Economy of the Northern Mariana Islands
Encyclopedia
The economy
of the Northern Mariana Islands
benefits substantially from financial assistance from the United States
. The rate of funding has declined as locally generated government revenues have grown. An agreement for the years 1986 to 1992 entitled the islands to $228 million for capital development, government operations, and special programs. Since 1992, funding has been extended one year at a time. The Commonwealth received funding of $11 million for infrastructure
, for FY96/97 through FY02/03, with an equal local match.
industry, which now employs about half the work force. Japanese
and Korean
tourists predominate. The agricultural
sector is of minor importance and is made up of cattle
ranches and small farms producing coconut
s, breadfruit
, tomato
es, and melon
s.
with employment of 12,000 mostly Chinese
workers and shipments of $1 billion to the United States in 1998 under duty and quota exemptions. This production is extremely controversial because goods produced in the North Marianas can be labelled "Made in the U.S.A.", although not all American labor laws apply to the commonwealth leading to what critics charge as "sweatshop conditions" for imported, mostly Asian, workers.http://www.hartford-hwp.com/archives/24/017.html Among other companies, the teen clothing store Abercrombie & Fitch
produces some of their clothing in the Northern Marianas and then sells them for high prices.
The garment industry is changing, though, and many of the garment factories are closing due to the lifting of WTO trade restrictions on Chinese imports. The industry was initially established in the Commonwealth because some U.S. labor and immigration laws do not apply within the CNMI — for example, the CNMI's minimum wage
rate of $3.05 per hour (for most employment positions) is lower than the federal rate, which applies to most other areas of the United States. Additionally, the CNMI retains local control over customs
and immigration
enforcement, unlike in Guam
.
In 2004 — and in response to a long and expensive class action lawsuit brought by garment workers against various clothing manufacturers — a Garment Oversight Board, aimed at protecting workers' rights, was created. These actions have reportedly resulted in improved conditions since the turn of the century.
:
purchasing power parity - $524 million (1996 est.)
note:
GDP numbers reflect US spending
GDP - real growth rate:
NA%
GDP - per capita:
purchasing power parity - $9,300 (1996 est.)
GDP - composition by sector:
agriculture:
NA%
industry:
NA%
services:
NA%
NA%
Household income or consumption by percentage share:
lowest 10%:
NA%
highest 10%:
NA%
Inflation rate (consumer prices):
6.5% (1994 est.)
6,006 total indigenous labor force; 2,699 unemployed; 28,717 foreign workers (1995)
Labor force - by occupation:
managerial 20.5%, technical, sales 16.4%, services 19.3%, farming 3.1%, precision production 13.8%, operators, fabricators 26.9%
Unemployment rate:
14% (residents)
Budget:
revenues:
$221 million
expenditures:
$213 million, including capital expenditures of $17.7 million (1996)
tourism, construction, garments, handicrafts
Industrial production growth rate:
NA%
NA kWh
Electricity - production by source:
fossil fuel:
100%
hydro:
0%
nuclear:
0%
other:
0%
Electricity - consumption:
NA kWh
Electricity - exports:
NA kWh
Electricity - imports:
NA kWh
$1 billion (1998)
Exports - commodities:
garments
Exports - partners:
US
Imports:
$NA
Imports - commodities:
food, construction equipment and materials, petroleum products
Imports - partners:
US, Japan
Debt - external:
$NA
Economic aid - recipient:
$21.1 million (1995)
1 United States dollar (US$) = 100 cents
Exchange rates:
US currency is used
Fiscal year:
1 October - 30 September
Economics
Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...
of the Northern Mariana Islands
Northern Mariana Islands
The Northern Mariana Islands, officially the Commonwealth of the Northern Mariana Islands , is a commonwealth in political union with the United States, occupying a strategic region of the western Pacific Ocean. It consists of 15 islands about three-quarters of the way from Hawaii to the Philippines...
benefits substantially from financial assistance from the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
. The rate of funding has declined as locally generated government revenues have grown. An agreement for the years 1986 to 1992 entitled the islands to $228 million for capital development, government operations, and special programs. Since 1992, funding has been extended one year at a time. The Commonwealth received funding of $11 million for infrastructure
Infrastructure
Infrastructure is basic physical and organizational structures needed for the operation of a society or enterprise, or the services and facilities necessary for an economy to function...
, for FY96/97 through FY02/03, with an equal local match.
Tourism
A rapidly growing chief source of income is the touristTourism
Tourism is travel for recreational, leisure or business purposes. The World Tourism Organization defines tourists as people "traveling to and staying in places outside their usual environment for not more than one consecutive year for leisure, business and other purposes".Tourism has become a...
industry, which now employs about half the work force. Japanese
Japanese people
The are an ethnic group originating in the Japanese archipelago and are the predominant ethnic group of Japan. Worldwide, approximately 130 million people are of Japanese descent; of these, approximately 127 million are residents of Japan. People of Japanese ancestry who live in other countries...
and Korean
Korean people
The Korean people are an ethnic group originating in the Korean peninsula and Manchuria. Koreans are one of the most ethnically and linguistically homogeneous groups in the world.-Names:...
tourists predominate. The agricultural
Agriculture
Agriculture is the cultivation of animals, plants, fungi and other life forms for food, fiber, and other products used to sustain life. Agriculture was the key implement in the rise of sedentary human civilization, whereby farming of domesticated species created food surpluses that nurtured the...
sector is of minor importance and is made up of cattle
Cattle
Cattle are the most common type of large domesticated ungulates. They are a prominent modern member of the subfamily Bovinae, are the most widespread species of the genus Bos, and are most commonly classified collectively as Bos primigenius...
ranches and small farms producing coconut
Coconut
The coconut palm, Cocos nucifera, is a member of the family Arecaceae . It is the only accepted species in the genus Cocos. The term coconut can refer to the entire coconut palm, the seed, or the fruit, which is not a botanical nut. The spelling cocoanut is an old-fashioned form of the word...
s, breadfruit
Breadfruit
Breadfruit is a species of flowering tree in the mulberry family, Moraceae, growing throughout Southeast Asia and most Pacific Ocean islands...
, tomato
Tomato
The word "tomato" may refer to the plant or the edible, typically red, fruit which it bears. Originating in South America, the tomato was spread around the world following the Spanish colonization of the Americas, and its many varieties are now widely grown, often in greenhouses in cooler...
es, and melon
Melon
thumb|200px|Various types of melonsThis list of melons includes members of the plant family Cucurbitaceae with edible, fleshy fruit e.g. gourds or cucurbits. The word "melon" can refer to either the plant or specifically to the fruit...
s.
Textile industry
Garment production had until recently been the fastest growing industryIndustry
Industry refers to the production of an economic good or service within an economy.-Industrial sectors:There are four key industrial economic sectors: the primary sector, largely raw material extraction industries such as mining and farming; the secondary sector, involving refining, construction,...
with employment of 12,000 mostly Chinese
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
workers and shipments of $1 billion to the United States in 1998 under duty and quota exemptions. This production is extremely controversial because goods produced in the North Marianas can be labelled "Made in the U.S.A.", although not all American labor laws apply to the commonwealth leading to what critics charge as "sweatshop conditions" for imported, mostly Asian, workers.http://www.hartford-hwp.com/archives/24/017.html Among other companies, the teen clothing store Abercrombie & Fitch
Abercrombie & Fitch
Abercrombie & Fitch is an American retailer that focuses on casual wear for consumers aged 18 to 22. It has over 300 locations in the United States, and is expanding internationally....
produces some of their clothing in the Northern Marianas and then sells them for high prices.
The garment industry is changing, though, and many of the garment factories are closing due to the lifting of WTO trade restrictions on Chinese imports. The industry was initially established in the Commonwealth because some U.S. labor and immigration laws do not apply within the CNMI — for example, the CNMI's minimum wage
Minimum wage
A minimum wage is the lowest hourly, daily or monthly remuneration that employers may legally pay to workers. Equivalently, it is the lowest wage at which workers may sell their labour. Although minimum wage laws are in effect in a great many jurisdictions, there are differences of opinion about...
rate of $3.05 per hour (for most employment positions) is lower than the federal rate, which applies to most other areas of the United States. Additionally, the CNMI retains local control over customs
Customs
Customs is an authority or agency in a country responsible for collecting and safeguarding customs duties and for controlling the flow of goods including animals, transports, personal effects and hazardous items in and out of a country...
and immigration
Immigration
Immigration is the act of foreigners passing or coming into a country for the purpose of permanent residence...
enforcement, unlike in Guam
Guam
Guam is an organized, unincorporated territory of the United States located in the western Pacific Ocean. It is one of five U.S. territories with an established civilian government. Guam is listed as one of 16 Non-Self-Governing Territories by the Special Committee on Decolonization of the United...
.
In 2004 — and in response to a long and expensive class action lawsuit brought by garment workers against various clothing manufacturers — a Garment Oversight Board, aimed at protecting workers' rights, was created. These actions have reportedly resulted in improved conditions since the turn of the century.
GDP
GDPGross domestic product
Gross domestic product refers to the market value of all final goods and services produced within a country in a given period. GDP per capita is often considered an indicator of a country's standard of living....
:
purchasing power parity - $524 million (1996 est.)
note:
GDP numbers reflect US spending
GDP - real growth rate:
NA%
GDP - per capita:
purchasing power parity - $9,300 (1996 est.)
GDP - composition by sector:
agriculture:
NA%
industry:
NA%
services:
NA%
Income
Population below poverty line:NA%
Household income or consumption by percentage share:
lowest 10%:
NA%
highest 10%:
NA%
Inflation rate (consumer prices):
6.5% (1994 est.)
Labor
Labor force:6,006 total indigenous labor force; 2,699 unemployed; 28,717 foreign workers (1995)
Labor force - by occupation:
managerial 20.5%, technical, sales 16.4%, services 19.3%, farming 3.1%, precision production 13.8%, operators, fabricators 26.9%
Unemployment rate:
14% (residents)
Budget:
revenues:
$221 million
expenditures:
$213 million, including capital expenditures of $17.7 million (1996)
Industry
Industries:tourism, construction, garments, handicrafts
Industrial production growth rate:
NA%
Electricity
Electricity - production:NA kWh
Electricity - production by source:
fossil fuel:
100%
hydro:
0%
nuclear:
0%
other:
0%
Electricity - consumption:
NA kWh
Electricity - exports:
NA kWh
Electricity - imports:
NA kWh
Exports/Imports
Exports:$1 billion (1998)
Exports - commodities:
garments
Exports - partners:
US
Imports:
$NA
Imports - commodities:
food, construction equipment and materials, petroleum products
Imports - partners:
US, Japan
Debt - external:
$NA
Economic aid - recipient:
$21.1 million (1995)
Currency
Currency:1 United States dollar (US$) = 100 cents
Exchange rates:
US currency is used
Fiscal year:
1 October - 30 September