Commonwealth of the Northern Mariana Islands

Over the course of the year under review, events in the Commonwealth of the Northern Mariana Islands spiraled almost out of control. The problems involved everything from the general economy, public utilities, public health, and education, to social issues and the environment. The garment factories have been closing at a rapid rate, and tourism has not yet recovered from the cessation of the Japan Air Lines service between Japan and Saipan. Many of these issues are of extreme urgency and will have long-term consequences.

Forces affecting developments in the commonwealth include the US government's concerns about federalization of the minimum wage and immigration, the transfer of eight thousand marines from Okinawa to Guam, global warming, Pacific airline schedules and routes, and the hopes and desires of thousands of migrant contract workers to obtain free access to the United States. For their part, Islanders—who have felt impotent in the face of a range of external forces and who fear losing political control—were dismayed by the perceived insensitivity of the authorities in Washington DC and are desperate to hold on to a way of life that is fast disappearing.

The closure of the Japan Air Lines service between Japan and Saipan in October 2006 eliminated about 40 percent of the tourist traffic on that route. Although both Continental and Northwest restructured their routing (in some cases using smaller aircraft to open routes and schedules to and from Japan), this did not make up for the overall loss of Japanese traffic.

Tourist arrivals over the period under review were running around 400,000, compared to the peak of 750,000 in 1997. Hotel room rates were down, which is good for tourists but shrinks the 10 percent room tax, which constitutes a significant portion of government revenues. Some hotels have closed off wings and put their workers on part-time.

Starting in January 2005, the removal of restrictions on trade by the World Trade Organization made Saipan noncompetitive for the international garment market. Factories began closing and, as of this writing, continue to do so. The pending federally mandated increase in minimum wage will make it impossible for the factories to adapt and remain on the island. User fees, excise taxes, and income taxes generated by the industry have dried up. During the peak years, the commonwealth annual budget was well above $250 million. A year after Governor Ben Fitial took over, it was $160 million and falling. It used to be that the garment industry contributed about $140 million to the commonwealth tax base, with most of the rest coming from tourism-related taxes and fees. As of this writing, only about ten of the original thirty-five factories remain open, with only a few thousand active employees.

The side effects of the garment closures include repatriation of contract workers, closure of many ancillary retail outlets, and a possible increase in the number of prostitutes, many of whom are out-of-work seamstresses who are reluctant to return to China. A small number of former garment workers from China have applied for political asylum. The exact number is not clear because the attorney general's office does not release this type of information. The group is made up primarily of followers of the Falun Gong meditation movement, which is outlawed in China.

At the State of the Commonwealth message in April 2007, the governor outlined the condition of the Commonwealth Utilities Commission, which manages all power, water, and sewage utilities. He reported that none of the generators have been repaired recently and all of them should be replaced. He also noted that the utility rates traditionally paid do not even come close to meeting actual production costs, given current fuel prices. All government agencies now have to meet utilities costs from their own operating budgets. Utility rates have doubled, and in some cases tripled, since the new administration announced power rates would be linked to the cost of fuel. It is not unusual for individual households to pay between $1,000 and $2,000 a month for utilities. Everyone is scrambling to...