Background
On the economic front, the Northern Mariana Islands faces many problems that were present in the 2022 general election. The territory is still attempting to recover after the COVID-19 Pandemic and its aftermath caused a complete collapse of the local tourism industry, creating a massive economic burden on the territory. Airlines have sent mixed signals on tourism recovery. Asiana Airlines suspended its flights and switched to a charter schedule until June 2024, citing low demand and the Commonwealth Ports Authority (CPA) adoption of a 90 percent hike in landing fees and a 79 percent increase in terminal rental fees back in September 2023. [2] [3] Jeju airlines also expressed concerned about the airport landing fees. [4] Pressure from airlines was enough to convince the CPA to lower airport fees, announced on May 10, 2024. [4] Despite this, on June 7, 2024, Asiana Airlines announced the closure of its CNMI operations by the end of June. [5] However, United Airlines and Hong Kong Airlines show positive attitudes towards economic recovery. Dan Weiss, United Airlines managing director for Global Government and Regulatory Affairs, stated that United is pleased with the performance of their “relatively new” Saipan-Tokyo Narita service. [6] After suspending its flights from Hong Kong to Saipan in 2019, Hong Kong Airlines announced that it would reintroduce its exclusive direct route to Saipan. [7] Despite confidence from Hong Kong Airlines, the worsening relations between the United States and China signals that Chinese and Hong Kong tourists, once a cornerstone of the local tourism industry, will likely not return to the levels seen before the COVID-19 Pandemic. [8] Less tourists from China will likely negatively impact the economy because, as Marianas Visitors Authority board chair Gloria Cavanagh points out, based on numbers the MVA has collected, Chinese tourists coming into the CNMI outspend their Korean counterparts by multiple times. [9] However, it appears that Chinese tourists, despite tensions with the United States, as well as Japanese and Korean tourists, despite their ongoing economic woes with a weaker Yen and Won compared to the Dollar, continue to come to the CNMI as the number of tourists have increased in January, [10] February, [11] and March [12] of 2024 compared to the same months in 2023, though still below pre-pandemic levels. [10] [11] [12] The stronger Dollar and weaker Yen and Won will still pose issues for the CNMI as competition from countries in East and Southeast Asia become more attractive to Korean and Japanese tourists. [13]
On April 29, 2024, Hyatt Regency Saipan announced that it was ceasing operations in the CNMI starting June 30, the same time as Asiana Airlines will end its services. [14] The news shocked and concerned the CNMI, with Governor Arnold Palacios stating that he and his administration were not notified before the announcement. [15] The halting of operation by both Hyatt Regency and Asiana Airlines signals that the CNMI economy is still struggling heavily, and there are now heightened concerns of other companies pulling the plug on the CNMI.
The declining population has led to lower tax revenue and worse social services and economic conditions, leading to more people leaving and creating a cycle that is difficult to break and is placing pressure on the local government, especially on the incumbents. [16]
A defining aspect of Governor Arnold Palacios' Administration is austerity. [17] [18] On April 24, 2023, the Palacios Administration placed some executive branch employees on a 72-hour work schedule, reduced from 80 hours. [17] On October 4, 2023, Palacios reduced the work schedule to 70 hours. [19] Governor Palacios and his administration, through Directive 2024–1, also continued "Austerity Monday," which began in October 2020 when his predecessor, former Governor Ralph Torres, implemented it. [20] [21] Austerity Monday calls for the government to be closed every Monday following a payday or on a Tuesday if that Monday happens to be a holiday. [21] The Commonwealth Ports Authority board also adopted an eight-hour cut for all CPA employees and suspended its airline incentive program. [2] [3] Palacios and his coalition government implemented these measures to address fiscal issues [22] [18] but have placed significant strain on the local economy and could pose an issue to the current governing coalition of Independents and Democrats.
The mixed recovery, coupled with the strong push for austerity by the Palacios Administration, has created discontent among local small businesses, many of whom have voiced that the government could be doing more to support the local economy and its fledgling and crippled businesses. [23] [24] [25] The economic situation has created a scenario where locals, especially government officials and small businesses, watch for any docking cruise ship whose passengers disembark to spend and help prop up the local economy. [23] [26] [27]
Since the 2022 general election, the Northern Mariana Islands House of Representatives has comprised mainly independents, with thirteen seats compared to the three held by the Republicans and the four held by the Democrats. [28] [29] The Northern Mariana Islands Senate has Independents as the second largest bloc with three seats, behind the Republicans, who hold four seats, but ahead of the Democrats, who hold two seats. [30] [31] This is a rarity in the United States, where the Democrats and Republicans rarely ever face a unified independent bloc or viable third parties, and places the Northern Mariana Islands, which has a recent record of successful third parties and independent majorities, [32] [33] [34] in a unique politician position.
The CNMI is also witnessing a healthcare system that is inadequate to meet the needs of the territory, with many taking trips to neighboring Guam to obtain the services they need. [35]
