Economic Environment

Guam, the largest island in the Marianas chain and the largest of the 2,000 islands in Micronesia, is about 30 miles long and from 4-9 miles in width. With a total land area of 212 square miles, it is about half the size of Hong Kong, roughly the size of Singapore and three times the size of the District of Columbia.

Guam's geographic location contributes to the diversity of its people. It is one of the most cosmopolitan communities in the Western Pacific. Guam’s population in 2001 was 170,638. Approximately 47 percent is Chamorro (Guam’s indigenous people), 25 percent Filipino, 15 percent Caucasian, and 13 percent Micronesian and other Asian (including Chinese, Japanese and Koreans). Several thousand Vietnamese and East Indians also live in Guam. As with most developing economies, the population on Guam is rising rapidly. The population increased 28.2 percent between 1990 and 2001.

Total employment in 2001 was 60,100, this figure has held relatively steady since 1999. The no-growth in employment can be attributed to the substantial downsizing of the government in 2000 and the downturn in the Asian economies that began in late 1997. In particular, the economic woes of Japan and Korea have severely impacted Guam's tourism industry. This likely played a substantial role in the rise of Guam’s unemployment rate from 9 percent in 1997 to 13.0 percent in 2001. Fueled by tourists primarily from Japan, Guam's Gross Island Product (GIP) of $2.77 billion has held steady for the last two years. 1999 and 2000 seems to have seen the worst of the economic downturn for Guam. Unemployment for both years was about 15.3% and GIP fell almost 10% from 1998 to 1999 and has only slightly improved since then. Visitor arrivals reached their lowest point in 1999 at 1.16 million. Arrivals were 1.29 million in 2000, and 1.35 million in 2001.

The 9/11 incident and the continuing weakness of Japan’s economy have taken its toll on Guam’s tourism industry. Hotel occupancy rates have recently been reported at below the 50% level. Japanese tourists are the central element of Guam’s economy. Guam’s tourism diversification efforts to attract Korean and Taiwan tourist has shown inconclusive results at best.

Guam’s overriding goal is to provide jobs for a rapidly growing population, while providing the infrastructure and environment to maintain the quality of life of its citizens. To do this, Guam must address several critical challenges. Most recommendations for the improvement of Guam’s economy focus on:

  • Developing a united political focus in the pursuit of overseas capital;
  • Pursuing the US to make a larger military commitment;
  • Building a closer relationship between government and business to identify the island’s primary development solutions; and,
  • Marketing to different segments of the Japanese population that are currently unaware of the tourist attractions of the island.