Beyond Tourism

[John Maple]

Re: Beyond Tourism

How will Hawaii become a financial hub if it must obey the same laws as Wall Street, when W.S. is physically/time zone-wise closer to Europe and the M.E. (i.e. oil and the Euro)? Asia is very much an emerging market in comparison.

Obviously on our main focus would be on the Pacific Rim. Furthermore, it's easier to break into an emerging than trying to compete with a stable one. I don't think it'd be wise to compete with Wall Street in Europe (not right away, at least). If they can capitalize on proximity to Europe, let's capitalize on proximity to Asia.

And again, American laws are in our favor, since they eliminate many of the problems Asian investors face, such as arbitrary government intervention.

How will Hawai'i become a tech hub if our resources are too finite to support industries with high physical demands/waste by-product? Unless we can make ourselves more attractive than India, we cannot compete with India as the physical locale of the next Silicon Valley. They have a lot of land, a cheaper cost-of-living, less legal entanglements than the U.S. (hello, stem cell research) and 200 engineer students for each American one.

By investing in human capital. As I conceded, Hawai'i won't be looking to be a manufacturing hub. I don't think that Hawai'i has the infrastructure or desire to support it. But manufacturing isn't everything; innovation is key to winning the technological race. That's where a small, well-trained cadre has a comparative advantage against a larger population (which has the edge in manufacturing).

I, as much as anyone, believe in raising up our ed standards to produce a highly numerate generation. I disagree that the result will replace that key economic engine that all successful isle economies throughout the planet run upon: tourism.

What successful island economies? Most of these run well with a service industry that has no interest in raising educational standards. The best small economies--places like Switzerland, Hong Kong, Singapore--have competed against the giants by investing in highly skilled labor forces.

They come. They spend. They leave. As a transient population, they require the varied infrastructure of housing, transportation, entertainment, and shopping. Unlike a resident population, the do not require much of, or suppress significantly our other critical resources, such as schools, hospitals, property tax valuations, etc.

This is precisely why schools, hospitals, and our property taxes are not priorities on the legislative agenda. But our parents get sick, our children need to learn, and our wages can't keep up with the rising cost of living. These aren't a tourist's concerns, but they are ours.

Again, I don't see why the choice needs to be between unlimited growth or massive transplantation and a transient population. Neither choice is desirable and neither choice is necessary.

[Pua'i Mana'o]

Re: Beyond Tourism

John, read this thread first. Allow yourself the double-latte needed to get through this one. And, for giggles, you can help me fundraise to achieve the goals in this post.

If you read them, it will save me a carpal-tunnel flare-up.

[Miulang]

Re: Beyond Tourism

Sadly, Hawai'i has been unable to capitalize on its strategic location (being the gateway to Asia and CONUS) as much as it could and should. The State of Hawai'i, through the Dept. of Business, Economic Development and Tourism (DBEDT), has identified certain strategic areas for economic growth:
Science, Research & Technology; Film, Television & Multimedia; Tourism's New Markets & Attractions; Life Sciences and Strategic Industries such as renewable energy.

There are pretty generous incentives for establishing high tech industries in the State, but not many companies have used the incentives to create jobs for residents, and possibly the incentives are not offset enough by the high cost of living and doing business.

Many of the best and brightest have left Hawai'i for school and opportunities on CONUS because the opportunities do not exist for them to get the training or to find the high-paying jobs in Hawai'i that they can find on CONUS. For instance, in the high tech industry, salaries on the Mainland are consistently at least $10-20k more than in Hawai'i for comparable positions, and the cost of living is less up here. What prompts local people who have spent time working on CONUS to make the move back to Hawai'i now is usually their wanting to be back with ohana.

Hawai'i cannot fully exploit its strategic location because of its ties to the United States. As such, it will always be playing catch up with CONUS. However, one way to mitigate some of this is to move away from the notion that large industries alone can save the state's economy. There's a little known organization based in Honolulu called The Hawai'i Alliance for Community Based Economic Development (HACBED) where nonprofit and community based organizations can get assistance. If more small businesses can be created and nurtured, these would be the kinds of things that would sustain the current population even if tourism disappeared.

As for cleaning up corruption in public office, where would you begin? It would not only have to include officials in the County and State offices, but the federal offices, too.

Miulang

[joshuatree]

Re: Beyond Tourism

As for cleaning up corruption in public office, where would you begin? It would not only have to include officials in the County and State offices, but the federal offices, too.

Miulang

Probably setting up an independent commission against corruption only answerable to the govenor.

They come. They spend. They leave. As a transient population, they require the varied infrastructure of housing, transportation, entertainment, and shopping. Unlike a resident population, the do not require much of, or suppress significantly our other critical resources, such as schools, hospitals, property tax valuations, etc.

I think you are oversimplifying the transient population. What about tourists who visit and then decide to retire here or buy a vacation home here? They drive up real estate, don't really care about local matters such as schools or infrastructure, become an added burden on existing health infrastructure, etc.

Again, I think we are looking at diversifying the economy into finance or high tech in black and white terms. Who said transplants for these industries have to be completely outsiders? What about all those that left under the category of brain drain? Also, just because if we promote these industries, that doesn't mean you have to be the next Wall Street or the next Silicon Valley. Carving a niche category is good enough. No one is saying abandon tourism. But having your eggs in multiple baskets helps stabilize and insulate the Hawaii economy and probably will even help bring balance to how development occurs in the islands. Right now, it's 100% geared towards tourism.

[Miulang]

Re: Beyond Tourism

You keep referring to these high tech jobs commanding high wages. Like?

Example of the discrepancy that exists between the salary a high tech job on CONUS offers and one in Hawai'i (if you could find a comparable job in Hawai'i): As an IT Project Manager with PMP certification, I could earn anywhere from $90-110k+ up here in Seattle (plus bonus, if I am a fulltime employee as opposed to a contract employee). Even without the certification but with experience, I wouldn't expect to make any less than about $80k/year. I bet the same position in Honolulu wouldn't get me more than about $70k, along with the higher cost of living.

Miulang

[Pua'i Mana'o]

Re: Beyond Tourism

I think you are oversimplifying the transient population. What about tourists who visit and then decide to retire here or buy a vacation home here? They drive up real estate, don't really care about local matters such as schools or infrastructure, become an added burden on existing health infrastructure, etc.

Please go and read my links. This very issue has been tackled, particularly as it leads to the issue of US law too bloated to deal with limited foreign land ownership in the practical manner that other island economies around the world deal with this (go look! Go read it all, go!)

Again, I think we are looking at diversifying the economy into finance or high tech in black and white terms. Who said transplants for these industries have to be completely outsiders? What about all those that left under the category of brain drain? Also, just because if we promote these industries, that doesn't mean you have to be the next Wall Street or the next Silicon Valley. Carving a niche category is good enough. No one is saying abandon tourism. But having your eggs in multiple baskets helps stabilize and insulate the Hawaii economy and probably will even help bring balance to how development occurs in the islands. Right now, it's 100% geared towards tourism.

No one here has argued against a tech industry or diversifying our economy; remember, the initial premise made here has been against tourism, even so far as to mention (without clearly articulating mechanics) "at the expense of residents".

Btw, thanks for chewing on the point. My love for economics, both macro and micro, in particular wrt island economies, spans my whole adult life. Threads like this one don't come around every day, and again, my appreciation is heartfelt.

aloha, PM

[joshuatree]

Re: Beyond Tourism

PM, the links you provided had many pages of posts. I only skimmed through to locate your posts. If there is any specific post you wanted to refer to, just let me know.

Otherwise, the message I am getting from you is that the issue of tourists becoming non-involved residents can be remedied with land ownership rules based on excluding what is considered "foreign" ownership. And if I surmised right, that concept has merit for debate but what I inferred from this thread is how to progress Hawaii beyond tourism within the existing framework. Which means there really is no way of limiting foreign ownership under current US laws.

So within our existing system, better to have transplants that would actually be involved in Hawaii's affairs such as bettering the education system, infrastructure, etc., than having transplants that could care less because it will not affect them.

I don't think the initial premise was against tourism, just more of how can Hawaii move beyond just tourism. And there is some truth to tourism at the expense of residents. Harris's administration seemed more willing to spend city coffers on beautifying Waikiki and sponsoring movies on the beach rather than give any attention to an aging sewage system which we now have to contend with. Is that not promoting tourism at the expense of residents' everyday needs?

[808shooter]

Re: Beyond Tourism

Nice thread idea.

A first important step is to raise the bar for the public education system here in Hawaii. You are correct that a vital ingredient for a knowledge based ecomomy here is a highly educated labor pool.

How to go about making that change in today's political climate though?

My idea is to have private school tuition here in Hawaii become a tax deduction. We have some of the best private schools in the country here in Hawaii so there is no doubt this can be done.

The effect of a tax break will be to enable more local families to send their kids to a private school and choose to pay for elementary, middle and high school. A highly inefficiant DOE will be forced to compete with market forces or lose their "customer base".

I've heard on morning talk radio that we spend $10K+ per year on educating a student. Outsource that $10K in the form of a tax deduction, not a tax credit but a deduction. The state would win out in two ways, one: we would save tons of money and two: lead to cuts in a highty inefficient DOE without taking it head on.

[John Maple]

John, read this thread first. Allow yourself the double-latte needed to get through this one. And, for giggles, you can help me fundraise to achieve the goals in this post.

If you read them, it will save me a carpal-tunnel flare-up.

Mahalo for the links. I read through them all (with espresso ) and found each one interesting, informative and useful.

With respect to sovereignty, my view is that independence ought to be the ultimate goal for Native Hawaiians. I say this both as a Native Hawaiian and as a loyal American. I do not believe the interests of either my people or my country are served by the current arrangement. In this respect, I agree with many of your ideas about the ultimate future of Hawai'i.

While I believe in the fundamental decency of the American people, I also consider myself a realist and a pragmatist. To this end, I believe that even decent people often need to be leveraged into doing the right thing, especially something so drastic as recognizing and atoning for over a century of wrongdoing.

My proposals for a new economic structure in our islands are motivated by a desire to see residents of Hawai'i--native and non-native alike--expand their options vis a vis the United States. By focusing on building a strong economic system, one that provides talented Native Hawaiians with the influence necessary to leverage a pro-Hawaiian agenda. Otherwise, sovereignty will lose steam, as many of its intended beneficiaries leave Hawai'i, perhaps forever.

With this platform, we will have the influence to address our legitimate grievances through the political process. That, I believe, is our best chance of success.

I believe--and evidently, we disagree on this--that a tourist-centered economy is a significant obstacle to this end. And while your link to the Wikipedia article on island countries (very good read, by the way) noted that many island countries rely on tourism, I'm not convinced that these are particularly successful or desirable economies. They make ends meet, but in my view, investing in a transient population means that the needs of that transient population will be prioritized over residents. Schools and hospitals aren't high on the legislative agenda, but hotel rates are. True, transients place less strain on our schools and hospitals--but elite specialization can have a similarly restrictive effect on population. If, for example, Hawai'i established an Institute of Technology and committed its public education system, kindergarten to postgraduate, to top-notch mathematical and scientific training, Hawai'i residents would inherently have an advantage when competing for those elite professions. The credentials necessary to keep a job in Hawai'i would favor students trained in the elite public school system. During the Kingdom period, when the Hawaiian people needed to manage complex international relations, they did so successfully for many years with one of the best educational systems in the world.

You mentioned banking in the Statehood thread, and I agree there are disadvantages we face as long as we stay in the American system. I do not believe, however, that these are insuperable obstacles, and I think we can realize a great deal of success within the current system. Success builds on success--and by having a thriving capitalist community (my personal hope is that these are among the best in the world), Native Hawaiians will have both a platform to advance sovereignty and an understanding of how to improve the banking system in an independent Hawai'i.

Oh, Pua'i and yes, I think that educational missions like yours should be sponsored by Hawaiian interest groups. We do need to see other systems and understand how they work. That will be an enormous, but worthwhile, economic investment.

One place I'm particularly interested in is Iraqi Kurdistan. The Kurds are one of the largest ethnic groups with no recognized nation-state in the world. They are also pursuing an economic development strategy as a platform for political change.

http://www.theotheriraq.com/economic.html

Again, mahalo for sharing your mana'o.

[John Maple]

Again, I think we are looking at diversifying the economy into finance or high tech in black and white terms. Who said transplants for these industries have to be completely outsiders? What about all those that left under the category of brain drain? Also, just because if we promote these industries, that doesn't mean you have to be the next Wall Street or the next Silicon Valley. Carving a niche category is good enough. No one is saying abandon tourism. But having your eggs in multiple baskets helps stabilize and insulate the Hawaii economy and probably will even help bring balance to how development occurs in the islands. Right now, it's 100% geared towards tourism.

This is my major concern--the disproportionate role tourism enjoys in our economy. Most successful economies have a tourism component, but this does not dominate the market the way it seems to in Hawai'i. Tourism will always be an industry here, but I'm not convinced it should be the primary one.

A first important step is to raise the bar for the public education system here in Hawaii. You are correct that a vital ingredient for a knowledge based ecomomy here is a highly educated labor pool.

How to go about making that change in today's political climate though?

My idea is to have private school tuition here in Hawaii become a tax deduction. We have some of the best private schools in the country here in Hawaii so there is no doubt this can be done.

The effect of a tax break will be to enable more local families to send their kids to a private school and choose to pay for elementary, middle and high school. A highly inefficiant DOE will be forced to compete with market forces or lose their "customer base".

I've heard on morning talk radio that we spend $10K+ per year on educating a student. Outsource that $10K in the form of a tax deduction, not a tax credit but a deduction. The state would win out in two ways, one: we would save tons of money and two: lead to cuts in a highty inefficient DOE without taking it head on.

This sounds like an excellent idea. I do believe the monopoly on public education has not been the best for Hawai'i, and I support increased parent choice. Giving tax breaks to parents who send their kids to a private school (or who homeschool their children), as well as a voucher system that allows poorer parents another option besides public education, seem to me excellent ways of supporting a reform agenda against the DOE.

I wouldn't mind, however, if someone took the DOE head-on.

[Leo Lakio]

Re: Beyond Tourism

What about tourists who visit and then decide to retire here ...? They drive up real estate, don't really care about local matters such as schools or infrastructure, become an added burden on existing health infrastructure, etc.

Agreeing with you that this applies to the majority, but I hope you also accept that it does not apply 100%. In my own family, for example, the Alpha Female is yonsei - as an only child, she knows that she will someday return to O`ahu, to care for her parents as they age. I will accompany her, expecting to live the last of my days in Hawai`i.

Since I know this is coming (and I sincerely hope the day is long into the future, wishing continued health and longevity to her folks), and I am likely to be of retirement age myself at that point, I am using the time at present (and for the past decade) to immerse myself in learning, so that I will know more about the place and the cultures I am coming into, and will care about local issues to more of a degree than I do at present.

But yeah - I'll still be an ignorant mainland haole when I get there; I just hope it will be to a much lesser degree than the average.

[pacbasin]

Re: Beyond Tourism

Hawaii Business article in the January issue deals with this same topic if anyone is interested.

[John Maple]

Re: Beyond Tourism

Thank you for posting the article, pacbasin! I read through it carefully and thought about it for some time. I thought I'd share a few of my reflections:

While I agree that more should be done to increase Native Hawaiian presence and input in our visitor industry, I do believe, however, that the problem is more systemic than that--and it comes back to the notion that the visitor industry will always be more obligated to outside interests, as opposed to local ones. In reasonable doses, that's fine; it balances out any isolationist streaks in the community. But there's a reason hospitals are closing while hotels are opening. Hotels are more lucrative, while healthcare for island residents isn't a major priority. I agree with Towill that the responsibility for many of our social problems lies also with government and individual citizens. Yet, as the tourist industry is so fond of reminding us, government and individual citizens are inextricably caught up in the common web of the industry. The tourist industry has a substantial impact, for example, on the Legislature's educational agenda. If the economy depended on highly skilled workers, the Legislature would find ways to ensure competence in our classrooms. As it is, our economy depends on a service sector; a quality education is a luxury only to be afforded the upper and upper-middle crusts.

Again, I don't think stigmatizing tourism is the answer here. Rather, alternatives need to be developed so that tourism no longer needs to be our primary economic resource. No cash crop lasts forever.

[Konaguy]

Re: Beyond Tourism

Again, I don't think stigmatizing tourism is the answer here. Rather, alternatives need to be developed so that tourism no longer needs to be our primary economic resource. No cash crop lasts forever.

All our "cash crops", be it the military, construction/real estate, tourism are not sustainable. Take real estate/construction, this economic facet requires more and more of our land to be paved over. In other words, it is not something sustainable. Also in that aspect it makes Hawaii too reliant on outside economic forces, just like how tourism is affected by any outside economic forces.

[joshuatree]

Re: Beyond Tourism

All our "cash crops", be it the military, construction/real estate, tourism are not sustainable. Take real estate/construction, this economic facet requires more and more of our land to be paved over. In other words, it is not something sustainable. Also in that aspect it makes Hawaii too reliant on outside economic forces, just like how tourism is affected by any outside economic forces.

Yep, that's the issue, nothing lasts forever. The tourist industry may be paying more attention to local sensitivity right now because times are good. But even the articles states, "Hard economic times hit and anything not core to the business, such as cultural programs, ended up on the cutting room floor." Even they validate the need to successfully diversify.