Mr. Chairman, thank you, for scheduling this opportunity for the Committee to hear from representatives of the Territories on their economic and fiscal situations. This Committee frequently considers legislation that focuses on specific issues affecting one of the Territories or Freely Associated States -- I believe that there are five such bills referred to the Committee at this time -- but it is also important to step back and examine the broad policies and trends that are affecting all of the insular areas.
We all recognize that islands generally offer fewer development opportunities than the mainland, and that their economies tend to be dependent on just one or two major industries such as tourism, fisheries, or military activity. Islands must also cope with the higher costs associated with the transportation of goods, and they are also heavily dependent on high-cost oil for electrical generation.
In addition to these challenges which most islands face, the U.S. Territories must also cope with changing national and international trends and policies that are often related to their unique political status. For example, changes and trends in trade, tax, and migration over which they have little control can have a profound impact on the islands' economies.
Finally, because of their small size and relatively low wages, the Territories have difficulty building and maintaining the professional staff needed to operate a government in the 21st century. The lack of expertise in economic planning and financial management is of special concern because it contributes to poor accountability and the inefficient use of resources. For example, several agencies within the Territories are designated as "high-risk" grantees because of their inability to comply with Federal grant requirements.
Notwithstanding all of these challenges, it is a tribute to the islands' people and leadership that they are making good progress in improving accountability, and they are actively engaged in promoting investment and economic growth in areas that pose a unique set of challenges.
Mr. Chairman, I look forward to hearing from our witnesses today, and again thank you for taking the time to take a broad look at this important area of our Committee's jurisdiction.
