The Guam Chamber of Commerce has begun exploring new possible industries to keep the island's economy bustling without relying on the volatile tourism sector.
"The current economic crisis caused by Covid-19 has crippled our visitor industry with almost zero economic activity in the second and perhaps even the third quarter of 2020," said Catherine Castro, Chamber president. "Business closures associated with the pandemic have left thousands of our residents unemployed for the unforeseeable future."
Tourism, Guam’s largest industry, generates $1.4 billion annually and representing 60 percent of the island's annual business revenue. The industry employs over 18,000 island residents or 31 percent of non-federal employment.
Over the years, however, tourism has seen its ups and downs, depending on factors beyond the isand's control.
The uncertainties of this situation reminds us of how vulnerable our current economic model is and how imperative it is that we develop and sustain new industries that will capitalize on our existing strengths and encourage our workforce to seek higher skill-sets.
The Government of Guam has recently released a Consolidated Revenue/Expenditure Report (for the period ending May 31, 2020) which reported a shortfall of $51 million in government general fund revenues. The Bureau of Budget and Management Research (BBMR) Director commented in a local publication that much of the shortfall was attributed to the movement of the tax filing date to July 15th from April 15th.
The report indicates that year to date, corporate and individual tax shortfall is roughly $41 million. While we will need to wait until the July 2020 report to understand the true impact of these taxes on government revenue, the remaining $10 million shortage in collections which support the Government of Guam’s operations is concerning. In addition to General Fund Revenues, Special Revenue Funds are also significantly behind as compared to prior year.
The May 2020 Special Revenue report already indicates that there is a combined $8.4 million shortage in major funds which support government operations. As of May 31st, there is a $2.7 million shortage in the Guam Highway Fund; $3.6 million shortage in the Tourist Attraction Fund; and a $2.1 million shortage in the CQA Inspection Services Fund.