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The ports, the military, the economy: CNMI exploring new opportunities with undertapped sectors

Updated: Apr 8




By Bryan Manabat

 

Saipan—Imagine a marine highway in the Marianas region that will facilitate inter-island travel via ferry service, providing an alternative to the costly flight option.


"It would benefit the local economy because our people would be able to take advantage of the ferry service,” said Jose Ayuyu, chair of the Commonwealth Port Authority’s board of directors.


Optimizing the use of the local seaport is also envisioned to expand opportunities for trade among the neighboring islands. “This would also open the possibility of shipping agricultural goods between all the islands in the Marianas,” Ayuyu said. “When exporting agriculture products from Rota to Guam or to Saipan, a ferry would definitely lower the cost.”


 The opening of a marine highway was among ideas that emerged during the CNMI officials’ meeting with the Department of Defense in Washington D.C. earlier this year. The discussion centered on improving local ports and developing new industries for the CNMI. Since the collapse of the garment industry, the CNMI has been dependent on tourism.


A series of unfortunate events proved the volatility of the CNMI’s visitor industry, which has been recovering in slow motion since the Covid pandemic that was later followed by super typhoons.


The short-lived casino industry, once touted as the CNMI’s economic salvation, died without living up to its promise. It was a disastrous economic experiment.


The CNMI is now in cramming mode, exploring different avenues to diversify its economy. Stakeholders are eyeing the military sector, a segment of the market that is under-tapped. The CNMI is also seeking to beef up a partnership with the military to modernize the CNMI’s port infrastructure. "Not only for military use but also commercially,” Ayuyu said.


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Saipan’s ports have been busy welcoming cruise ships. “I think we can encourage more cruise ships or other shipping companies to come into the port rather than unload out there in the open ocean," Ayuyu said.


During the CNMI delegation’s meeting with defense officials in January, proposals were sorted out. “The military is very receptive to working with us,” Ayuyu said. “Of course, everything has to do with funding, but the good thing is that we’re talking to decision-makers, and they know how important the ports are to us.”


Ayuyu noted the heavy involvement of the U.S. military in the economies of Guam and Hawaii. “Even when their tourism is down, their economies continue to function and provide employment to their people,” he said. “Out here, when tourism is down, we’re dead in the water. We have no backup. It makes a lot of sense for us to connect with the military.”


The U.S. military has invested $162 million in Tinian to construct and develop a divert airfield project that includes a tarmac for parking aircraft, and a training facility. The project is expected to be completed in October 2025. "It will be the ideal situation for us as the military increases their presence in our area," Ayuyu said.


CNMI Gov. Arnold Palacios has maintained his stance to pivot away from overreliance on Chinese tourists and investments. He prefers to strengthen the CNMI's ties with its federal partners including the U.S. military.


Taking a cue from the governor’s policy statement, the Marianas Visitors Authority is pumping up its strategies to attract military visitors to the CNMI. For this segment, industry stakeholders see Guam as the nearest source market.


As of the last census, there were an estimated 22,000 service members currently stationed on Guam. The first batch of the 5,000 Marines who will be relocated to Guam is expected to arrive either at the end of this year or early next year.

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While the military R&R may be small. MVA officials consider it an important niche market for the destination.


“The military market has always been on the MVA’s radar, and we have consistently participated in preparations for the many, many R&R port calls that military ships have made over the decades,” said MVA Managing Director Christopher A. Concepcion. 


“With the military buildup in Guam and the region, we are working closely with our military contacts to spread the word that Saipan, Tinian and Rota are ideal places to relax with family, have adventures with friends, and rejuvenate,” he added.


During the recently concluded economic summit billed "Charting Our Future Economic Development Summit,” Palacios urged policymakers and business leaders to “work together to provide a clear, realistic, and measurable path to economic growth through the implementation of sustainable, long-term strategies.


The governor warned against sliding back to the same failed economic policies such as the CNMI's overreliance on a single economic driver.




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