Commonwealth of the Northern Mariana Islands

The reporting year began auspiciously when it was revealed that the government had entered into a contract to manufacture gold coins imitating the 1933 gold double eagle $20 coin, but minted under the authority of the Commonwealth of the Northern Mariana Islands (CNMI). It was being touted as legal tender in the commonwealth and advertised for sale as such in the National Collectors Mint and Coin World Magazine. The attorney general of New York entered into the fray by getting an injunction against the company on the basis of false advertising. One of the main selling points was that the coin was minted with silver that came from a safe opened in the ruins of the World Trade Center in 2001. In fact, the Northern Marianas has no authority to issue legal tender. Although the government had already received some $110,000 in royalties from sales of these "unusual souvenirs," the company was forced to offer refunds to all buyers and its contract was canceled by the governor after extensive negative publicity.

The worldwide fuel crisis had some major consequences in the commonwealth. In October 2004, gas prices jumped to $2.60 a gallon. By June 2005, prices had reached $2.78 a gallon for regular and over three dollars a gallon for diesel. There was an immediate howl of protest from the drivers in the commonwealth, but the worst was yet to come. The Commonwealth Utility Corporation (CUC) was unable to make purchases from Mobil Oil for the Saipan, Tinian, and Rota power generators because of a cash shortage. Ideas about who was responsible ranged from the governor (who was accused of not paying government utility bills), to CUC mismanagement, to the legislature's failure to make appropriations to cover fuel costs. May through July 2005 saw a series of crises, including some power outages when Mobil Oil refused to deliver fuel without cash payments. Although money for the emergency payments was always found at the last moment, the government reportedly owes Mobil millions of dollars. As a result, the utility corporation attached a surcharge of 3.5 cents per kilowatt-hour on all utility bills, effectively a 30 percent increase in utility costs, particularly electricity. During his State of the Commonwealth message in May 2005, the governor described the economy of the commonwealth as "still pretty darned good," but went on to declare a ninety-day state of emergency and assumed direct control of the utility corporation. Former CUC Director Ramon Guerrero (Kumoi) was appointed special assistant for utilities and took over line management from the board of directors.

In June 2005 Japan Airlines announced that it would terminate all airline service between the commonwealth and Japan as of 1 October 2005, except for possible charter services. The company cited deteriorating economic conditions, including increased fuel costs and low prices charged by travel agents for tickets to Saipan. This is a serious blow to the commonwealth's major industry, since Japan Airlines carries about 70 percent of the Japanese tourist traffic. Northwest Airlines indicated that it would pick up the slack on some effected routes but would be unable to secure additional airport slots to take over the Tokyo traffic.

Late in 2004 Governor Juan N Babauta was able to secure an agreement with mainland China designating the commonwealth as an "Approved Destination Site." This allows the commonwealth to recruit tourists from mainland China under certain conditions. All tourists approved for entry by CNMI immigration authorities must be guaranteed to return to China. Initially, only two companies were allowed to act as travel agents inChina—Century Travel, owned by Tan Holdings, and Dynasty Travel, owned by the Tinian casino. A third company was allowed in later on. Each agency must put up a special escrow fund of about $500,000 to guarantee the return of tourists after the three-day group tours are completed. Chinese tourism is getting mixed reviews from both sides. The Chinese who visit the Marianas are concerned about the lack of Chinese-language materials and guides, as well as a requirement that they travel in groups. From the...