Photo: Mark Rabago
Commonwealth of Northern Marianas governor Arnold Palacios has lamented the business sector's seemingly "China-or-bust" stance in reviving the economy in an opinion column in the Saipan Tribune.
He said he appreciates the recent efforts by the Saipan Chamber of Commerce to gather local businesses and decision-makers to put forth ideas to accelerate the Commonwealth's economic recovery, via the 2nd Economic Forum.
But, he wrote, he is disappointed by the narrative that China is the only answer to their current economic struggles.
"This narrative ignores the geopolitical realities in which we live, and which I as governor cannot so easily dismiss," he said.
"It ignores the fraught adversarial relationship between our nation and [China], and the fact that the Mariana Islands sit smack in the middle of a brewing conflict in the Indo-Pacific.
"It ignores lessons we should have learned from our own history."
Palacios added the CNMI's overdependence on Chinese-backed investment runs deep, and goes back decades - from poker to the garment industry, tourism, and casino gaming.
"These investments often perpetuated dependence, so that even when those industries proved detrimental - whether to the social fabric, the environment, or national security - many of our business and political leaders were willing to look the other way.
"And it was hard to imagine alternatives."
He said overdependence on China makes the CNMI vulnerable to external shocks, as well as political and economic coercion by malicious foreign actors, adding that public corruption and financial recklessness have also made the islands vulnerable.
In January, the CNMI had a new program to attract tourists from the People's Republic of China following the Department of Homeland Security approving the interim final ruling establishing the CNMI Economic Vitality & Security Travel Authorization Program.
US lawmakers previously wrote to Homeland Security Secretary Alejandro Mayorkas about the entry of nationals from China into the CNMI through the previous discretionary parole program, calling for the program's abolition.
In October 2023, businesses called on the US Department of Transportation to exempt the territory from the cap on the number of scheduled flights from China to the United States.
Palacios also blamed his predecessor - and his predessor's handling of the American Rescue Plan Act - for the CNMI's current economic woes.
He said the federal recovery funds the previous administration squandered were intended to cushion the impacts of natural disasters and a global pandemic, and the difficult economic challenges that lay ahead.
"For the most part, those funds are gone now," he wrote.
"No other state or territory has blasted through its recovery money so quickly, and so carelessly."
Palacios also said the Commonwealth Ports Authority, under Torres' appointees, chose to hire a Washington, D.C. firm at $1,000 an hour to lobby for unlimited flights from mainland China, while also at the same time squeezing remaining airlines servicing the CNMI by increasing fees.
Nonetheless, the CNMI government's chief executive implored the business community, which also included the Hotel Association of the Northern Mariana Islands, to work with his administration to find a solution the CNMI's current economic morass.
"I can't stress enough that we're in this together," he said.
"I urge our business community and media partners to recognize that recovery will take time, patience, and collective commitment.
"Yes, [China] is a significant source market for tourists and investors, but it is not the only one. We cannot afford to ignore the geopolitical realities and persistent threats associated with [China] that impact our long-term recovery and national security.
"We must diversify our economy beyond a single reliance on one country, and commit as a Commonwealth to developing more stable, reliable markets among our democratic allies in the region.
"We also have to project a positive, unified image of the Marianas to attract visitors and investors globally. Gloomy forecasts and false 'China or bust' narratives are unhelpful."
