a
single red jeep with a garden hose and there was only one stop sign on
Saipan's roadways at the entrance to the Royal Taga Hotel. To make an
overseas telephone call one had to drive to the RCA office in Susupe and
make the call from a booth.The economy was minuscule. In those days a
Japanese visitor could only convert yen equivalent to $743. for trips
outside Japan. Hardly a sum upon which to build a tourist industry.
     As late as 1980 the Commonwealth still had no economy to speak of,
indeed, a very prominent businessman, the late Joe Screen,  remarked that
he thought the economy "had a black hand over it." It appeared in those
days that the Northern Marianas, like the "economic basket cases" elsewhere
in Micronesia that were previously  part of the Trust Territory would
forever remain a stagnate backwater entity doomed to  remain on the federal
dole.
Saipan - The Last Battlefield of World War II To Enter A Reconstruction
Phase
     In 1986 three  fortuitous events occurred that had the potential to
change the economy. One event was local, the others international.
 - The CNMI abandoned the formerly restrictive, xenophobic Congress Of
Micronesia laws governing foreign investment and opened the economy to all
investors;
-The United States Government, at the Plaza Accords in New York, devalued
the Dollar in  relation to the yen which  had the effect of providing the
Japanese with a half price sale on  real estate and other assets. Japanese
investment flooded the island;
- United States citizenship was conferred upon the people of the
Commonwealth and when the American Flag went up it was a signal to all
investors, domestic and foreign alike that many major United States laws
prevailed providing the bedrock of stability  creating the investment
atmosphere permitting individuals and businesses to prosper and grow. The
above factors presented a tremendous opportunity  after decades of a low
standard of living and limited business opportunities, to strive for the
achievement of some degree of limited economic self sufficiency. The
American Government's action was directly responsible for a flood tide of
Japanese, Chinese, Korean and other investment in the Commonwealth.
However, the limitations placed on the area  by a small local population
still had to be overcome. This was solved by the importation of alien
workers without which no measurable development could ever occur.
Applications for nonresident work permits soared from 2,866 in 1980 to
28,829 by the end of 1996. Over an  eighteen year period locally generated
revenues in the Northern Marianas increased almost 45 times from $5 million
in 1970 to $223.3 million in 1996. Imports jumped from $31.1  million
(1979) to $628 million (‘95)  and tourist entries grew from 22,337 (‘71) to
736,508 (‘96).
     The great boom period in Japan from 1986 to 1991 fueled Saipan's
economic engine. Throughout the last half of the '80's, Japan registered
huge annual trade surpluses, had an ever strengthening currency and one of
the lowest interest rates in the industrialized world. Japanese banks
overflowed with money, much more than they could accommodate by relending
in Japan itself. It was this money that went abroad and around the world to
finance a myriad of projects. Millions were invested in the Northern
Marianas to launch the islands on the road to a thriving tourism industry.
It is estimated that from 3/4 to one billion dollars in foreign investment
has flowed into the Commonwealth.
        Principal among the investment incentives contributing to this
growth were: local control of immigration to overcome the constraint of a
small indigenous labor force. The Commonwealth - not unlike the continental
United States  and Hawaii -in the early years - has relied  upon imported
labor to develop its economy. Other incentives include the ability to offer
wage rates lower than the United States minimum wage - at least for a
period of time - and finally a lucrative tax rebate incentive similar to
many states that offer a tax holiday. These incentives and the area’s
association with the United States together with the advantage of being
able to ship qualified manufactured products to the United States duty free
combined to propel the CNMI’s economic “take-off.”
     Without the above incentives the economic progress the Commonwealth
has attained would not have been possible.
     The Commonwealth's proximity to Asia places it within reasonable
distances to 1.4 billion people with a combined gross domestic product
equal to $2.9 trillion dollars. Japan alone accounts for 11 and 70 percent
respectively of the regional totals mentioned above.
     The question might be posed as to why there is not more U. S. private
investment in evidence in this American affiliated Commonwealth? The answer
may lie in the geographic and demographic environment of the islands.
     The Commonwealth is somewhat isolated from the major suppliers and
markets of North America and the concomitant freight costs associated with
importing equipment and materials increases the cost of doing business.
Sheer distance and the time involved in traversing the Pacific are factors
which must be taken into consideration when planning projects. For example,
the Commonwealth is about as far away from the U. S. west coast as, for
example, Washington, D. C. is from Cairo, Egypt. The swiftness of jet
aircraft, while having the apparent effect of shrinking distance, tends to
distort the perception of time and space in the vastness of the Pacific.
The Marianas archipelago is closer to Moscow than Washington, D. C. At
7,000 miles, the area is the most distant member of the American political
family and the United States Capitol. The International Date Line is
between Hawaii and the Mariana Islands.  As a consequence of this
geography, at no time do normal business hours on the United States east
coast coincide with those of the Commonwealth.  Indeed, telephone
communication from the U.S. west coast and Hawaii, when conducted during
normal business hours and work days can only take place 4 days a week or
between Monday and Thursday ( in the US ), Tuesday to Friday  (in the
CNMI).
     Geography also separates the major population groups of Saipan, Tinian
and Rota and fragments the small domestic market and adds to the expense of
transportation and communication and thus somewhat limits the cohesiveness
of the population. The separation of the three principal islands requires a
tremendous duplication of government services as each island requires its
own air and sea ports, power and water production facilities, schools and
other public services which cannot otherwise be consolidated.
     The indigenous population of the CNMI is not much larger than many
communities in rural America.  With a large percentage under the age of 15
years and with a lesser number over 65 years of age, there are not enough
local people to fill available jobs.
       One important issue facing the Commonwealth today in terms of the
labor force concerns the large number of alien workers and there is a
paradox inherent in the current labor situation since any successful
attempt to stem the flow of nonresident workers could likely slow the pace
of economic development since foreign workers are recruited precisely
because the local labor supply does not meet current demands.
     Through the boom of the mid ‘80’s  every sector of the economy grew at
an annual rate of sixteen percent. During this period  the CNMI experienced
a rate of growth compressed into five or six years that would normally
require a span of two decades or more to achieve. The basic development
issue several years ago was - must the islands be forever doomed to a small
economy because they have a small local population?  The Commonwealth now
finds itself in the strange, if not unique, position of having an economy
that has far outstripped the capacity of the indigenous population to
provide the necessary workers for the labor force. No other area or
country, with the possible exception of Saudi Arabia, is in a similar
situation. For almost all other areas throughout the world the exact
opposite is true, not enough jobs for the available work force to occupy.
     It was only a few years ago that the islands had no economy to speak
of and the only employer of any size was the Trust Territory Government.
In 1980 there were only 740 hotel rooms and tourist expenditures were $58.8
million. By 1995 the industry had grown to 3,561 rooms and the combined
expenditures of 654,375 visitors has been estimated at $521.6  million.
     Between 1980 and 1995 there were 54,493 land transactions recorded,
(not all involved leased land).
      In 1980 the number of occupied housing units in the islands totaled
3,373. By 1995 the number had increased substantially to 12,058 units.
     The Commonwealth's economy with its 4,257 licensed businesses now
boasts total annual gross income of $ 2.26 billion (‘95) and  functions
between two economic forces.  As  a political entity affiliated with the
United States, a  thriving U. S. economy and a strong dollar is desired
when Americans travel abroad, but, the reverse is true with respect to the
Commonwealth’s tourism based economy since a strong dollar erodes the
competitiveness of the area's Japanese based tourist industry there-by
making the islands more expensive for the visitor when an increasing amount
of yen is required to purchase the dollar. In 1970 a Japanese visitor had
to pay 350.8 yen to purchase one U. S. dollar,  today he or she need only
pay about  115 yen. On any given day in the Commonwealth there are more
Japanese present than non-indigenous, native born Americans. In terms of
hotel ownership 61 percent of the rooms are owned and operated by the
Japanese; 16 percent are owned by Chinese; 12 percent American and 11
percent are Korean owned. Several major resort hotels are planned for
construction in the near future and a casino is under construction on the
island of Tinian.
          The tourism sector has been so lucrative for investors that  the
area’s major hotels have undergone three phases of significant expansion
since their original construction. Conservative projections of low and high
scenarios to the year 2001 indicate that the Commonwealth can expect  from
1.0 to 1.4 million visitors  providing additional hotel rooms are available
to accommodate this market. Visitor expenditures at that time have been
conservatively estimated at $1.3 billion. To accommodate this market a
total of 7,000 to 9,000 hotel rooms will be required in the Commonwealth’s
inventory.
     Visitor arrival information reveal that the Commonwealth’s visitor
industry in 1996 remained a vibrant sector. Air and sea entries were
736,508 for the calendar year representing an increase of nine percent over
the previous year. It has been estimated that visitor expenditures were
$587.8 million as compared with $539.4 million in 1995. The Commonwealth
closed the year with 3,847 rooms in its inventory, an increase of eight
percent or 286 additional rooms over those available in 1995.
     Since 1980 the increase in visitor arrivals has averaged 11.6 percent
annually. Only one year (1982) in the past seventeen years witnessed a
decline in arrivals and that was a minuscule three percent drop.
     Air craft landings at Saipan International Airport  increased  twenty
five percent over those of 1995 for a total of 36,852 in 1996.
     Projections to the year 2001 indicate visitor expenditures for air
arrivals will be in the vicinity of $1.4 billion (low) to $2.7 billion
(high). At that time the CNMI could expect to accommodate from 10,700 (low)
to 13,400 (high) visitors on the islands on any given day.
Population Growth
       The Commonwealth’s population increased 35.8  percent to 58,846 by
late 1995.This was an increase of 15,501 over the 43,345 people enumerated
in 1990.  The 1980 census recorded 16,780  people residing in the islands
resulting in an increase in the population of 42,066 or 250.7 percent since
that period.
     In 1995 males and females were about evenly split at 29,276 (49.8%)
and 29,570 (50.2%) respectively. United States citizens account for 46.7
percent of the inhabitants (with those born in the CNMI equal to 37.7
percent with the remaining 9 percent made up of other ethnicities).
remember the term “American” is not an ethnic classification. Those of
Chamorro ethnicity made up 23.5 percent of the population; the Filipino
community equaled 33.1 percent followed by the Chinese at 11.5 percent;
Carolinians registered 4.0 percent; Koreans at 3.9 percent and the Japanese
only 1.6 percent. The remaining 22.4 percent consisted of other Pacific
islanders and Asians, whites and blacks , (the two latter groups at 0.04
and 0.01 percent respectively). Several other ethnicities made up the
balance of the population.
     In 1995, 11,525 students were enrolled in school. The work force
consisted of 34,669 people 16 years of age and over, working 35 hours a
week or more.  The unemployment rate was 7.5 percent within a labor force
of 35,664, (comprised of those between the age of 16 and 64 years of age
who are either employed or unemployed) . This is in contrast with 1990 and
that year’s working population of 25,965 within a labor force of 28,664 and
an unemployment rate at that time of 9.4 percent. How the Commonwealth can
have a nonresident work force of the size it currently sustains and still
have unemployment is an interesting contradiction.
     Per capita income information currently available reveals the
following: whites $25,721; Chamorro $9,127; Palauan $6,029; Filipino
$5,137; other Micronesians $3,656. The overall average per capita income
for the islands was $6,986 with an average of 4.5 people per family. Per
capita income declined somewhat from the 1990 level of $7,199 which is a
result of an increasing number of low wage earners but it is  up
substantially from the $2,418 per capita income in 1980.
     Of the total of 12,058 occupied housing units in 1995, 4,038 were
owner occupied with 5,219 renter occupied, 2,801 units were occupied
without payment of rent by the occupants. These consisted of government
provided quarters and housing provided  by business owners for their
expatriate staff. People inhabiting group quarters (barracks and other
structures) numbered 9,703 down from the 11,489 so housed  in 1990.
     Private sector employment totaled 28,732 with the government employing
4,993. Self employed people accounted for 856 with 88 people performing
unpaid family work.
     In 1994, Capitol Hill recorded the highest median family income at
$42,622. The term “median” represents the middle value when each person’s
income in that area of Saipan is ranked from the smallest income figure to
the highest. In other words, that number which would fall midway in the
ranking where there are as many figures below that amount as above it. The
year 1994 is used in the ‘95 census because the government wanted each
individual with an income to record their total annual income for an entire
year.  Since the census enumeration was undertake in mid and late 1995
before that year ended, the income earned in the previous year was
recorded. With respect to the use of the term “family income”, a family is
defined as consisting of all related members as opposed to a “household”
which is made up of family and unrelated people or a unit consisting
entirely of unrelated members.
      The average family size on Capitol Hill was 4.33 persons. The per
capita income on the Hill was $9,842. and some change.
    Capitol Hill is followed by Navy Hill with a median family income of
$34,848 with Garapan registering the lowest  at $14,888. The median income
for Saipan as a whole was $22,774, with a per capita income of $5,863 and
4.7 persons per family with 10,848 occupied housing units and 184 group
quarters, (barracks, jails,etc.). The median age for Saipan was 28.1 years.

     Saipan’s 1995 population was 52,698. Median family income for other
areas of Saipan are as follows: Gualo Rai - $31,222; San Vicente - $26,878;
Dan Dan - $24,170; Koblerville - $22,860; San Roque $22,770; Tanapag -
$22,478; Kagman - $20,232; San Jose - $20,194; San Antonio - $19,805,
Chalan Kanoa - $19,616 and Susupe - $17,899.
     Tinian data are as follows: median income - $32,293; per capita income
- $6,231; persons per family - 5.4; median age - 25.9 years; occupied
housing units - 522; group quarters - 10 and a population of 2,631.
     Rota came in with a median income of $26,715; per capita income -
$5,421; persons per family - 5.2; median age - 27.7 years; occupied housing
units - 689; group quarters - 18 and a population of 3,509.
 The Economy
    The Commonwealth’s economic “boom” started around 1985 -’86. Several
indicators of the Commonwealth’s phenomenal growth can be observed from the
increase in locally generated government revenues. Business gross revenue
tax collections  increased from $19.3 million in 1986 to $67 million in
1996 for an average annual increase of 16 percent. Revenues collected from
the wage and salary tax  jumped from $7.4 million in ‘86 to $53.9 million
in ‘96 for an average annual increase of 40 percent. Impressive growth by
any measure. Government income from the import and export tax averaged 18.7
percent and 20 percent respectively. Revenue generated from the hotel tax
has averaged an annual rate of  growth of 31.5 percent. On the expenditure
side, in 1986 revenues required for government commitments were a mere
$40.5 million. Ten years later, by 1996, they had increased five times to
$216.8 million with the average annual growth rate of 19.2 percent.
Expenditures  also increased three and one half times from $59.3 million in
1986 to $209.8 million by 1996 for an average annual increase of 13
percent. It should be kept in mind that the Commonwealth, unlike Guam, has
three principal islands which requires a tremendous duplication of
services, three airports, three medical facilities, three public safety
operations, etc. These services can’t be consolidated and thus the high
cost of government operations.
     The extraordinary growth in government revenues was a result of two
factors: an  increase in taxes in 1995 but more importantly the striking
performance of the private sector and the reported business gross revenue
(BGR). In reviewing the most recent data available the reported BGR was
nine times larger in 1995 than in 1985. In 1985 the BGR totaled $244.4
million and increased to $2.26 billion (est.) by 1995 for an average annual
increase over the period of 21 percent. In terms of wages and salaries
paid, these jumped from a total of $77.5 million in 1985 to $464.8 million
in 1995 a six fold increase for an annual average over the period of 20
percent. However, all this was soon to change as the major Asian economies
began to falter toward the end of the decade.
The 1998 Recession
     The Japanese economic “bubble” burst in the early years of the decade
of the nineties which curtailed large investment in the Northern
Marianas.The local economy was further effected by the 1997 economic crisis
in Korea, Thailand and other southeast Asian countries. The devaluation of
their currencies resulted in making the Commonwealth a more expensive
destination while, at the same time, making their respective countries less
expensive to visit with the result that tourism entries in the Northern
Marianas declined drastically. Hotel occupancies fell, airline flights to
the islands were eliminated or reduced in frequency, marginal businesses
closed, property rentals and used automobiles available for sale increased
and government tax revenues declined. All this occurred at a time when the
Tinian Dynasty Hotel and Casino opened with the hope that the Chinese
market would patronize the facility. The above occurred at a time when
pressure mounted in the United States Congress to assume control of
immigration to the Commonwealth and at the same time impose the United
States minimum wage of $5.15 per hour. Pressure on the garment industry
increased as a result of the adverse publicity received for various alleged
violations of human rights.

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