CNMI
A sliver of hope amid economic fragility
With economic‘ diversification’ still out of sight, CNMI clings onto tourism
By Jayvee Vallejera
Grandvrio Resort will temporarily close in April after more than four decades of doing business on Saipan. ABC Stores in Garapan closed shop on Dec. 31. DFS Galleria ended 40 years of operations in May last year. Hyatt Regency Saipan ceased operations in 2024. These were among several business institutions that were forced to shut down due to stagnant economic activity in the Northern Mariana Islands.
“ Given the small size and limited resilience of the commonwealth’ s economy, the margin for error has effectively vanished,” the CNMI’ s top political leaders said in a Jan. 6 letter to President Donald Trump.
“ The withdrawal of a single institutional investor or major employer would likely trigger a cascading failure across the private sector, public finances and essential services,” states the letter signed by CNMI Gov. David Apatang, Del. Kimberly King-Hinds, Senate President Karl King-Nabors and Speaker Edmund Villagomez.
Given these bleak circumstances, economists and business leaders are understandably cautious about their forecast on where the CNMI economy is headed in 2026.
But they are keeping their fingers crossed.
“ Many believe that we are at the bottom of economic activity and that the only way is upward,” said Joe Guerrero, president of the Saipan Chamber of Commerce.
He predicts the CNMI’ s economic tide to turn on two fronts: a slight recovery or a moderate contraction.
The chamber is working with the current administration on economic recovery solutions.“ This offers a lot of hope and cautious optimism,” he said.
CJ Bermudes Jr., executive director of the Governor’ s Council of Economic Advisers, described the CNMI’ s outlook for 2026 in two words:“ cautious recovery.”
While tourism remains the CNMI’ s main economic driver, Bermudes acknowledged the industry’ s volatility, which causes uncertainty.“ We don’ t want to put our eggs in one basket, and we’ re looking to diversify,” he said.
Derek T. Sasamoto, executive director of the Commonwealth Economic Development Authority, said the agency has made significant strides in attracting new industries and investment aimed at diversifying the CNMI economy while supporting tourism.
He said CEDA is promoting the CNMI to potential investors as an ideal manufacturing hub, strategically located to enable access to the U. S. market while remaining close to Asian production centers.“ We are working closely with potential investors to establish high-tech manufacturing operations in the Marianas and have been working with and supporting potential partners,” he said.
Guerrero, however, is not too fired up about any emerging players in the CNMI economy. Any actions by these
The once vibrant district of Garapan is now a ghost town. Photo by Mar-Vic Cagurangan
new players could create a ripple effect of optimism and inject small amounts that could spur some economic activity, but it is unlikely to affect the broader economy, he said.
He noted that some of the proposed new companies are still in their early stages, and any impact will not be felt until 2027 or 2028 at the earliest. The planned Google data center on Tinian, for example, is still under development and any economic impact is still unclear at this stage.
Sasamoto said CEDA is working with prospective players as they set up businesses in the CNMI.
As for a proposal to commercially lease the CNMI’ s outer continental shelf for seabed mining, Bermudes said the proposed venture would not yield any revenue for the CNMI.
Speaking at a December forum hosted by the Northern Marianas College, Bermudes said U. S. territories have no automatic claim to revenues from seabed mining because the proposed sites are considered exclusive economic zones of the United States.
Other industries that are beginning to attract attention in the CNMI are value-added manufacturing, light manufacturing, financial services and tech services, which could signal new or emerging industries.
“ Overall, it is still too early to tell how this will shape economic diversification, but it is clear that some diversification is taking shape,” Guerrero said.
Guerrero’ s sentiment mirrors that of the CNMI’ s top elected leaders.
“ The CNMI does not have the runway required for long-term diversification strategies, gradual market development, or the slow construction of local or federal incentive programs,” they stated in their letter to Trump.“ Those efforts remain important, but they will not prevent imminent harm or avert systemic failure in the near term.”
CNMI officials noted that the commonwealth has worked with federal partners to pursue every available local option.“ At this stage,” they added,“ the remaining actions capable of producing immediate impact, without new cost to the CNMI or U. S. taxpayers, are those that remove federal constraints currently suppressing economic recovery.”
Still hoping to resuscitate tourism, the elected leaders have asked the Trump administration to restore the CNMI’ s exemption from the China flight restrictions, include the Philippines in the visa waiver program and help boost Asian flights to the CNMI through Washington’ s new trade treaties with Japan and South Korea.
“ We believe that everyone is on board that this is a good step forward and that we need those flights,” Bermudes said.
The late governor, Arnold I. Palacios,
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