CNMI Economic Roundtable A Reflection in Political Economy: A Case Focus on the U.S. Commonwealth Democracy By Juan Nekai Babauta & Juan Sablan Torres The Marianas Business Journal this month asked Juan S. Torres and I for comments on the local economy and the essential skill sets, senior executive and job-related experiences that candidates bring to the table, in order to make informed decisions and effectively navigate the commonwealth out of the economic wreck that it is brought upon the people of the Commonwealth of the Northern Marianas. Juan S. Torres and I gladly responded to the leadership call by this reputable and prestigious business magazine serving the Marianas business community. Juan S. Torres and I understand the import of a robust and thriving economy: it is front and center in our action agenda, just as the pocketbook pinch is certainly in the minds of most, especially those who are suffering from the wreck wrought upon the homeland. Juan and I were asked pointed questions. We responded to the questions premised on our collective vision of hope and optimism for the prosperity and success of this great Commonwealth. In this commentary, we briefly talked about our reflective tours in building and sustaining an economy; make reference to the pitfalls in the saying “I didn’t plan to fail, I only fail to plan”; talk story about a military economy in the crown jewel of the Marianas; reflected on property rights in Article XII; and concluded in closing underscoring the gravity of the present economic malaise which requires the comparative skill set, knowledge base and senior executive advantage offer by the Babauta-Torres Choice of Leadership. It is the only team of choice that does not require on-the-job training (OJT), a factor attributable to the causes of the present multitude of problems inundating the current government and the homeland. Listening Tours & Reflective Vision Research Quite frankly, taking a pause over the years and spending quality time listening to our people from all walks of life, both in local communities and communities abroad, and then reflecting on what event, act of man, or act of God could possibly bring the homeland to the present social-economic and financial debacle and wreckage en masse can only be ascertained through a referendum on the present government and the moments of leadership performance brought upon the commonwealth. It has been quite sombering to hear people from all walks of life literally lose hope on the kind of leadership and leaders that continue the commonwealth in the present path of rampant suffering, from uncertain retirement check runs, the burgeoning health care costs to the outrageous utility costs, lack of air and ocean services to Guam, Rota and Gani Islands, to regular and direct air link to Asia, and many more others too many to mention. People expect the quality of leadership and leaders that do not first ask you to change, but for the government itself to be changed and to change its approach to problem-solving and build consensus among all stakeholders. This approach will jettison the islands in the proper trajectory moving forward in a strategic direction that bring home hope, optimism, prosperity, and success for ALL! Caring about our CNMI-- our place of birth; our home of choice; and our home by association, involve thinking logically and deeply about the future of this great U.S. Commonwealth. This commitment requires us to be problem-solvers now, and not to delay or yield problem-solving to others tomorrow. This real time commitment requires that we define how we envision ourselves and our lives today and that of our children and their children tomorrow in five (5) to ten (10), or even 15-20 years and beyond that apply strategic and forward thinking in informing what we do today in building tomorrow. Building & Sustaining an Economy On the query, “If, as governor, you could only take up one issue to encourage businesses to actively support the health of CNMI’s economy, what would it be?” The Babauta-Torres (BT) Team will immediately restore investor, business, and consumer confidence upon taking the oath of office. Recognized experts in the field of economics and finance, such as noted economist Arthur Laffer will be tasked to perform benchmark macro-economic and micro-economic analyses of the CNMI’s current economic landscape. These benchmarks will serve as guideposts in formulating robust policy recommendations aligning revenue generation with government spending policy. The analysis will also help to identify existing predatory, regulatory and trade policies that act as disincentives to innovation and expansion of existing businesses and discourage new investment. Using a well-developed plan of macro- and micro-economic policy intervention, this new focus-driven, business-friendly environment should provide comfort in restoring investor confidence, which in turn will give the business community the needed rationale to re-invest a portion of their earned income and tax rebates in innovative business expansions, investment in technology (i.e., increased productivity) and socially beneficial projects, such as affordable housing, village-based day-care & elderly-care, learning centers, public transit busing, targeted higher education scholarships, cultural exchange programs, etc. The people of the CNMI should expect and demand the implementation of all programs to be planned-driven, maximizing economy-of-scales from between and within all agencies. Specific actions in restoring investor, business and consumer confidence in the CNMI should incorporate the following components but not be limited to: (1) periodic executive-legislative business outreach and consultation; (2) periodic executive-legislative industry-site listening tour; (3) the pursuit of new investments in complementing industries to existing businesses as well as regionally-complementing industries; (4) the pursuit of targeted private-public partnership (P 3), results-driven trade missions to Asia, America, & Europe; (5) identification and removal of hostile & predatory regulatory and permitting requirements ; (6) building throughout the executive agencies and autonomous agencies quality assurances and accountability mechanisms to ensure customer-friendly government; and (7) integrating silo-based geographic information system (GIS) into a uniform and comprehensive web-enabled economic development GIS technology. Most importantly, we must all demand that the entire government bureaucracy exists to serve its constituency! Government services must be customer-focused and customer-friendly. The people are the masters of government, not the other way around, like in a little more than a few agencies of government. “I didn’t plan to Fail, I Just Fail to Plan” Unequivocally, restoring trust and confidence in government by changing the present system of governance in order to immediately STOP People’s SUFFERING is top priority in the Babauta-Torres administration. This will be accomplished by removing the causes for constant increase in costs of utilities; exorbitant health premium; predatory regulations and requirements; anti-economic growth fee structure and anti-development costs; anti-middle class tax structure; and hit-n-miss inter-island air links. In this respect, Babauta-Torres will embrace private-public partnership activities, not only with the business community but also with our federal partners. All preventable consequences, owing to the government’s (governors) persistent hit-and-miss policies, without documented preparation or planning, i.e., “I didn’t plan to Fail, I Just Fail to Plan” mindset will be mitigated and ultimately eliminated as standard operating procedure (SOP) in the delivery of public services in a new Babauta-Torres leadership. With full support of the CNMI community, and we thank you in advance for your confidence, going into inauguration day, the Babauta-Torres (BT) Leadership WILL waste no time in placing the spotlight on the CNMI’s economic resurgence. First, like any household, by taking inventory of all our assets and liabilities; then, in consultation with the legislature and in particular the CNMI citizenry, develop a realistic plan to address our people’s needs in prioritized structure. To rehabilitate and restore the economy’s essential components and immediately throttle the economic engine to its natural, robust, and optimum condition and set our economy on course, we need to maximize our own resources such as the CNMI’s treacherous 3-mile exclusive economic zone (EEZ). As we identify our own hidden gems, methodically construct a sound structure and timetable for each, aimed in a trajectory of sustainable growth, faithfully executing our sound economic plan, placing it our collective all-on-the-line, we will achieve our economic goal—a much better standard of living not just for the few but for ALL!. The BT Team is certain, it’s our pride-on-the-line!. In other words, the Babauta-Torres comprehensive integrated governing model (macro perspective) in making our economic development system work, thrive, prosper, and be successful is focused on weaving the disparate micro-economic facets of the economy (i.e., CNMI economic development system) into a comprehensive and actionable system. This is accomplished by creating the right business, investment and trade climate; playing to our economic strengths; nurturing an entrepreneurial and “growing our own” atmosphere; working closely with our academic institutions (PSS, NMC, NMTI, abroad, etc); increasing the availability of risk capital (i.e., venture capital resources); seeding a capital idea for the CNMI and other participating partners (e.g., “angel” investors and micro-lenders, etc.); promoting exports for CNMI and other participating companies (SBA Import-Export, US Import-Export Bank, CDA, Asia Development Bank, etc.); and promoting economic development in rural (Rota & Tinian) & frontier CNMI (Gani Islands north of Saipan). With the full cooperation and participation of all, in short, we will turn our economy around by being fiscally responsible, getting our residents without jobs back to work and setting the foundation for a stronger and prosperous economy in the future today. Military Consideration On an externally-based economy, Juan S. Torres and I will strike a proper balance among often competing and conflicting interests of the military-driven economy. We will focus equally on the eco-system health and sustainability, cultural, geological, hydrological and marine resource management, on the one hand, and the interests of the military industrial complex, on the other hand, consisting of business interests in direct and indirect relationship to military buildup activities and events. In other words, unlike the present situation, a Babauta-Torres Leadership will utilize fully the Covenant Section 902 consultation process in engaging with the military in a meaningful and mutually supportive dialogue and negotiation. Juan S., Torres and I will invite to the table not only the Governor’s Military Integration Management Coordinating Unit. We will also include the local Office of Veterans Affairs; the Saipan Chamber of Commerce Military Committee; the local Hotel Association in consultation with the Armed Forces COMREL Unit and the environmental and ancillary agencies of government, including the local nature alliance organization (e.g., MINA) and the science academy group and the respective municipal representatives and mayors. The Crown Jewel of the Marianas Our approach to our local tourism industry is to make the industry top priority in our administration. Juan S. Torres and I will not waver in our commitment to the full implementation of the Marianas Visitors Authority (MVA) Tourism Master Plan (2012-2016 and beyond). The Babauta-Torres Leadership will make the CNMI a destination of choice for business, for tourist, and for trade and commerce--the fiver in the centerpiece of the CNMI’s hospitality industry will be the CNMI host-culture. How, for instance, can we establish the CNMI as an international sports village and develop the local regulatory and support infrastructure. Tourists oriented modernization and expansion of our public pathways and roadways, traffic management and public transportation infrastructure, in particular, tourist frequented sites should also be enjoyed by our citizens. We will openly embrace, encourage and pursue public-private partnership (PPP) development (e.g. BOT) on tourist-related and public service infrastructures. Moreover, we will re-package and pursue without delay comprehensive and sensible heritage tourism. We will collaborate with countries which at one point in history colonized the Mariana Islands. These countries are Spain, Germany, Japan, the U.S. and Europe. Authentic remote Mariana Islands adventure and cultural experiences will be integrated into the existing tourist destination portfolio. Gani Islands, north of Saipan for example, will be promoted and marketed for adventure filming and nature-related T.V. advertising (e.g., Pagan, Sarigan, and Alamagan, etc.) tourism that is industry-friendly. Additional industries aimed at boosting tourism include ecotourism, agro-tourism, edu-tourism, heritage tourism, sports tourism, film and TV advertising, military tourism, and volunteer tourism. Sister city tourism and convention tourism will be mapped out in order to strategically target Asia. Volunteer tourism will be crafted into the mix. For these efforts to succeed require work on lift capacity. BT will have serious consultative dialogue and personally develop relationships with airlines, cruise liners, and other providers of tourist transportation. We will integrate our local marketing efforts with Destination America, so that the CNMI could be marketed in the international market, especially in countries with historic vestiges in the Marianas. Of Property & Article XII Because of the lack of reliable information and public education on property restriction in the Northern Marianas, there is a current push to either abolish or to modify property ownership system in the homeland. It is our considered view that providing a more economic-based renewal option may resuscitate the economy by spurring major investment in the Commonwealth in the manner it occurred in the mid-80’s before the bubble burst. This adjustment will revive and revitalize the real estate market, benefiting landowners, real estate brokers, and investor capitalists. In other words, a more flexible long-term interest in real property will enable institutional lenders and guarantors to finance commercial development transactions, enabling business opportunities to flourish in the secondary market. The current base term leasehold interest in real property of 55 years and subsequent renewal leasehold option term of 25 years beyond the fifty-five year base leasehold term should be safely sufficient for recovery and amortization purposes. Moreover, traceable lineage burdened on the applicant should substitute for blood quantum. However, the fate of article XII in the Constitution is a topic that merits comprehensive consideration by all stakeholders, ultimately, the future social and economic health of the CNMI rides on the balance. Contrary to popular belief, a non-NMD could own fee-simple property in the CNMI, by purchasing, say a condominium with common appurtenances above the first floor in a privately-owned realty. There are a number of realty transaction in this category, but are not actively marketed by real estate agents out of ignorance generally. Additionally, the vast stretches of open submerged land within the 3-mile exclusive economic zone, including its seabed nodules, other minerals and geothermal reservoir, is not being marketed. BT is committed to this venture. Moreover, today the local newspapers reported a submarine cable running by or through the northern islands. An assessment must be made to determine whether the CNMI is entitle to rental within its EEZ waters, at the minimum. In speaking with bankers however, it has become apparent that the real problem is not so much with Article XII per se, but with the CNMI’s mechanic lien statute. Institutional lenders and guarantors in the CNMI have experienced certain difficulty in obtaining mechanic lien endorsement from local title insurance companies due to certain ambiguities in the mechanic lien law, thereby preventing title insurance companies from providing mechanic lien endorsement in financing house construction loan or home purchase mortgage. What is required, therefore, is to first strengthen the existing statute by providing for specific timetable that contractor, subcontractor, or material supplier are required to file a lien against completed, partially completed, substantially completed or abandoned project improvement financed or guaranteed in whole or in part by a CNMI-licensed lending institutions, a CNMI-government entity, or a federal agency institutional lender or guarantor. Collaborative Leadership- A Breathe of Fresh Air for a Change! Juan S. Torres and I pledge to make the change required by the commonwealth, in order to help bring fresh air to the slippery slope our local governance struggles with—the kind of governance that is collaborative and focused on performance and results, that is also customer-friendly in effectively delivering broad community benefits to everyone and not enriching only a select few! Juan S. Torres and I will realize our vision not by asking people to make a change, but for us to bring change to the government in the manner it serves all people: a world order in a new government that does not make unilateral and backdoor decisions which ultimately threatens the rights of individuals in our democracy. But, a government that openly builds informed consensus and engages in informed collaborative leadership with all stakeholders, one that is intended to benefit all and not to enrich only a handful is our principle of governance for success in the modern century--the principle Juan S. Torres and I will operate by. Juan S. Torres and I believe in collaborative leadership that builds on consensus and open process. We retain the necessary and sufficient college education, senior executive experiences, and human resources relationships to make things happen. Our direct experiences and established relationships, particularly with our local government and our federal partners, in addition to our collective experiences in the private sector are key in making things happen once in office. After all, Juan S. Torres and I have no reason to waste time on on-the-job training activities! Collectively, our combined background provides ready access to and the know-how for navigating and successfully dealing with local financial institutions, local banks, and the Retirement Fund: Juan S. Torres, as an accountant by trade; Staff Accountant, Office of Economic Opportunity (U.S Federal Agency); 902 Negotiation Team; Tax Task Force; General Manager/Vice President, Bank of Saipan Manager; Commonwealth Savings & Loan Asst. Manager, Bank of America, Saipan Branch; a former pension fund Administrator CNMI Retirement Fund; Representative, CNMI House of Representative; Senator, CNMI Senate; Director, Division of Land Registration & Survey (DLNR); and Chairman, Marianas Public Land Trust, Board of Trustees, and a fulltime farmer, among others. Moreover, throughout Juan’s successful professional assignments Juan S. Torres was privy to numerous and important professional executive trainings at University of Pennsylvania, Wharton School of Business; University of Pittsburgh, Katz School of Business; Stanford University, School of Law; and the International Institute of Research and Asset Allocation Studies. As far as my background goes, I, Juan N. Babauta, am a former governor; a college instructor; a health administrator; a Washington representative; a publisher; a member of the 902 Talks; a member and chairman of the PSS Board of Education and a member and chairman of the NMC Board of Regents. Like Juan S. Torres, I too have college background with Masters degree in health planning and health services administration as well as in political science and American history. In our roles and capacities as governor and lieutenant governor respectively, we both view ourselves in supportive and facilitative relationship, and fittingly so within our respective professional background; technical skill set; and senior decision-maker experience, occupational portfolio and leadership style. Together, our combined and cumulative experiences and established relationships in government (CNMI and federal level) and the business sector make our Team uniquely results-oriented, Action-Team (A-Team), a unique team with complementing private and public sector experience ready to fulfill the mission at hand while serving our citizenry. Babauta-Torres is the CNMI’s real action leadership choice for the Offices of Governor and Lt. Governor. On the skill sets necessary to accomplish the job in one term in office, we gladly bring to the leadership invaluable and multifaceted resources. For example, our combined education and job experiences in government and the private sector are by far un-surpassed and unique in comparison in regards to our college education; our senior executive experiences; and our passion for people first and our commitment for action and results. Our commitment to taking immediate action to alleviate our people’s suffering is inevitably manifested in our pledge to complete the mission knowing it won’t be “a walk in the park”, for this will require a tremendous amount of hard work, determination, sweet and resourcefulness. Nonetheless, fully aware that with your cooperation and collaboration, we will climb mountains, together! We are counting on our collective partnerships!---starting on Day 1, after taking the oath of office. Indeed, our collective experience in government and the local business community has given us invaluable insights and profound knowledge base. These background sets are essential to understanding the Commonwealth’s multi-faceted problems. The knowledge gained from our cumulative professional and political experiences are pivotal in formulating achievable action plans and workable solutions geared to improving the quality of life for all in this great Commonwealth, without the need to first undergo basic on-the-job-training (OJT). Change is, indeed, what we bring and the change of who we are, ready, willing and able to be in service of ALL people!
Posted on: Mon, 20 Oct 2014 11:39:22 +0000
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