Overview:
A new report warns that billions in U.S. military spending in the Northern Mariana Islands may create only short-term economic activity while deepening long-term dependence on outside contractors and labor. The study argues that without policies prioritizing local businesses, workers and self-determination, military expansion could leave the CNMI with limited lasting economic benefits despite growing federal investment.
WASHINGTON/SAIPAN, 18 MAY 2026 (PACIFIC ISLAND TIMES)—-Washington’s defence spending in the Northern Mariana Islands may temporarily boost economic activity, but it undermines long-term self-sufficiency and fails to sustain local wealth, according to a think tank’s report.
The report says the billions of dollars allotted for military projects on Tinian, Rota and Saipan may appear to offer hope, but a close examination shows they only copy-paste unsuccessful economic models: dependence on external actors, a reliance on imported labor and limited local ownership.
The CNMI report, authored by cultural anthropologist Theresa Arriola, formed part of the Micronesia Security Outlook 2025 released by the Guam-based Pacific Centre for Island Security.
The CNMI’s strategic importance has deepened amid the U.S military’s expanding presence in Micronesia, driven by concerns over China’s growing political and economic ambitions.
The CNMI government has responded by supporting a range of military projects and even went so far as to pivot away from Chinese tourists—once a significant source of its tourism market—and offset this by promoting military tourism. That has not happened yet.
Local leaders had hoped that military expansion would stimulate job creation, infrastructure improvement and long-term prosperity for the CNMI, but one thing is now becoming clear: military investment does not secure local prosperity, the report says.
Militarisation is often framed as a catalyst for economic development in the CNMI, as a justification for further militarisation and a solution to economic hardships.
Yet without “intentional policy frameworks that localise spending and prioritise self-determination, militarisation becomes a form of extractive development,” one that enriches outsiders while leaving local communities underdeveloped and left out of the loop,” the PCIS report says.
The paper explores the relationship between the military buildup and economic marginalization in the CNMI.
“The net result is a surface-level appearance of growth, with little sustainable benefit retained by the local population,” it adds.
The report noted economic leakage resulting from military-related revenue being redirected away from the CNMI.
Military-driven projects, the report says, enrich only offshore contractors, who bring in foreign labour and redirect profits off-island to U.S corporations and federal agencies.
The report cites the U.S military’s voracious need for land to train and test new technologies. It says Chamorro lands are often appropriated for military purposes without meaningful consultation, worsening tensions surrounding land rights and cultural preservation.
U.S military contracts are also often dominated by favored U.S mainland companies with prior experience in military contracting, undermining local businesses’ ability to compete and grow.
In July 2025, a US$238,706 meal-catering contract for military personnel training in the CNMI was awarded to a Texas-based company rather than to a local caterer.
The report noted that local companies are comparatively small, undercapitalised and lack specialized federal contracting credentials, hindering their ability to compete with their national counterparts.
Federal procurement guidelines also often prioritise speed and scale, which automatically place local businesses at a disadvantage, the report adds.
“In theory, subcontracting opportunities exist, but in practice, the majority of the revenue generated by military projects flows back to the United States,” it says.
Dollar leakage is also attributed to the pool of foreign workers hired for military projects. Contractors bring in labor from the U.S mainland, Guam and other countries.
“This labour migration leads to another form of economic leakage: wages paid to non-local workers that often leave the CNMI entirely,” the report says.
Non-resident workers usually spend only a fraction of their earnings locally, sending the rest home or spending it in their home economies.
Local workers also face significant barriers to entry, the report says. Military contracts often require security clearances or federal certifications, qualifications that are not widely held within the CNMI.
The situation creates a paradox, the report says, noting that while the CNMI hosts large-scale federal spending, it struggles with persistent unemployment and underemployment.
“The presence of well-paid jobs does not guarantee local benefit when those jobs are filled by people from elsewhere,” it adds.
While defence projects such as airport runways, road pavements and telecommunication system upgrades are often framed as community-centric undertakings, the report says they are primarily meant to serve the military needs, leaving limited value to the local population.
Military projects are administered by U.S-based agencies, not locally, so decision-making, budget control, and implementation power are held outside the CNMI, leaving local governments with limited authority to influence how projects are carried out or how money is spent.
Even well-intentioned local initiatives, such as requests to prioritise small businesses or community benefit agreements, often stall due to complex federal compliance requirements, the report says.
For instance, military planners acknowledge the need for local labor, but there is minimal coordination with the CNMI’s education system, vocational training institutions, or labor agencies to make this happen.
“The CNMI’s labor force remains largely excluded from participating in or benefiting from these projects,” it adds.
Economic leakage also applies to the loss of natural and cultural ecosystems, the report says.
Large-scale military exercises, proposed bombing ranges, airfield expansions, and pipelines risk damaging coral reefs, contaminating water supplies, and threatening endangered species, the report says.
“Military activity often degrades or displaces this generational knowledge,” it adds.
“The Pentagon’s continued framing of the CNMI as nothing more than a strategic location places cultural identity secondary to strategic utility,” the report says…..PACNEWS