Pacific Islands Development Program, East-West Center

With Support From Center for Pacific Islands Studies, University of Hawai‘i

The Contemporary Pacific
Volume 24, Number 1, Spring 2012, pp. 156-163

Micronesia in Review: Issues and Events, 1 July 2010 – 30 June 2011

Commonwealth of the Northern Mariana Islands

Samuel F. McPhetres

The fiscal condition of the government of the Commonwealth of the Northern Mariana Islands (CNMI) has been rapidly declining since the garment factories on Saipan began shutting down in 2005 and the last one closed its doors in 2009. In the exhilarating days of the late 1990s, with thirty-five garment factories and 700,000 tourists a year, annual government revenues reached $250 million. It is anticipated that revenue this fiscal year (Oct 2011-Sept 2012) will be down to somewhere between $92 million and $102 million.

As could be expected, adjusting to such a reduced revenue stream is a very difficult thing to do after having lived so comfortably. As a result, a great deal of time and rhetoric has been devoted to the issue of whether [End Page 156] casinos should be allowed on Saipan. When the government was unable to settle debates over the fiscal year 2011 budget (Oct 2010-Sept 2011) by the 30 September 2010 deadline, it was completely shut down in compliance with a constitutional amendment recently approved by the voters that "states that the government may not draw funds from the general fund, with the exception of certain essential services, if no appropriations act is in effect" by the beginning of the fiscal year (Saipan Tribune, 1 Oct 2010). Since the legislature did not pass the budget before 1 October, all government offices except for essential services were closed while the House and the Senate worked out their differences. During that period, some members of the House of Representatives threatened that if the Senate did not join them in approving casinos on Saipan as a revenue measure, the House would not consider any bill emanating from the Senate. In response, the Senate refused to pass bills sent to them by the House of Representatives; in addition, because the governor was siding with members of the House, the Senate refused to hold advice and consent hearings for gubernatorial appointees. Public pressure was the only thing that got members of the legislature to pass a budget two weeks into fiscal year 2011, which allowed the government to get back into full operation. The Senate stood its ground on being anti-casino, which should come as no surprise since both Tinian and Rota have casinos (struggling just to stay alive) that would be threatened by additional casinos on Saipan. Most direct flights from Japan to Saipan, Tinian, and Rota have been discontinued. The casino hotel in Tinian owes $30 million in back taxes to the commonwealth government and, unless there are some immediate changes in airline services, the Rota resort casino will probably not last another six months.

Largely because of the increased costs of doing business, several airlines have canceled flights from Japan and have reduced flights to and from other destinations. On the other hand, there are two new ventures that have yet to prove themselves viable. Fly Guam has been operating charter flights to and from Hong Kong via Saipan three times a week. They plan to inaugurate flights to Australia and are exploring possible routes from central Russia. At the present time they are only flying one 240-seat Boeing 737 but are expecting to acquire a second plane in the near future. During April and May 2011, Fly Guam was offering discount rates of $450 for return flights between Saipan and Hong Kong, with an additional 25 percent discount available for senior citizens.

Every service on Rota and on Tinian is in crisis, creating an economic disaster for the two islands. Existing hotels are struggling to survive, with many people leaving the islands permanently. At the same time, a brand-new luxury resort is being constructed by Triple J in Chalan Kanoa on the beach in southwest Saipan, using pre-stressed reinforced concrete slabs to create the walls.

Several other companies, including Korean investors, have expressed interest in reviving La Fiesta Mall in San Roque; according to government estimates, it would cost upward of $5 million just to rehabilitate the structure. [End Page 157] Other investors, including two casino developers, are trying to revive their construction permits to build on Tinian.

Federal laws taking over immigration and raising the minimum wage have had major impact on the growth of just about everything in the commonwealth. The Department of Homeland Security's Customs and Border Protection agency has taken over airport security and in all too many cases has wound up alienating many tourists and returning residents. Congressional delegate Gregorio Kilili Sablan has filed a complaint regarding this matter with the secretary of the Department of Homeland Security in Washington dc.

A program by the Department of Public Works to install poles for power lines along the roadside, all the way from the Last Command Post to just before Banzai Cliff, is intended to supply power to the Veterans Cemetery and a new public cemetery that is under construction. A citizens group calling themselves the Friends of Marpi has succeeded in blocking the completion of the power pole project, citing the degradation of the Marpi area. The group is concerned about the visual impact of the poles on the tourist experience, the violation of historic preservation regulations, and the lack of a public hearing before the installation began. The Department of Public Works has been ordered to cease and desist installation until a trial can be held in early 2012.

The mayor of the Northern Islands has scheduled a Northern Islands Development Summit in September 2011 designed to create a master plan for the resettlement of the islands north of Saipan. This plan includes homesteading, infrastructure development, transportation, and other exigencies. Plans are also underway to explore the possibilities of cashing in on the pozzolan deposits on Pagan, which may still have some commercial value. (Pozzolan is a byproduct of volcanic eruptions. It occurs fairly rarely; the only other known deposit is at Mount Vesuvius in Italy. Its primary use is as an additive to asphalt for greater strength. Thousands of tons of pozzolan are estimated to be sitting on Saipan but gradually depreciating in value because of the erosion from rainfall. There has been no sign of commercial interest in the deposit over the past several years.) Ecotourism is also being explored. Further, it appears that the US military may be interested in utilizing Pagan for military exercises. If this is the case, and the people agree to such use, the military will have to compensate the people for the loss of other development opportunities.

Innovation in agriculture is now becoming fairly common. Entrepreneur Tony Pellegrino has opened a very successful shrimp farm on his property in Saipan and is already exporting shrimp to Japan, Guam, and other destinations. This effort is part of an overall plan to develop agricultural exports as well as to replace imported food items. Pellegrino intends to expand the market by opening a new airline called Cargo Air Bridge. This airline would be a public corporation (with shares available to the citizens of the commonwealth) that could fly agricultural goods from Saipan, Tinian, and Rota to Guam on a regular basis. Because the agricultural [End Page 158] producers on these islands would have to guarantee quality and quantity, steps are being taken to set up a farmers' cooperative.

After a wait of a year and a half, the Western Association of Schools and Colleges has moved the Northern Marianas College up one step from "show cause" to "probation" status (Marianas Variety, 1 July 2011). This means that while the college will have to work to improve certain areas, it does not have to worry about the imminent loss of accreditation. Lorraine Cabrera, the adult basic education director, has been interim president of the college for a year and a half. A new president, Dr Sharon Hart from North Dakota, has finally been selected and was slated to arrive in Saipan in early July 2011 (Marianas Variety, 27 May 2011). This will contribute greatly to the college's efforts to maintain and improve accreditation standards since the firing of Dr Carmen Fernandez and the college's subsequent year and a half without a full-time head. Former President Fernandez's lawsuit against the college and the Board of Regents in relation to her dismissal is still pending but may come up for court hearing in September.

Austerity measures earlier applied to all CNMI government employees will affect the college beginning in the fall semester, which commences in August 2011. This means a 10 percent pay cut for all faculty and staff and adjustments in the class schedule and student-teacher ratio. Technically, these changes are only supposed to apply until the end of the current fiscal year on 31 September 2011; however, there is no indication that the government's current fiscal situation is going to improve in the near future.

The Salvation Army on Saipan has opened a soup kitchen, rummage sale area, and "drop-in center" to assist the growing number of homeless and unemployed people on the island. Initially, the soup kitchen will be open only on Saturdays; its operations are dependent on voluntary donations from the public. Laundry and shower facilities, however, are available in the drop-in center (Saipan Tribune, 4 May 2011). The homeless represent a cross section of the community and, for one reason or another, many are not eligible for government services or assistance from established charities such as Karidat.

A recently released report from the Government Accountability Office indicates that the recent increases in the minimum wage (from $4.50 to $5.05 per hour) in the commonwealth have resulted in higher unemployment as smaller businesses are unable to pay the higher salaries during the current economic crisis (GAO 2011). The price of gasoline is $4.77 per gallon on Saipan and more than five dollars per gallon on Rota and Tinian. Utilities costs are increasing substantially, and some people are finding it more comfortable to move to the continental United States, where the cost of living is actually lower.

Another result of the economic crisis appears to be a very serious increase in domestic violence and property crimes at all levels of society. Contributing factors are addiction to drugs and to poker gambling, both on the upswing. The attorney general's office recently reported that 50 [End Page 159] percent of the cases it handles involve domestic abuse (ANN 2011).

The privatization of the Commonwealth Health Center, which is supposed to take place on 1 October 2011, is being organized by a special committee appointed by the governor. The healthcare corporation will receive start-up funds in the amount of $5 million. It is expected that health services will improve greatly with this effort, although there is no guarantee.

The much-touted Guam military buildup, involving the transfer of 8,000 US Marines, dependents, and staff personnel from Okinawa to Guam, may be severely delayed. A group of three US senators visited Tinian and Okinawa and reported that the transfer program is totally ad hoc and that it is impossible to tell exactly how much money is going where and what the development plan is. In addition, the series of disasters in Japan in March 2011—the earthquake, tsunami, and nuclear meltdown—has made it much more difficult for Japan to undertake and share the cost of the relocation. Some contracts, in preparation for the transfer of troops, have already been made on Guam, but the anticipation of billions of dollars worth of lucrative construction contracts may have to be completely rethought.

Governor Benigno Fitial has decided that it would be better for him to rejoin the national Republican Party rather than continue as the titular head of the Covenant Party. When he announced this switch to the legislature and the public, he offered to endorse Lieutenant Governor Eloy Inos as his preferred replacement after his current and final term in office ends. This offer, however, was contingent on the lieutenant governor following the governor's example and giving up the Covenant Party in favor of rejoining the Republican Party. His reasoning for this is that the Republicans control the US House of Representatives and he wants to be on the winning side. He also made it clear that he wants all of his Covenant Party mates to follow his lead and join the Republican organization. The leaders of the Republican Party claim that they have over 1,000 names of people ready to transfer their allegiance to the Republicans.

US House of Representatives delegate Gregorio Kilili Camacho Sablan is already preparing to run for his third term in 2012. He ran a very successful campaign last November against three rivals and has become the ranking minority member of the House Subcommittee on Fisheries, Wildlife, Oceans and Insular Affairs. He continues to run as an independent, aligning himself with the Democratic side of the House of Representatives.

The biggest surprise in this legislative session came with the announcement by long-term politician, legislator, and one-time lieutenant governor Diego Benavente that he was intending to resign his position of minority leader in the CNMI House of Representatives at the end of July. There is much speculation as to why he chose this particular time since his term does not expire until November 2012. His only public statement related to this decision was that he wanted to be able to spend more time with his family.

Several bills have been introduced to allow casinos on the island of [End Page 160] Saipan. Some of these bills have been classified as commonwealth bills, requiring the approval of both houses, but most of them have been Saipan local delegation bills that require only the approval of the Saipan delegation, both senators and representatives.

Another bill, introduced by Representative Stanley Torres, is pending final action. It would create a new Marianas Political Status Commission to explore the current relationship between the Marianas and the federal government. This would include the possibility of terminating the commonwealth relationship and opting instead for independence or free association. A public hearing was held, and most of the comments in favor of the bill were complaints about federal interference in local affairs, real or imagined.

Yet another bill, introduced by Representative Joseph Palacios, would allow the people of the Marianas to decide if they wanted to join with Guam under a new, undefined political status. A Northern Marianas College Current Issues class was tasked with running an informal and unofficial public opinion poll during the month of May. The results showed that Saipan as a whole was against unification but that the 18- to 25-year-old group was in favor of the idea because of the perceived higher standard of living in Guam. The older people rejected the idea because of the many years Guam has dismissed the Northern Marianas' appeals for reunification and because of the fear that the Northern Marianas might become a small principality of the larger Guam. A similar study is being undertaken by the University of Guam, but no findings have been made available so far. The results from the NMC poll from Rota indicated approval of reunification with Guam. Unfortunately, Tinian could not be polled because of logistical complications.

The Manta Ray Band of Saipan Southern High School has done it again! After successful concerts at the Kennedy Center in Washington DC and the Sydney Opera House in Australia, this highly talented group has been invited to play at the Summer Olympics in London in 2012.

The long-awaited Saipan municipal dog control program is now underway. It started with owners licensing their dogs with members of the Saipan Mayor's staff. When the licensing process is completed, workers will begin collecting stray dogs from the streets and abandoned properties. A dog pound is being prepared at Lower Base. It has been estimated that there could be as many as 2,000 feral dogs on Saipan; this has been a problem since German times, when Governor Georg Fritz issued a bounty for every wild dog killed. Since feral dogs tend to run in packs and have attacked bicycle riders, joggers, and children, the municipal dog program will be a boon not only to the residents but also to tourists and visitors, especially those who participate in popular races such as the Tagaman, the triathlon, and others.

Indigenous culture centers are being established on all three main islands of the Marianas. With financial help from the Administration for Native Americans, these centers are designed to preserve and promote indigenous cultures, including traditional medicine, and their practitioners. [End Page 161]

Work is currently underway to establish a management team for the Marianas Trench Marine National Monument. A team consisting of local supporters of the monument, the National Oceanic and Atmospheric Administration, the military, and other interested government agencies will meet for the first time in July 2011 to set up a plan for the management of the monument.

The Commonwealth Council for the Humanities, in cooperation with the Historic Preservation Office, has recently completed a World War II Marine Heritage Trail, which allows tourists and residents alike to swim in the lagoon and visit various World War II relics, including ships, airplanes, landing craft, and other detritus left behind after the invasion of Saipan in 1944. The sites are all marked with underwater explanatory signage and directions to the next stop. A waterproof map is available. This particular site was featured in the July 2011 issue of Archaeology Magazine, which contained stories about the archaeology of World War II.

The Historic Preservation office and the Commonwealth Council for the Humanities are now planning a similar heritage trail on dry land through the village of Garapan, which would highlight historic buildings and sites ranging from the prehistoric to the Japanese era.

Northern Marianas has joined Palau in banning the fishing, sale, and possession of shark fins. This is a growing movement to preserve one of the ecological and environmental keystones of our oceans.

The year under review closed in a very dismal state. On 25 May at 6:30 AM, Faloma Luhk (age ten) and her younger sister Maleina (age nine) vanished without a trace from a school bus stop near the Santa Lourdes shrine. The grandparents with whom they were living while their mother worked in Guam and their father lived in Pohnpei were not aware that there was anything wrong until the girls did not return home on the regular bus in the afternoon. School policy is that absences of less than two days are not reported to the parents or guardians.

The grandparents phoned the authorities as soon as they realized the girls were missing, initiating a major search that would go on for more than a month. In addition to local law enforcement agencies, theFBI sent dozens of agents from Hawai'i to assist. Over the following weeks, hundreds of local residents joined in searching the tunnels and caves all over the island. No witnesses were found and no significant clues were unearthed. A search dog was brought in from Hawai'i, but after several days without results, the dog was deemed unable to fully function because of the humidity and was returned to Hawai'i.

As of this writing (5 July 2011), there have been no clues of any kind, and no suspects have been identified. The FBI has withdrawn all but its local agents, and police are now only acting on tips and leads. There have been a number of prank calls to the grandparents and to the police, but nothing worth following up. Department of Public Safety Commissioner Ramon "Ray" Mafnas admitted that one officer, believed to have some kind of relationship with the family of the missing girls, has refused to take a lie[End Page 162] detector test related to the investigation. This event has affected the whole of the Marianas because it appears that the girls were abducted by somebody they knew; there is no indication of any kind of struggle, and other students approaching the bus stop found it empty when they got there.

Samuel F. McPhetres  

Samuel F. McPhetres (MA 1962, Centre Européen Universitaire, Nancy, France) is a member of the Social Science and Fine Arts Department of Northern Marianas College in Saipan. Following several years of international work with the Peace Corps, he settled in the Northern Marianas to work for the trust territory government in political education, creation and management of the trust territory archives, and coordination of international organizations. Besides contributing the TCP political review of the Commonwealth of the Northern Mariana Islands since this journal's inception, he has written a civics textbook for Northern Marianas secondary schools and coauthored a history textbook for the Republic of Palau.


ANN, Australian Network News website. 2011. Domestic Violence Makes up Bulk of CNMI Court Cases. 20 April. [accessed 1 September 2011]

GAO, US Government Accountability Office. 2011. American Samoa and Commonwealth of the Northern Mariana Islands: Employment, Earnings, and Status of Key Industries since Minimum Wage Increases Began. July. Washington, DC: GAO.

Marianas Variety. Daily. Saipan.

Saipan Tribune. Daily.

Go back to Pacific Islands Report