STATE OF GUAM’S ECONOMY
CHAMBER OF COMMERCE
GENERAL MEMBERSHIP MEETING
GOVERNOR FELIX P. CAMACHO
July 30, 2003

Buenas and good afternoon…

The last time I stood before the members of the Guam Chamber of Commerce, I spoke of the difficult budget decisions that we faced as a government… decisions that have affected everyone in our community.

During the seven months that I have been in office, we have already reduced the overall cost just within the Executive line agencies by $15 million dollars and further reductions in FY 2004 of at least $56 million. We implemented a 32-hour workweek and furlough plan… the first time in GovGuam’s history... to keep services open. We left vacant more than 200 hundred positions – in the Executive are working to move another 300 employees off through retirement. Today each agency – autonomous and line--continue to reassess its manpower needs and adjust.

All told, if my cost savings plan is allowed to work… and with the assistance of the Legislature to truly relax the restrictions placed on reorganization and privatization… by September 30th of this year, we will have moved 1,000 employees off of the General Fund. In the Line Agencies alone that is a 15% decrease.

In our autonomous agencies, we are expecting to reduce the overall size of personnel by another 249 by the end of this fiscal year.

Change is something that many people fear… and the government of Guam is not immune to that fear. Often, leaders are faced with strong opposition to their initiatives and react by trying to please those who are disgruntled. But that reaction should never be at the expense of the greater good of our government and our island. We must stay the course in our efforts to make the sweeping changes that we all know are necessary.

The services that the government provided 30 years ago have evolved in importance. 30 years from now, the services we deem vital today will go through the same transformation. Our taxpaying community must have the ability to adjust to what it truly needs rather than being bound be restrictive laws or long standing government services that cripple our ability to make even minor adjustments.

In the next few days I will sign an Executive Order consolidating the government of Guam’s 48 agencies to 12 cabinet agencies. This consolidation is just the first step in moving our government to a smaller, more efficient service provider. Reduction, consolidation and reorganization are only the first few steps in the right direction.

GovGuam’s regulatory function should be limited to ensuring that our quality of life meets or exceed national standards. Today… there are far too many outdated regulations. Those that are vital should be updated to resolve problems, not stop progress and those that are no longer useful should be eliminated.


My Administration is working with the Public Auditor to strengthen and improve government procurement laws, checks and balances and eliminate government waste. As we do this, my message to you is this… all bids, proposals and request for service will be reviewed and awarded based on merit, cost and compliance. There will be no special consideration given to those who were treated unfairly in the past… that double standard would only perpetuate the wrong doings of the past.

The hallmark of my privatization efforts will be free market competition. The best, most cost effective proposal… the one that offers the most long-term benefit will be awarded. And rest assured that procurement under my Administration will be fair and deliberate.

I want to thank the Guam Chamber and Senator Robert Klitzkie for introducing Bill 147 to open up the reorganization process and allow me to exercise my Organic Authority. I ask you to continue fighting any movement to repeal the privatization of services… but more importantly, I ask that you join me in asking for greater flexibility to privatize government-wide.

GovGuam must get out of the business of providing services that private companies here and nationwide deliver with more efficiency, reliability and with better financing.

We are revisiting the terms of the GTA sales package to make it more attractive and realistic. It is time to sell the last publicly owned telephone company in America.

We will work with the CCU to privatize portions of or sell outright the Guam Power Authority and the Guam Waterworks Authority. We will work with the elected school board to outsource services at DOE. We will expand our privatization effort to include landscaping, transportation, the landfill, trash collection, computerization, insurance, and healthcare.

We will privatize the gantry crane operations at the Port Authority of Guam. Private companies will finance the cranes, introduce new technologies and build a highly skilled workforce that can compete with other regional ports. The end result will be improved delivery of goods to Guam’s consumers and other destinations at a more reasonable cost. This is the first in a series of bold steps to privatize the port and create a new industrial center at Apra Harbor to meet the needs of a fast growing maritime industry.

I have also instructed GEDCA and the Chamorro Land Trust Commission to prepare both the existing JFK school site and the Oka Point property for lease to private investors. The development of a convention center and cultural center at the JFK site will provide new visitor attractions and a funding source for new schools including a northern high school.

Leasing Oka point will provide revenues for infrastructure in other land Trust areas, making it more self-sufficient and self-sustaining. Holding on to Government properties is not our trusted duty… allowing them to be developed is.

For this reason I will continue to return unused excess land to original landowners – because land in the hands of government – whether federal or local -- is under-used land. The return expands our tax base, allows you – not the government - to determine the highest and best use of your own private property. The boundaries of government must end were private choice and ownership begins.

I am preparing legislation to provide GEDCA the funding to invest in the dreams of our people... called the Village Industry program. The entrepreneurial spirit seen at the Chamorro Village and Flea Markets every Wednesday night must be encouraged and nurtured through training, technical assistance and funding assistance from existing federal and local small business programs.

We’ve also completed the first draft of the Tumon Business Improvement District, which will give the businesses in Tumon the authority to take charge of their infrastructure so they no longer have to rely on government to support its critical needs.

Each of these efforts to privatize, return, lease, share or sell resources will not only revive our economy but expand it. I have said many times that government reform was the most immediate issue we faced…. But the most important challenge before us is to stabilize and revitalize of our economy.

In March, I introduced my Economic Stabilization Plan… And we’ve taken significant steps towards stabilizing our economy.

Immediately upon taking office, my administration identified all unexpended CIP funds, awarded contracts and disbursed those funds as quickly as possible. In the first seven months $70 million dollars in CIP funding were acquired for classrooms repairs and new construction, major highways, sewer systems, airport repairs and for A&E at the Port. Working with the U.S.D.A. Office of Rural Development, another $13.5 million dollars will soon be released for the construction of the new College of Business and Public Administration building at the University of Guam.

We’ve seen an increase in $20 million in construction projects for the third quarter. 4th quarter will increase by 50 percent. That brings construction activity to $60 million this year.

We have received numerous military port visits; TANDEM Thrust exercise… and today the marines are conducting military exercises in our northern villages. Today, over $200 million in military construction is ongoing for Guam.

The Bonds when sold… and they will be sold… will infuse $139 million in tax refund to help spur the retail industry. Million more will go towards repair of schools. The remaining millions will go towards paying debts owed vendors, many of who are sitting right here in this room.

Paying down our ten percent for disaster related expenses will release another $226 million dollars in reimbursements. But this is still not enough… and if we do not continue to push for a turn around quickly it will result in diminishing returns.

So where do we go from here?

Within five years, our goal is to restore Guam’s Gross Island Product to $3.1 billion dollars… that is a 15% increase in our economic activity and the restoration or creation of 7,500-10,000 jobs on Guam.

I stand here today, committed to rise above doubt and move aggressively and deliberately forward with my plan to recover our economy and restore a higher level of prosperity.

We only have one choice today. The same choice many of you make everyday. And that is working to make things better.

GVB is working to increase visitor arrivals to pre-typhoon levels… increasing revenues for our visitor industry to restore and add jobs lost over the past few years.

I authorized the transfer of $5.3 million to the Tourist Attraction Fund to pay for Guam’s marketing efforts in Japan and Korea, to re-establish our presence in those highly competitive markets. I will seek even more funding for GVB to develop and market a three-year strategic plan to bring our visitor numbers back.

We are developing niche markets for our visitor industry. My Administration is working to bring professional sports teams from Asia to train on Guam. The economic benefits are enormous… the media spotlight is priceless and the fan patronage for these teams is unfaltering.

Guam’s opportunities will be found, not in simply going back to the industries that exist, but in those yet to be developed.

Each of us had to drive through some portion of Tumon to get here today and what many of us forget is that the Tumon today was not the same Tumon that our fathers before us saw just some 30 years ago. Back then, Tumon was just a quite beachfront community.

When men like my father, the late Governor Carlos Camacho, first proposed to establish Guam as a destination of choice for Japanese and other Asian travelers, they too faced the doubters and naysayers. No one then would have imagined that we would welcome an average of 1 million visitors to our shores each year as a result of their “bold ideas.”

Beyond these traditional economic initiatives, my Administration, through GEDCA, has completed preliminary evaluations of 16 regional hub opportunities… from arbitration centers, to fisheries, to light manufacturing and warehousing, to U.S. products and import export industries to professional certification and education. We will now use Department of Interior and HHS grant funding to conduct feasibility studies for each opportunity so that we can begin pursuing those that have the greatest opportunity of succeeding on Guam.

I recently signed the law allowing Guam Fisherman’s Co-op efforts to reinvest in the Gregorio D. Perez Marina in Hagatña. USDA is looking to finance and provide millions in grants to expand the Marina to add piers, restaurants, shops and a fisheries center. We will look for federal assistance to do likewise in the Agat Marina to complement those efforts. Just last year, Guam’s Fisherman’s Co-op sold over $1 million in fish to Guam’s local market that accounted for only 37% of local demand.

Working in conjunction with an international fishing group—we are now exploring the feasibility of a Guam-based long-range fishing operation. As the largest deep draft port in the Western Pacific, our goal is to establish an international marketplace to sell fish from the Marianas and Micronesia region. We will market our port, our air carriers and our FDA approval to international markets. Coupled with aquaculture, Guam is the gateway to expanding fishing industries here and throughout our region.

I remind you that Hawaii and Seattle’s multi-billion dollar fishing industries started at their marina.

I am also working with leaders from other regional destinations to establish a regional Micronesian cruise line industry. While we have all marketed our individual strengths, we all recognize the strength in marketing the combined advantages of all our islands. A regional cruise line will be an extremely attractive package for visitors as well as a strong first step towards regional marketing efforts.

But beyond that… we will be reaching aggressively into new markets in Asia… markets that the rest of the world is also courting. We will sell our advantage as the gateway between America and Asia… the conduit of opportunity as American companies seek to invest in them and they seek to invest in America. As these negotiations become more tangible, I will come before this body to update you on our efforts. However, I assure you that we will be in a far greater position to open new tourism and trade opportunities than ever before. And while the increase in visitor arrivals may seem ambitious… I assure you that as a result of my discussions with new markets in Asia, those numbers seem conservative. There are tremendous opportunities for growth.

My Administration is working with the University of Guam and Asian countries to develop professional certification and continuing education programs for foreign students and professionals. Already, we have developed the possibility of bringing nurses from the Peoples Republic of China to help prepare them to take the U.S. NCLEX nursing test. We will do the same for the CPA test. Our “education industry” takes advantage of our U.S. accreditation, student visas and our proximity to China.

Over the next four months, will reach out directly to the decision makers in the industries we are trying to expand or develop. And I will be calling on some of you to join me to make our case, just as my Administration has called upon you to help with our privatization and reorganization efforts.

With regard to the military--The work done by my Administration and first planted by the Chamber of Commerce to bring the military back continues to bear fruit.

We seek greater military presence in two forms… increased port visits and home porting. Our task is to recapture previous levels in a way that brings stability back to our economy… and serves local and national interest.

Already, the Port Authority has released the RFP for the A&E design work for the Wharf expansion. This work will show a clear commitment on our part to prepare for increased military activity, even as it opens up new economic opportunities for our Port.

Next month, I am attending the National Governor’s Association meeting to strengthen our relationships with state governments. This powerful, collective voice speaks to many of the same issues we confront in our individual economies… most especially unfunded federal mandates.

Already, my recent trip to our nation’s capitol has gained us valuable congressional allies in our efforts to seek Congressional relief from restrictive visa regulations. Expanding this network of friends will only help improve our presence in Washington. President Bush was also a Governor, and faced many of the same challenges Governors throughout the nation continue to confront.

I will also be traveling to Asia to strengthen our relationship with our core markets in Japan, Korea and Taiwan. These markets have not only produced a steady flow of visitors to our island, but have also created some of our most successful local businesses. Many individuals from these markets are today active members of this very Chamber… and I will ask them to join me in my travels to their homeland to help bring our message of promise and opportunity.

In the end, we will succeed and there will be receptiveness at the highest levels in those new markets. If you don’t think about the future, you cannot have one.

Every one of these initiatives I outlined today has either already occurred or is already in the process of development, with great promise. These are not pie-in-the-sky dreams, but real economic opportunities that we must all prepare for and participate in achieving.

Everything we do, from reducing the cost of government to expanding our existing economy, to diversify our industries to opening new markets…. affects us all. I call upon you to participate in realizing these ambitious agendas. In the end, this has never been about saving our government, but has always been about saving our economy… of which this government is only a small component.

These are strong steps moving forward in the next few months. Today, I ask that you all join me in pushing Guam towards a brighter tomorrow. We have only begun to scratch the surface of what we can achieve if we just work together.

For a while, this island: our people our economy has suffered. Let us continue to work at succeeding.

Life being what it is, we are all going to take a fall at some point. The trick, then, is not in never falling, the trick is in getting back up when you do.

Thank you. God bless and Good Afternoon.



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