Posted on: Monday, August 27, 2001

Editorial
Hawai'i economy can't rely solely on others

Two recent financial stories dramatically illustrate the difficulty Hawai'i faces as it struggles to build a solid economic future for itself.

One story was positive: A job fair on the Kona coast of the Big Island suggests there a deep shortage of workers — particularly construction workers — in this area of upscale hotels and luxury homes.

The other was not so positive: The economies of Asian countries who depended on the booming high-tech industry in the United States are hurting badly. With the demand for microprocessors and electronic equipment in a slump, the export economies of Malaysia, Taiwan, Korea and even Japan are slumping.

And this will boomerang on the United States as the citizens of those countries find themselves less able to buy U.S. high-tech exports.

How do these two stories relate?

The mini-boom on the Kona Coast is largely the tail end of the fantastic high-tech economic boom on the Mainland as silicon millionaires looked around the globe for places to spend and invest their wealth.

Many, particularly those from the West Coast, saw Hawai'i, and Kona particularly, as an attractive and relatively affordable place to put their money. It's a good bet that the decisions being made today in California and Washington are far more cautious and far less likely to produce a spillover effect on Kona two or three years out.

And those decisions are being made in part on the news from Asia and the long-term prospects there.

The point of all this for local policy makers — both public and private — should be obvious. We cannot make long-term plans based on short-term phenomena elsewhere. Yes, we should take advantage when the Japanese economy is strong or West Coast money is flowing.

But we must be constantly alert to the fact that today's good news can quickly become tomorrow's bad news. Longterm stability is only possible when the major factors affecting our economy are in our own hands.

This will be a long time coming. But if we do not push hard to build a domestic, sustainable economy, we will always be subject to the boom and bust cycles of others.