Apparently, Saipan isn't even recognized by Blogger's spell check. That is how little notice my current home gets in this world. Of course since I'm from Wyoming, I'm used to being from a place that is unfamiliar to most. When I was growing up in Wyoming, I once saw an episode of the Garfield cartoon in which they had a bit: 'If it's on TV, it must be true'. In it, they explained that an Italian artist was drawing the map of America and when he was finished there was a blank spot in the middle. He wrote "Wyoming" in the blank spot which meant "nothing's here" in Italian. It was a clever bit, and I have used the reference often when people don't know the state. Another amusing response I often get when I tell people I'm from Wyoming is: "Ah, Miami." I don't hear the similarity, but apparently it's there.
So let me tell you a little about the place I'm living and learning about now. It is one of 16 Mariana Islands, of which, 15 make up the Commonwealth of Northern Mariana Islands (CNMI). Saipan is part of the CNMI while Guam is in the Marianas but remains a separate US territory. Saipan is also on the west side of the international dateline, so it is commonly said to be where America's day begins. And although Hawaii is the closest US state to Saipan, ironically it's where America's day ends 44 hours later. Actually, Hawaii does share that distinction with the western Aleutian Islands of Alaska too.
The native Chamorro and/or their ancestral Indonesian/Filipino seafarers, arrived 4,000 years ago. Archaeologists actually believe that Tinian, Saipan's southern neighbor island, may have been the first Pacific island to be settled outside Asia. Today, the Chamorro only make up about five percent of the population. The other 'native' group is the Carolinian, but they arrived in the 1800's, after the first colonial powers, which began arriving in the 1600's. The Spanish were the first to use the island as a stop off point and built ranches to raise animals to supply ships passing through the Marianas. The English, Dutch, and others also made it a port of call, and like most colonized locations, most of the locals died from disease or were simply pushed out to make room for colonial expansion.
In 1898, the Spanish lost the island to the US, after the Spanish-American War, but sold it to the Germans without much protest from the US. However, neither made any effort to colonize or develop the island, so not much changed for the new Spanish and Carolinian occupants or the remaining Chamorro people. However, as a twist of fate and war, because the Germans owned the island, and the Japanese supported the Allies of WWI, the League of Nations awarded control of Saipan to Japan after the war was over. (The Japanese did take the island during WWI, but at that time it was considered a German territory.) So as Japan expanded it's empire in WWII, Saipan was not part of its conquest. Rather it had already been governed by Japan for over 20 years.
I'll write more about the WWII history of Saipan later on, but for now I want to get into the boom and bust life of Saipan as a territory of the US. The first boom was the US military presence, which still remains part of the local economy, with a fleet of supply ships anchored just off shore, a small Army Reserve force on the island, and a National Park War Memorial all providing jobs, income and spending on the island. I get rocked to sleep and jostled awake everyday by the boats that run workers to and from the cargo ships anchored in the lagoon. Although it is still part of the economy, and saw some spikes with the Korean and Vietnam wars, the military spending dried up significantly after WWII.
The next two booms were simultaneous. The most significant was the garment industry, which started in 1983, peaked in in the 1990's and was gone in 2009. In 1999, the industry hit its peak with $1.05 BILLION in sales, which brought in $39.3 million in local 'user fees' taxes for the island that year. In addition to the tax revenue, the industry also brought in over 15,000 foreign factory workers (25% of the islands population) who spent an estimated $39 million a year in the local economy. The millions sound impressive, but they actually equate to only 8 percent of the total garment sales revenue. This was a small price to pay for the 'Made in America' tag, which production in Saipan provided to the companies that bought the garments. As for who was buying the clothes produced in Saipan, it was pretty much every single American clothing company: The Gap, Levi Strauss Co, Cutter & Buck, Dayton Hudson, J. Crew Group, J.C. Penny, Sears Roebuck & Co., The Limited, Oshkosh B'Gosh, The Gymboree, the May Company, Lane Bryant, Wal-Mart, Tommy Hilfiger, and Ralph Lauren to name a few.
So, what caused the garment industry to crash? Despite the big money and big brands the whole thing was riddled with corruption, and poor oversight and regulation. The workers had little to no rights, and some worked 12 hours a day, 7 days a week. Often they were promised good jobs in America, paid recruiters $6000 for the opportunity, and found themselves in Saipan either in a factory working for $3 an hour, or on the streets without any job at all. Since 90% of these new arrivals were young women, those who arrived with no job awaiting them, often ended up forced into prostitution. In one case a man contacted a local hospital to ask how much he could make selling a kidney in order to return to his home country.
Ironically, the 1999 peak in sales was also met with three separate lawsuits filed by aid groups on behalf of 30,000 current and past factory workers that same year. In addition, the factories and their sweatshop conditions were getting more and more publicity in the United States, both in public and in government. Jack Abramoff, of lobbying corruption infamy was paid $6.7 million by the government of CNMI to prevent congressional oversight of the industry. Meanwhile, multiple articles were published in both US and international papers as well as magazines. And some lawmakers were even raising the alarm, despite others trying to brush it off or cover it up. In the end, Congress finally stepped in to raise the minimum wage and enforce greater immigration regulations, which eventually led to the end of the Garment Industry.
At the same time the garment industry was booming, so was Japan's economy. And they were also on a real estate buying binge in the US which included Saipan. I spoke to someone who said any property on the water was going for millions of dollars, and after the crash you'd be lucky to get $40,000. However, these properties were not actually bought by foreign investors, because Saipan law prohibits anyone other than natives from buying land. So instead these were 50 year leases on the property, which could be renewed.
At the peak, Japan funded several resort hotels as well as other businesses. I know of one resort that is still operated by a Japanese firm, and several that have either transitioned to new ownership or failed all together. One of the most glaring examples is the Fiesta Mall, locally referred to as the Fiasco Mall. It used to be a popular shopping and hangout spot for everyone from the garment workers to tourists. Now it is rapidly being reclaimed by the surrounding jungle and only frequented by graffiti artists, vandals, and kids playing war with Airsoft guns.
When Japan's economy crashed, so did the real estate market in Saipan. Moreover, Japan was also a big part of Saipan's tourism industry, which has always been a mainstay of Saipan's economy. During the boom, the Japanese were the primary tourists in Saipan, now they have dropped to number three.
The latest boom, has been tied to a resurgence in tourism for two reasons. The first is a growing middle and upper class in Korea and China, which have taken over the top two spots from Japan. Now China and Korea are both tied at around 40 percent of the tourist population each year. That is 80 percent of all the tourism on the island, with Japan making up nearly all of the last 20 percent and the rest of the world barely making a blip on the tourism radar.
The second is the newly legalized gambling industry, which is monopolized by a Chinese firm "Best Sunshine," my employer. Although, gambling has been legal on other islands in the CNMI, the recent legalization in Saipan is a first for the island, and was done in hopes that it would save the flailing economy and the cash strapped government pension funds. Japan actually ran a casino on Tinian that went belly up, along with it's ferry, which I would have liked to use to visit the island.
However, the latest boom is already showing signs of bust. The Best Sunshine parent company (Imperial Pacific International) stock has dropped over 50 percent from recent all time highs. The main casino hotel project is behind schedule, which has also led Moody's to downgrade the bonds sale from B3 to B2. Plus, they are under investigation from all fronts, for possible money laundering, to unpaid construction service fees, wrongful termination, and unsafe work environment on the construction site, where they recently denied OSHA access to investigate recent workers' injuries and deaths. It seems there is something new in the news everyday.
Before all of this turmoil, they were allowed to build a temporary 'training' site, which is an actual casino, where new staff are able to learn their jobs as costumers gamble away real money. The reason it is called a training site is because the legalization of gambling stipulated that the new casino could not occupy an existing property, but must occupy a new construction. Amazingly, this tiny training location has been able to rake in huge returns. So much so that it is now the most lucrative casino in the world. With only about 40 gaming tables and about as many slot machines, the site was able to have over $32 BILLION in chip turnover in its first year alone! That is over $2 million per day per table! Somehow, this meager 'training' site has been able to beat out the gaming giant of The Sand Venetian in Macau. It is no wonder there is suspicion of money laundering.
Even my yachting job is tied to this wild casino gamble. The Grand Marianas yachting fleet is a subsidiary of the casino, and we cater to the VIP customers of the gaming tables. So, I can only hope that the company is able to raise the $60 million in new capital they need to keep things going before their phase one casino hotel opens in March. If not, I guess I may be the first to know when I fail to see my paycheck and the fuel trucks stop coming to refuel the boats.
It's too soon for Saipan's next bust... both legal and economic. Their biggest hope for avoiding the legal bust was the fact that president-elect Trump's ex-casino CEO, Mark Brown, was running the show here. However, as of TODAY, he was pushed aside and the Chinese COO has taken over as the CEO, as Mark travels to drum up capital after the bond downgrade. I guess the casino is gambling on the odds of a financial bust being greater than a legal one. Either way, wish me and Saipan good luck.
So let me tell you a little about the place I'm living and learning about now. It is one of 16 Mariana Islands, of which, 15 make up the Commonwealth of Northern Mariana Islands (CNMI). Saipan is part of the CNMI while Guam is in the Marianas but remains a separate US territory. Saipan is also on the west side of the international dateline, so it is commonly said to be where America's day begins. And although Hawaii is the closest US state to Saipan, ironically it's where America's day ends 44 hours later. Actually, Hawaii does share that distinction with the western Aleutian Islands of Alaska too.
The native Chamorro and/or their ancestral Indonesian/Filipino seafarers, arrived 4,000 years ago. Archaeologists actually believe that Tinian, Saipan's southern neighbor island, may have been the first Pacific island to be settled outside Asia. Today, the Chamorro only make up about five percent of the population. The other 'native' group is the Carolinian, but they arrived in the 1800's, after the first colonial powers, which began arriving in the 1600's. The Spanish were the first to use the island as a stop off point and built ranches to raise animals to supply ships passing through the Marianas. The English, Dutch, and others also made it a port of call, and like most colonized locations, most of the locals died from disease or were simply pushed out to make room for colonial expansion.
In 1898, the Spanish lost the island to the US, after the Spanish-American War, but sold it to the Germans without much protest from the US. However, neither made any effort to colonize or develop the island, so not much changed for the new Spanish and Carolinian occupants or the remaining Chamorro people. However, as a twist of fate and war, because the Germans owned the island, and the Japanese supported the Allies of WWI, the League of Nations awarded control of Saipan to Japan after the war was over. (The Japanese did take the island during WWI, but at that time it was considered a German territory.) So as Japan expanded it's empire in WWII, Saipan was not part of its conquest. Rather it had already been governed by Japan for over 20 years.
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| The old Japanese Hospital, now the Saipan Museum, which rarely opens. During Japanese colonial rule, this was one of the most modern hospitals in all of Japan. |
I'll write more about the WWII history of Saipan later on, but for now I want to get into the boom and bust life of Saipan as a territory of the US. The first boom was the US military presence, which still remains part of the local economy, with a fleet of supply ships anchored just off shore, a small Army Reserve force on the island, and a National Park War Memorial all providing jobs, income and spending on the island. I get rocked to sleep and jostled awake everyday by the boats that run workers to and from the cargo ships anchored in the lagoon. Although it is still part of the economy, and saw some spikes with the Korean and Vietnam wars, the military spending dried up significantly after WWII.
The next two booms were simultaneous. The most significant was the garment industry, which started in 1983, peaked in in the 1990's and was gone in 2009. In 1999, the industry hit its peak with $1.05 BILLION in sales, which brought in $39.3 million in local 'user fees' taxes for the island that year. In addition to the tax revenue, the industry also brought in over 15,000 foreign factory workers (25% of the islands population) who spent an estimated $39 million a year in the local economy. The millions sound impressive, but they actually equate to only 8 percent of the total garment sales revenue. This was a small price to pay for the 'Made in America' tag, which production in Saipan provided to the companies that bought the garments. As for who was buying the clothes produced in Saipan, it was pretty much every single American clothing company: The Gap, Levi Strauss Co, Cutter & Buck, Dayton Hudson, J. Crew Group, J.C. Penny, Sears Roebuck & Co., The Limited, Oshkosh B'Gosh, The Gymboree, the May Company, Lane Bryant, Wal-Mart, Tommy Hilfiger, and Ralph Lauren to name a few.
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| Part of an abandoned apartment complex. It seemed they had consolidated appliances to different apartments. This one was the fridge apartment. Also, it appeared they were renovating a few of the buildings next door, which I guess was signs of better financial times in the latest boom. |
So, what caused the garment industry to crash? Despite the big money and big brands the whole thing was riddled with corruption, and poor oversight and regulation. The workers had little to no rights, and some worked 12 hours a day, 7 days a week. Often they were promised good jobs in America, paid recruiters $6000 for the opportunity, and found themselves in Saipan either in a factory working for $3 an hour, or on the streets without any job at all. Since 90% of these new arrivals were young women, those who arrived with no job awaiting them, often ended up forced into prostitution. In one case a man contacted a local hospital to ask how much he could make selling a kidney in order to return to his home country.
Ironically, the 1999 peak in sales was also met with three separate lawsuits filed by aid groups on behalf of 30,000 current and past factory workers that same year. In addition, the factories and their sweatshop conditions were getting more and more publicity in the United States, both in public and in government. Jack Abramoff, of lobbying corruption infamy was paid $6.7 million by the government of CNMI to prevent congressional oversight of the industry. Meanwhile, multiple articles were published in both US and international papers as well as magazines. And some lawmakers were even raising the alarm, despite others trying to brush it off or cover it up. In the end, Congress finally stepped in to raise the minimum wage and enforce greater immigration regulations, which eventually led to the end of the Garment Industry.
At the same time the garment industry was booming, so was Japan's economy. And they were also on a real estate buying binge in the US which included Saipan. I spoke to someone who said any property on the water was going for millions of dollars, and after the crash you'd be lucky to get $40,000. However, these properties were not actually bought by foreign investors, because Saipan law prohibits anyone other than natives from buying land. So instead these were 50 year leases on the property, which could be renewed.
At the peak, Japan funded several resort hotels as well as other businesses. I know of one resort that is still operated by a Japanese firm, and several that have either transitioned to new ownership or failed all together. One of the most glaring examples is the Fiesta Mall, locally referred to as the Fiasco Mall. It used to be a popular shopping and hangout spot for everyone from the garment workers to tourists. Now it is rapidly being reclaimed by the surrounding jungle and only frequented by graffiti artists, vandals, and kids playing war with Airsoft guns.
When Japan's economy crashed, so did the real estate market in Saipan. Moreover, Japan was also a big part of Saipan's tourism industry, which has always been a mainstay of Saipan's economy. During the boom, the Japanese were the primary tourists in Saipan, now they have dropped to number three.
The latest boom, has been tied to a resurgence in tourism for two reasons. The first is a growing middle and upper class in Korea and China, which have taken over the top two spots from Japan. Now China and Korea are both tied at around 40 percent of the tourist population each year. That is 80 percent of all the tourism on the island, with Japan making up nearly all of the last 20 percent and the rest of the world barely making a blip on the tourism radar.
The second is the newly legalized gambling industry, which is monopolized by a Chinese firm "Best Sunshine," my employer. Although, gambling has been legal on other islands in the CNMI, the recent legalization in Saipan is a first for the island, and was done in hopes that it would save the flailing economy and the cash strapped government pension funds. Japan actually ran a casino on Tinian that went belly up, along with it's ferry, which I would have liked to use to visit the island.
However, the latest boom is already showing signs of bust. The Best Sunshine parent company (Imperial Pacific International) stock has dropped over 50 percent from recent all time highs. The main casino hotel project is behind schedule, which has also led Moody's to downgrade the bonds sale from B3 to B2. Plus, they are under investigation from all fronts, for possible money laundering, to unpaid construction service fees, wrongful termination, and unsafe work environment on the construction site, where they recently denied OSHA access to investigate recent workers' injuries and deaths. It seems there is something new in the news everyday.
Construction site of the Phase 1 Casino Hotel project. Lit up at night by the welders. The speed of progress has been amazing, but I don't know how it will be open in March, when I shot this video at the beginning of January.
Before all of this turmoil, they were allowed to build a temporary 'training' site, which is an actual casino, where new staff are able to learn their jobs as costumers gamble away real money. The reason it is called a training site is because the legalization of gambling stipulated that the new casino could not occupy an existing property, but must occupy a new construction. Amazingly, this tiny training location has been able to rake in huge returns. So much so that it is now the most lucrative casino in the world. With only about 40 gaming tables and about as many slot machines, the site was able to have over $32 BILLION in chip turnover in its first year alone! That is over $2 million per day per table! Somehow, this meager 'training' site has been able to beat out the gaming giant of The Sand Venetian in Macau. It is no wonder there is suspicion of money laundering.
Even my yachting job is tied to this wild casino gamble. The Grand Marianas yachting fleet is a subsidiary of the casino, and we cater to the VIP customers of the gaming tables. So, I can only hope that the company is able to raise the $60 million in new capital they need to keep things going before their phase one casino hotel opens in March. If not, I guess I may be the first to know when I fail to see my paycheck and the fuel trucks stop coming to refuel the boats.
It's too soon for Saipan's next bust... both legal and economic. Their biggest hope for avoiding the legal bust was the fact that president-elect Trump's ex-casino CEO, Mark Brown, was running the show here. However, as of TODAY, he was pushed aside and the Chinese COO has taken over as the CEO, as Mark travels to drum up capital after the bond downgrade. I guess the casino is gambling on the odds of a financial bust being greater than a legal one. Either way, wish me and Saipan good luck.
Things tend to work out for you, but I bid you a dutiful good luck. I just finished reading this - it's very good! I couldn't watch the video but the photos of the mall are fascinating. Thank you for such an excellent and informative blog. I assume you'll be visiting Russia at some point, which will result in good blogs with more Trump references.
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