There’s an old Chinese curse appropriate to the times we face: “May you live in interesting times.” The times are getting more interesting by the day. First, we have the early stages of a worldwide pandemic, and like a rock dropped into a pond, the effect ripples are moving out rapidly, spinning havoc everywhere they touch. Though the actual medical threats of the coronavirus to the island are serious, the economic risks will grow more serious when the coronavirus starts claiming its first local victims.
Long before Guam’s first human victim, the first victim of the coronavirus was the global “just in time” inventory supply chain that was the glue holding the whole globalization movement together. It came to a screeching halt faster than the number of actual cases of the coronavirus was documented. The global economy was already slowing down before the coronavirus reared its ugly head, having never fully recovered from the 2008 global financial meltdown, and now that recovery is moving into recession.
A more important reason for politicians to start worrying is the fact that Guam has only a few months’ supply of food on island at any given moment in time because the retailers’ heavy dependence on the “just in time” inventory system, which does the heavy lifting for the island’s food supply chain, has begun grinding to a halt causing a record number of container ships to sit idle in ports all around the world.
The second victim was the manufacturing industry. In an effort to stop the spread of the virus, China shut down many factories, causing many businesses to run out of components or finished products. Retail sales dropped as shelves emptied with no replacement inventory to arrive “just in time,” leading to product shortages, causing massive layoffs in both the manufacturing and retail industries.
The third victim was the travel and vacation industry. With ships being denied port entry to different destinations, cruise ship bookings have plummeted. As reports of passengers being quarantined after getting off airplanes hit the news, air travel bookings have plunged. People have been avoiding public places where large numbers of people gather such as restaurants, conventions, casinos, concerts, cultural events like FestPac, and sporting events like marathons and the Tokyo Olympics. The list of cancelled public events will be long and all will impact the revenue of the government and the people.
Politicians and business leaders on Guam have reason to be worried as massive layoffs continue to cascade across industries in South Korea, Taiwan, China, Japan, and the Philippines, causing tourist arrivals to Guam to dip as people go into “survival mode,” causing similar employee cutbacks as revenue slows down for Guam businesses.
The fourth victim of the coronavirus is the credibility of the government of Guam. At the time I was writing this article, Guam had no test kits on island, but Guam’s governor is loudly proclaiming that “Guam is coronavirus-free.” How does she know the island is coronavirus-free? Without an organized and comprehensive screening system in place, we are taking people’s word they are fine, in direct violation of one of the most powerful rules of epidemic management: “test and verify.” Every day, hundreds of travelers from affected areas walk the streets of our island, with no screening.
What are Guam leaders doing to protect our people? What are they doing to stabilize our economy? Our economy is starting to wobble, but you wouldn’t know it based on the types of legislation our senators are introducing and passing while the world economy starts gearing down. The government tax collections are starting to suffer, yet we still see no effort on the part of senators to introduce policies that will reduce the government operating costs, or tax burden on citizens.
We are looking to Adelup for leadership to instill confidence, but their efforts are tarnished as they use the pandemic as an excuse to push their personal agenda to build a new Guam Memorial Hospital that will not come on line for nearly a decade after the current pandemic is over.
We are looking for leadership to address challenges besetting our tourism industry as the number of countries affected by the coronavirus goes up. All tourist destinations are reporting huge drops. Even Las Vegas is reporting large numbers of people cancelling reservations.
Unless a miracle happens, it is very likely the coronavirus will be the tipping point that pushes the world’s economies into recession, which will hit Guam harder than the rest of the United States because we have a small local economy and a very large local government that requires $1 billion to operate.
Since the beginning of the Leon Guerrero-Tenorio administration, we have all been waiting for the reduction of government operating costs all politicians promised on the campaign trail. If a recession hits, and business privilege tax and payroll tax collections drop, where will the government of Guam get the revenues it needs to keep operations at their current level?
I am trying hard to find a silver lining in this dark cloud, but I am worried about how our people are going to make it through the coming challenges. For most of the service sector workforce on our island, existence is like a high-wire act with no safety nets, too many bills, too little income, and inadequate healthcare coverage.
By the time you read this article, the world will be different; there will have been a lot of decisions made, and I pray our politicians made the right ones. Only time will tell.
Ken Leon-Guerrero is the spokesperson of Guam Citizens for Public Accountability. Send feedback to kenleonguerrero@yahoo.com