Economic Development Plan

Activism by groups like We Are Guahan have a point, as do the counter-position of pro-buildup movements. As much as we tug on both sides of the rope we need to understand that the breaking point will cause both sides to fall. Culture needs economic development, otherwise many of our people and the cultural values that they have will continue to leave our island for other economic opportunities. Likewise, a failure to preserve our culture will make Guam lose its most valuable resource, and no amount of money can bring it back.

The underlying problem is a lack of faith in our government's ability to stand firm in its non-negotiable cultural points, and its inability to provide a plan for economic growth. We believe that the solution lies in the problem.

If our government had a plan for growth, it would be less inclined to sacrifice culture for opportunity. Also, a plan for growth would make pro-buildup activists carefully weigh the pros and cons of the buildup, as they would have other opportunities to consider. As such, we believe that the other economic development plans we present provide an indirect solution to the Socio-Cultural Preservation problem we are facing today.

A major consideration that needs to be addressed in collaboration with GVB and MWR is how the presence of so many military personnel will impact the image of Guam as a destination. Tourists don't come to Guam to see servicemen and women, they come here for the many attractions that make us special. If Tumon and other tourist areas are overrun by the military on a regular basis, or if our Socio-Cultural environment is overwhelmed, we may see a negative impact on visitor arrivals. Proper coordination to have MWR educate servicemen and women while bringing them during off-peak times will go a long way to preventing this problem.

Traffic is already a problem and it will get worse. The availability of supermarket items on the first of the month is a telling sign of how limited we are in handling a surge in demand. Both are examples of the planning and coordination that needs to take place. As road improvement projects are ongoing the demand from the buildup needs to be factored in. Our government needs to communicate with the private sector to find out how it can facilitate the development of unified order processing and additional warehousing/storage to improve bulk pricing and supply chains.

At the end of the day the buildup is projected to bring in a wealth of investment on Guam, and then a return to normalization adjusted by the increase in population. Throughout this phase we need to make certain that all revenue surges and developed assets are committed to developing our island in a way that will have a lasting positive impact for generations. Expanding existing industries and developing new industries, both of which are presented in our plan, will achieve the desired result long after the benefits of the buildup have faded.

To coordinate and facilitate the tracking, measuring, and managing of existing business growth the Guam Economic Development Authority must take the lead and create a qualified certificate incentive that reduces the Gross Receipts Tax (GRT) for those companies who annually file their Income Statement, Balance Sheet, and pro forma growth estimates confidentially for GEDA analysis. Utilizing the Income Statement, Balance Sheet, and Pro Forma, GEDA will report to the business how their operational efficiency measures against their peers locally and nationally.

With this information, businesses can benchmark their success and identify ways to further improve how they manage their cash flow, and make informed decisions when deploying profits, taking on debt, or raising equity. Businesses will also be able to find leaks in their operational structure that is costing them money through wasted time in their inventory flow, accounts receivable, or accounts payable. This data, combined with the reduction in GRT, will empower businesses with the information and resources to grow, creating more jobs for our people and improving our overall tax base.

Businesses are always in need of capital. On Guam the only sources of capital are business revenues, more money from the owner, or borrowed money from a bank. We need to create an Intrastate Capital Market on Guam where owners can sell shares of the company or issue company bonds intrastate (within Guam) to finance growth, and buyers of these securities can have a marketplace to buy and sell into, regulated by effective government. Interested investors, at the discretion of the business participant, may access business metric data from GEDA to analyze the quality of their investment and the performance of the company. Additional sources of business capital will create jobs, more government revenue, and increased business volumes that help drive more demand.

A Long-Term opportunity for immense growth in the financial industry is to get ahead of the trend towards globalized trading. Currently, U.S. stocks trade on exchanges that close during the evenings, and after-hours trading is very limited. Our time-zone and the application of U.S. laws make us the perfect location to handle trading after the major U.S. exchanges close. Now, when "Wall Street" shuts down, "Pacific Avenue" can open up to allow for 24-hour market activity within the United States. This opportunity needs to be explored, and resources need to be committed to determine its feasibility.

One of the greatest inhibitors to the availability of supply-side economic growth is mismanagement. Personal finance and the inability for individuals to effectively manage their money turns into a big problem when it is all added up across our population. We need to integrate into our school system at the middle school and high school level a financial curriculum that teaches our people about money and how to make it work and grow. This will unlock a lot of lost economic activity by reducing the impact of bad financial decisions by individuals, which in turn will add up to a lot more savings and investment throughout our community.

Our higher education system has been stuck in demand-side curriculum by focusing on degrees and certificates for needs that already exist. We graduate teachers, nurses, and business majors in large numbers, and trade students based primarily on tourism, construction, and related equipment. While it is important that we continue to educate our population to meet current needs, we also should educate our population to meet the needs of businesses and industries we want to attract. Advanced High-Tech trade curriculum, and International Trade, International Law, and International Finance degree programs, should all be offered so that we can attract multi-national corporations, high tech companies, and import/export related industries to our island.

Every year, tens of thousands of students travel from Asia to study abroad at the elementary, middle, high school, and post-graduate level. These students attend local learning institutions, pay tuition, and finance their accommodations for the learning experience. Guam is the closest destination to Asia that has accredited American learning institutions, and the coveted American learning experience.

We need to focus resources from our mature industries to grow the student tourism market. Utilizing GVB in conjunction with UOG, DOE, GCC and private accommodations providers we can effectively penetrate market share from Malaysia, the Philippines, and other non-U.S. destinations that are thriving in this area. Additionally, we can transition military buildup assets into this area by planning financially to acquire and convert construction barracks' into student tourism housing. This will transform potential ghost town assets into the accommodations for thousands.

The money inflows from a program like this will benefit our University, Community College, and public and private schools, where student capacity can be maximized and generate revenue from student tourism tuition. Hotels and tourist attractions can make their facilities available for a fee, enriching the student tourism experience while further monetizing leisure assets. Restaurants, retail establishments, and transportation companies will all see inflows from student spending.

A largely untapped market in the educational industry is in topic-driven professional instruction offered online. Many experts in various industries have a wealth of knowledge that people will pay for in order to learn. Talent Agents, Attorneys, Financial Consultants, Wellness experts, Marketing Professionals, and many others can monetize their expertise and keep their day professions by offering single-topic courses online.

We can leverage our time zone differences, fiber optic capacity, and English language usage to capture this industry by building out the technological infrastructure to organize and facilitate these online learning opportunities. We can add further value by having our educational professionals develop the topic curriculum for the instructors so that they can focus on teaching what they know rather than on how to teach. Now, when a highly sought-after talent agent ends his day, he can log onto our instructional program and offer to teach aspiring musicians online how to get into the music industry. Assuming 2,000 students pay $50, a one hour session can generate $100,000, and our service can charge 20%, earning $20,000 an hour. With hundreds of professionals available in dozens of fields, we can develop a substantial industry as the experts and leaders in this area.

Our geographic location between Asia and America makes us the ideal place for information to interact between continents at the fastest level available. This, coupled with our abundance of fiber optic capacity, establishes Guam as the best place for online collaboration and project management to take place in the global economy. Now, instead of a signal traveling from America to Asia and back, we can have bits of information travel from both areas and meet in the middle – Guam – where they can be sent back at a faster rate.

This geographical and fiber optic opportunity is something that we need to develop in order to attract high-tech companies in America and Asia that are in the business of data storage and retrieval. Bringing Microsoft, Cisco, Google, and other large company cloud operations will build a new technologically based industry that will provide high paying high-tech jobs for our people and diversify our economic base.

One of the greatest burdens on existing technological capacity is the limitations of bandwidth and the demand for streaming media. Companies like Netflix, Hulu, and others that are in the business of transmitting information real-time must manage their growth based on the bandwidth capacity available to them. Additionally, they need to protect intellectual property from corporate espionage and consumer piracy. These limitations make expansion into the vast Asian Market a challenge.

The fiber optic capacity and the presence of U.S. laws and regulations, along with our geographical location, make Guam the ideal place for real-time streaming content providers to reach into the Asian Markets. We should be able to further attract these companies with the availability of an educated workforce trained in this area through our supply-side curriculum. Similar to Data Storage and Retrieval, this market will provide high paying high-tech jobs for our people and diversify our economic base.

When Guam was placed into the North American Numbering Plan (1-800 numbers) the greatest voice of opposition came from – Canada. Canada has a thriving call center operation, as does the Philippines, India, and other emerging economies, all taking care of customer service requests. Most of us who have called in for tech support on our computers or on products we purchased were speaking with someone from these countries, and it is these services that we are best suited to facilitate on Guam.

The cost of operating a call center in Canada is comparable if not more than operating the same facility on Guam, as the cost of doing business in Canada is higher due to a higher tax rate, and the operation of a call center requires night-differential payments. Canada is more expensive due to their laws and their time zones, not to mention the risk of currency exchange. Many U.S. companies work with Canada because the quality of service exceeds India and the Philippines, where lower pricing comes at the cost of language barriers and quality controls.

We can capture the call center market and create highly skilled jobs that compete with the Canada offers. Our U.S. laws and tax base, use of the U.S. dollar, mastery of the English language, and daylight time zone all give us an advantage. We need to develop this industry by building out the necessary infrastructure and marketing to companies that would require our services.

"We don't ship to Guam." All of us have encountered this harsh reality at some point when trying to procure orders from the U.S. or from Asia. As frustrating as this is for us on an ongoing basis, it provides us with an opportunity to meet a market need in East/West order fulfillment.

When a vendor does not ship to Guam it is also likely that they also do not ship to international markets. This can be due to the cost of shipping, and/or the exchange rates when fulfilling foreign orders. If properly addressed, Guam can again emerge as a trading hub to fulfill these orders and open up new markets for vendors.

The first step will be to make a coordinated effort to find out why Guam is not considered a viable shipping destination, and to eliminate the roadblocks associated with it. Many times, it is a lack of vendor awareness that Guam is a U.S. Postal Service destination. It could also be an inability of the vendor to handle the logistics or costs associated with meeting Guam orders, due to their low volume size. Our government needs to open up these markets to our people by finding solutions to bring goods into Guam.

When we are able to receive additional goods from the U.S. we are then able to transit those same goods to foreign destinations, increasing our volume demand and opening up even more supply lines. Building the infrastructure to support this new supply chain would require us to work closely with our banking industry on Guam to make real-time exchange rate quotes available to international buyers and sellers. Also, an online ordering platform to bring together buyers and sellers through our supply line will facilitate the growth of this industry.

With more supply lines and the ability to facilitate foreign exchange rate orders for vendors we can reestablish Guam as the transshipment point. Now, an eBay seller can sell their product to any buyer we can ship to, and they can price the transaction based on our online ordering platform. Jobs will be created in the technology, shipping, and warehousing industries on Guam to support the flow of these goods. Guam consumers will also benefit by not being left out with the new supply lines and shipping arrangements facilitated.

One of the greatest benefits of our relationship with the United States, political status issues notwithstanding, is the access to bond markets and the structure and regulation of a sound financial industry. These characteristics make Guam the natural leader in regional finance and it is in applying this role for the benefit of our regional neighbors that new opportunities can develop.

Micronesia Monetary Fund

Greater savings throughout the region can be achieved through coordinated purchases that afford large lot discounts. Shipping costs can also be reduced when proper coordination maximizes container capacity. Jobs can be created to support demand for goods available regionally that have historically been procured outside Micronesia.

Regional Trade Office

Bio-Fuels Feedstock

At the cost of paying out tax refunds in 2012 we could have built four Sugar Ethanol Refineries that would have met the fuel demands for Guam and Micronesia 3x over. By developing an oil and ethanol refining industry using copra and cane feedstock, we can take control of our energy expenses that run up to 330 million dollars a year. This will reduce the amount of money we export to fuel producers in Singapore, and reduce the cost of fuel for our people. In turn, these savings will result in more spending power for our people and additional growth in our economy.

Coconut Oil

Sugar Ethanol

U.S. standards based packaging is a barrier to entry for fledgling international suppliers who want to reach into the U.S. Market. Guam has the ability to create a packaging industry to meet these new supplier needs, creating jobs, bringing in new products, and improving our shipping volumes with export product.

Food

Hazardous Materials

Vendor Specifications