Can the CNMI sustain its economic growth after the end of CW1?

January 6, 2018

   Saipan Nobody knows what will happen to the CNMI after the clock strikes 12 on Dec. 31, 2019. That’s the day the CNMI-Only Transitional Nonimmigrant Worker or CW1 Program, handled by the U.S. Citizenship and Immigration Services, comes to an end.

 

   A cloud of uncertainty hovers over CNMI —especially on Saipan, the center of economic activity and main tourist attraction of the commonwealth.

 

   Government and business leaders are lobbying and working hard in asking the powers that be in Washington D.C. to extend the program for at least another five years rather than risk losing the economic gains of the last four years.

 

  

  

 

 

 

 

 

Acting Gov. Victor Hocog leads the groundbreaking of the new U.S. courthouse for the CNMI in Gualo Rai in this Dec. 7 file photo. Nobody knows what will happen to the CNMI after the CW1   program comes to an end on Dec. 31, 2019.  Photo courtesy of Office of the CNMI Governor

 

 

 

  The CNMI economy grew rapidly, buoyed by new investments and increasing tourist arrivals from the Chinese and Korean markets. A huge contributor was the government’s decision to allow casino gaming on Saipan, a new industry that attracted wealthy tourists and other players. Imperial Pacific (CNMI) Ltd. has pumped in more than $500 million in investments from its integrated gaming facility with the its grand project, the Imperial Pacific Resort, still being constructed.

 

  Labor and immigration issues hampered the construction of the mega-facility located in the heart of Garapan. Contractors and sub-contractors hired by IPI to finish the project tapped the services of Chinese workers, who entered the CNMI illegally as tourists.

 

  Groups of these workers staged at least weekly protests, demanding that they be paid wages and other benefits promised to them by the contractors. Most of the workers got paid and left the island for their homes in China but there are still almost 10 who have yet to agree on the amount offered to them by the companies that hired them.

 

  This issue hurts the case being made by government and business leaders on behalf of proposals agreed upon by the CNMI and U.S. federal panels during last year’s 902 Talks. President Trump, through Chief of Staff John Kelly, has also promised to rescue the CNMI from its predicament.

 

  The 902 panels are proposing to extend the CW1 program to at least another 10 years to give businesses and other employers—including small business owners—time to transition their workers to applicable U.S. labor visas. Another proposal would give long-time guest workers CNMI-Only resident status, a move welcomed by employees who are under the CW1 program.

 

  But USCIS, after reducing the CW1 cap by 3,000 for fiscal year 2018, has already released the numbers up to FY 2019 and Dec. 31, 2019, a move suggesting they would not change the plan to zero out the number of foreign guest workers before 2020.

 

  This sent shockwaves and concern to the CNMI community with the administration of Gov. Ralph DLG Torres and business leaders—led by the Saipan Chamber of Commerce and the Hotel Association of the Northern Mariana Islands—expressing concerns about the economic future of the CNMI.

 

  Some locals—who felt that foreign workers stole their jobs—welcomed USCIS’ plans. For them, it is time for all foreign workers to either get U.S. work visas or go home.

 

  Labor officials say there are currently 12,000 guest workers holding CW1 permits in the CNMI — half the number from 2015. An exodus of foreign workers could badly hurt the CNMI.  This could mean a huge reduction in the volume of customers subscribing services to the Commonwealth Utilities Corp., the telecommunications firms Docomo Pacific and IT&E. There would be less bank clients, consumers who buy goods in stores and supermarkets like Joeten, car buyers and those who rent apartments and houses.

 

  This could also mean that mechanics, electricians, beauticians, make-up artists, barbers, and other major job holders in the hotel and tourism industry would leave the CNMI.

 

  Is it a doomsday scenario?

 

  Companies would likely be forced to either reduce their operating hours or close shop since they won’t have enough employees to help sustain their businesses. Investors could face a reduction or lose profit and this could prompt them to close shop and move their business to other more lucrative markets. And this is what the government and business leaders are trying to prevent, especially the former as this would mean a return to rolling blackouts and power interruption schedules and the chaos that prevailed when the multi-billion dollar garment industry closed its last factory more than 10 years ago. Both sectors are trying to avoid the CNMI experiencing another 17 percent drop in gross domestic product.

 

  So Dec. 31, 2019 is on everyone’s calendar and awaited nervously. Meantime, will USCIS, U.S. Congress, and the White House have a change of heart and grant the proposals under the 902 document, backed up by reports of the U.S. Government Accountability Office and the U.S. congressional delegation?

 

  It is up to the federal government to decide the fate of the CNMI., while  people, the  private sector and government await the answer.

 

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