Economic Development And The Dilemma Of A Small Local Population

Economic Development And The Dilemma Of A Small Local Population

(Note: 1990 census data are used here-in as the results of the 1995 census were not available) At the time of the 1990 census the total employed labor force in the Commonwealth was 25,965 within a total population of 43,345 which includes nonresident workers but omits the average daily tourist population. At the time of the census the total indigenous population was 17,181 persons, or 39.6 percent of the CNMI's total resident and nonresident population. The indigenous labor force (both those employed and unemployed), between the ages of 16 and 65 years numbered 7,476 of which it was estimated that 4,777 (63.8 percent) were employed. The remaining 2,699 (36.2 percent) consisted of students, housewives and others not desirous of employment.

The unemployment rate for the Commonwealth in 1990 was 2.3 percent. The lowest of any area under the American Flag. At the time of the census there were 21,188 nonresident workers which made up 81.6 percent of the labor force. Considering the annual rate of growth of the indigenous population as measured between 1973 and 1990 and assuming that this rate of growth continues, there will not be a sufficient local population within the indigenous labor force to staff the available jobs in the Commonwealth that existed in 1990, namely, 25,965 jobs, until well into the mid 21st century. While the current economic slowdown has resulted in the reduction of some nonresident workers particularly in the construction industry from the recorded high point of two years ago, the above analysis does provide an important indicator of the Commonwealth's desperate need for outside labor to supplement the supply of available local indigenous labor. Depending upon the annual rate of population growth within the indigenous population, a growth rate of 1.85 percent will result in 92,783 indigenous persons of all ages in the year 2082 with the 1990 employment level of 25,965 jobs in the CNMI finally reached at that time. A three percent growth rate, which is extremely unlikely, will result in reaching the 1990 employment level by the year 2047. Today, the nonresident worker is a valuable and indispensable element in the Commonwealth's "new" economy and it is indeed fortunate that the CNMI is in proximity to the Philippines with its surplus labor pool which can be tapped to augment the Northern Marianas limited indigenous supply of workers. To cite only one example for this need, it is a generally accepted industry "rule of thumb" that a full service resort hotel requires from 1.0 to 1.5 employees per room in the facility. Considering the existing 3,000 hotel rooms in the area some 4,500 hotel employees are required to staff this industry alone. This does not consider the employees necessary to operate the remaining economic sectors of the islands. Without foreign workers the Commonwealth's economy would revert to the 1975 – '80 level. As late as 1980 the Commonwealth had no economy to speak of, indeed, a very prominent businessman, Joe Screen, remarked that he thought the CNMI "had a black hand over it."

It appeared in those days that the Northern Marianas, like the economies elsewhere in Micronesia which were previously part of the Trust Territory would forever remain an economically stagnate entity. Aside from the obvious constraints of no natural mineral resources, poor agricultural soils, a small and fragmented domestic market (three inhabited islands) located within an area subjected to the uncertainty of devastating typhoons, the islands of the Commonwealth had one other unfortunate disadvantage which, like the other constraints, remains to this day, which is the handicap of a small indigenous population and thus a limited human resource base. This single fact, unless it could somehow be overcome, would forever "cap" development and keep the islands at the 1980 level of development. Then, in the mid eighties, two fortuitous events occurred that had the potential to change the economy. One event was local, the other international: – The CNMI abandoned the formerly restrictive Congress Of Micronesia laws governing foreign investment and opened the economy to all investors; -The United States Government devalued the Dollar in 1986 as related 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 CNMI. These two events presented a tremendous opportunity – a once in a lifetime opportunity to finally, after decades of a low standard of living and limited business opportunities to attempt to strive for the achievement of limited economic self sufficiency. 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 occur. Applications for nonresident work permits soared from 2,866 in 1980 to 22,745 by 1990. Today, with the exception of the slowdown in construction, it is impossible to reduce the reliance on alien workers without doing irreparable harm to the local economy and to the investment reputation and credibility of the Northern Marianas and to some extent that of the United States among many foreign investors from Asia who established themselves in the Commonwealth largely on the basis of the area's affiliation with the United States and the confidence and trust that was inspired by that association.

One might legitimately ask: why not employ U. S. citizens from the mainland and elsewhere to staff the economy? The fact is that some do come to the islands – but a great many do not remain very long. Many people from large metropolitan areas on the U. S. mainland and elsewhere who move to the islands for employment reasons find adjustment difficult and do not remain long after their "initial" enthusiasm wears off. This is not meant to be critical of such people or the islands, it is simply a fact. Usually disenchantment of one spouse or the other is likely to result from one or more of the following: high cost of living compared with the United States particularly for food, rent and utilities; perceived limited medical facilities or educational opportunities; inability to adapt to a different environment; low wages and salaries compared with the mainland or limited employment opportunities for a spouse; the expense of moving household effects vast distances and the cost of re-establishing one's household; limited opportunities for professional growth; hot and humid climate; separation from family members on the mainland and the expense of returning for frequent visits; a service oriented economy that limits opportunities for some professions; limited cultural entertainment; no public transport; water shortages in some areas or special needs that cannot be met in the islands. The above are some of the reasons people leave the islands after a relatively short period and return to the U. S. mainland with the result that the U. S. mainland does not appear to be the source or solution for the island's work force that one might otherwise assume. It is primarily the Philippines to which island employers have usually turned in the past. The recruitment and maintenance of a nonresident worker for their first year of employment can cost a Commonwealth employer as much as $5,500. per person and this does not include their salary. The presence of such a large alien population is the subject of intense controversy in the islands. Those opposed to their presence cite the pressure on infrastructure facilities, hospital, water, recreational areas, etc. Those in favor cite their contribution, indeed, necessity for a growing economy. With regard to the latter the business community criticizes government efforts at regulation and cites “red tape” as an onerous, expensive and time consuming burden. The United States government is critical of the use by some businesses producing products for export to the United States in competition with American workers. Some members of the United States Congress have suggested that local control of immigration in the Commonwealth be withdrawn and the administration of immigration be placed under the laws of the United States with U. S. immigration authorities responsible for this element of government. Several frustrated Commonwealth businessmen have indicated that they will turn to the Caribbean island of Puerto Rico, an area of high unemployment, for their labor force. Puerto Rico workers are United States citizens and can enter freely into the Commonwealth for any purpose. Employers would then not be obligated to provide employee housing, food, medical care, transportation, etc. as now required when alien workers are employed. This action, should it ever occur, would eventually present serious consequences with respect to local control of the government since these workers would come with all the rights and privileges of U. S. citizenship including the right to vote in local elections. Indigenous Labor Force Needs 1/2 Century Of Growth To Equal Number Of Employed Persons In The Commonwealth In 1990 Depending upon the rate of increase selected for projecting population growth, it is interesting to note that the year 2047 is as distant from the present as the 1943 Battle of Midway is in the past.

The year 2082 lacks only eight years from being a full century from the 1990 census date and is as close to us today as the year 1908 is a quondam period. Both distant times and long ago – 1908 was within the German period and the population was approximately 1,600. The year 1943 was within the Japanese period when the population consisted of approximately 4,150 indigenous and 19,550 Japanese and other nationalities. The Commonwealth’s Need To Control Immigration The basic question to be posed is: Must the CNMI be penalized with a minuscule economy simply because it has a small population? Frequently the CNMI is compared with Guam and the question posed: If Guam can survive without control of its immigration, why can’t the Northern Marianas? Until recently Guam has had a large military presence with the dependents of service personnel available in the labor force. Guam is a single, contiguous island economy. The Commonwealth's three populated islands requires a tremendous duplication of services and thus a duplication of personnel, for example, three power plant operations, three school facilities, etc. In reply to those who believed the size of the Commonwealth government should be reduced, it must be remembered that the executive branch administers laws passed, not only by the CNMI Legislature, but also those of the United States. American environmental protection; occupational health and safety; historic preservation and a host of others that were made applicable to the islands, whether they were appropriate or not, requires staff to implement, monitor, administer or regulate. That's what governments do. One way to reduce the size of Government would be to repeal some of the laws. Presently, two industries dominate the economy of the Northern Marianas – tourism and garment manufacturing. Tourism is an extremely fragile industry and many forces, both internal and external, can affect its success. Typhoons can be a disruptive force, as can droughts, pollution, crime, an area’s price structure, competition from other areas, fuel prices, the dollar yen ratio and a myriad of other factors. No economy should be dependent on a single industry – especially tourism. Therefore, every effort must be made to diversify the island’s economic base. Manufacturing, fishing, agriculture, etc., accomplishes this goal. In most cases manufacturing, and to some extent, fishing and agriculture will require nonresident workers. Manufacturing will also require the importation of raw materials. But always the matter of an adequate labor force arises. Finally, loss of local control of immigration may ultimately mean loss of local control of the government and in particular – the legislative branch . One must legitimately pose the question: Why should an indigenous population – one which has endured for centuries in relative isolation; coped with the devastation of typhoons; been destroyed by war; survived the colonial administration of the Spanish, Germans, Japanese, the United Nations and the Trust Territory Government not desire to retain control of its government? One’s cultural heritage strengthens one against such forces and it is only natural to desire to protect it. Possible Impact Of The Application Of U. S. Immigration Laws In The Commonwealth In 1981 If U. S. Immigration laws had been applied in the Commonwealth in 1981 it is very possible that there would be no need for nonresident workers in the Northern Marianas. Had they been applied it is also quite likely that by 1993 the indigenous population would comprise only nine percent of the total population and would continue to decline as a percent of the total in future years. One reason the Commonwealth was permitted control of its immigration was to avoid the possibility of being overwhelmed as a result of United States immigration quotas as applied to Asian countries. It was feared that immigrants entering the United States would select the new Commonwealth as a port of entry to the United States and very possibly a place of residence because of the island’s proximity to their home country.

Since 1981, three and one half million people from Asia alone have immigrated to the United States according to the Visa Section of the U. S. Department of State. If only 5 percent, or 175,000 people, settled in the Commonwealth – THERE WOULD BE STANDING ROOM ONLY. The total population, including the indigenous would be 193,300. Such growth would have resulted in a 1993 increase in population density from 468 people per square mile on the islands of Saipan, Tinian and Rota to 1,635 persons per square mile. An increase equal to about nine and one half times the CNMI’s 1993 estimated indigenous population, (18,300). Considering only immigration to the United States from Asia for the period 1981 thru ‘93, the ethnic composition of the Commonwealth would have changed radically if you except the premise that five percent of the total would stop off and remain in the islands. Using State Department ratios to estimate the ethnic mix, there could have been about: 37,200 Filipinos; 22,900 Chinese; 18,200 Koreans; 18,300 from India; 17,900 Vietnamese; 7,200 from Hong Kong; 3,600 Japanese and 49,700 from other Asian countries or a total of 175,000 people as opposed to only 18,300 indigenous people. It doesn’t take a political genius to figure out that once American citizenship was obtained by this group the indigenous people would lose control of the local government and the society would be far from being homogeneous. You would have in effect, a miniature continent of Asia squeezed on to three small islands with a combined total land area of 118.2 square miles. At one time United States immigration laws permitted the entry of up to 20,000 aliens each year from every country in the world maintaining a diplomatic relationship with the U. S. when other established criteria was met.

A continental land mass as large as the United States is capable of absorbing such large numbers of immigrant aliens. This is certainly not the case of a small island area such as the Northern Marianas In terms of square miles the combined dry land area of the 50 states is almost 30,000 times as large as that of Saipan, Tinian and Rota combined.