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  • By Jonathan Perez

Bracing for the CNMI's next four years

Governor Torres gets ready for another term as the Commonwealth absorbs a series of economic shocks

Saipan— As of last week of December, the Commonwealth Utilities Corp. has restored 61 percent of power on Saipan and Tinian. On Nov. 27, the Marianas Visitors Authority welcomed 180 tourists from China, the first group to visit Saipan since the Francisco C. Ada/Saipan International Airport reopened for international flights. The Federal Emergency Management Agency is working overtime toward the CNMI’s full recovery. Natural disasters are challenging the CNMI’s seesaw economy.

In recent years, it was emerging as a market star – its economy grew at annual rate of 25 percent in 2017— but transformed to a state of calamity overnight when an unwelcomed visitor, super typhoon Yutu, came on Oct. 25, 2018. Damage cost to power and water infrastructures alone reached $17.5 million.

Saipan, Tinian and Rota were brought to their knees by consecutive typhoons in a span of almost two months. Rota was the recipient of the wrath of Typhoon Mangkhut on Sept. 10 while Saipan and Tinian were ravaged by Super Typhoon Yutu, the strongest tropical cyclone that hit the CNMI in 40 years. Yutu rammed into Saipan, which was still recovering from the destruction it experienced from Typhoon Soudelor three years ago.

CNMI Gov. Ralph DLG Torres, who won the gubernatorial election in November for his first four-year mandate, is facing bigger challenges in the next four years.

Even the casino industry, which offered an economic salvation for the CNMI, is in a precarious situation. It briefly shut down after Yutu, and later reopened with shrunken operations, reducing workhours and laying off almost a hundred employees.

Yutu displaced hundreds of families when it destroyed homes mostly in the southern part of Saipan and northern Tinian while also causing major destruction to infrastructure, private businesses and establishments, and agricultural crops. Over 1,000 homes were either totally leveled or experienced major damage.

Labor Secretary Vicky Benavente said the CNMI Department of Labor surveyed more than 60 businesses that reported approximately 1,300 employees are affected by the massive infrastructure damage on Saipan and Tinian, the closure of the Saipan International Airport, and the cancellation of visitor arrivals from key travel markets.

“Hundreds of residents are having to cope with the loss of their homes and personal belongings, on top of being having work hours would reduce. CNMI DOL has taken proactive measures to ensure that employees’ concerns will be address through a variety of programs that we requested and applied for from the U.S. Department of Labor,” Benavente said.

These programs include the Disaster Unemployment Assistance, which has already seen 2,000 applications distributed and/or submitted to CNMI DOL. A majority of DUA applicants work in the following businesses: tour operators, casino, hotels, real estate, catering, poker arcade and gas station. Job classifications include: mechanic, cook, driver, dealer, room attendants and tour guides.

Chinese and Korean visitors, two of the CNMI’s main source markets, withdrew their tour bookings which also resulted to the cancellation of flights by air carriers that fly to Saipan. Hotels such as the Pacific Islands Club Saipan and Coral Ocean Point Golf & Resort closed down after their facilities were damaged by the destructive winds. PIC opened in December before Christmas while COP may remain closed until E-Land Group of Companies Saipan completes all repairs and renovation needed.

The overall cost of damage is still being assessed. The impact of Mangkut and Yutu will reflect in the 2018 report that the U.S. Bureau of Economic Analysis will release next year.

“Obviously, we’re going to see some effect on our economic growth because the whole month of November we don’t have any tourists,” Torres said. “While being a resilient community and business, I am confident that we will bounce back.”

Post-Yutu recovery efforts have been better than in post-Soudelor. Equipment and personnel have been pouring in from U.S. federal agencies, military commands, Pacific island governments, charity groups and individual donors. FEMA has obligated $20.1 million for classroom structures for the Public School System and the Northern Marianas College, island power restoration, and a generator for the CNMI Judiciary at 100 percent federal share. “These were all critical priorities that we requested from FEMA in order to address several key areas,” Torres said.

As of Dec. 4, 2018, FEMA has released $6.9 million in emergency food assistance grants distributed to 11,209 households. The U.S. Small Business Administration has so far approved $42 million in disaster loans to allow households to rebuild their homes.

“We’re going to continue with our working relationship with our federal partners and other [private] organizations. We will continue to foster that partnership to make sure that all our priorities and needs are all addressed,” Torres said. “And our partners also know that we continue to work hard to make sure the recovery continues at the pace that we need.”

Torres is optimistic the CNMI economy will pick up sooner than projected. Skymark, Japan’s low-cost carrier, is scheduled to launch its inaugural flight to Saipan either by March or April next year. “There’s this one thing that we’re trying to clear out and then once we get the clearance we will move forward with the actual date of the inaugural flight,” Torres said.

His administration is working with local business sector to make sure there won’t be any hitches once Skymark begins flying to Saipan. “We’ve been working with MVA and our other business partners here to make sure we have enough accommodation with our Japanese tourists when they start flying in,” Torres said.

Residents of the Northern Marianas are veterans of natural and economic disasters. Time again, they dust off their shoulders, stand back on their feet and prove their resilience.


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