U.S. Military Buildup and Rising Asian Economy Converge to Reshape Guam
Calvo & Clark Provides Business Guidance and Legal Expertise
Hagåtña, Guam, May 28, 2008 – In March of 2008 representatives from the nation’s largest defense contractors, builders, financial institutions and professional services firms, along with their counterparts from Japan, Korea and the Philippines, converged on the island of Guam in the Western Pacific. They came to attend a three-day industry forum focused on the opportunities for new business anticipated to result from the planned transfer of more than 10,000 U.S. military personnel to the island in the course of the next five to ten years.
Military Buildup
The Pentagon first announced its plan to relocate the Third Marine Division, now stationed in Okinawa, Japan, to Guam in 2005. This move, along with the augmentation of Air Force and Naval forces already stationed on the island, is expected to increase the total number of military personnel and dependents on Guam from 14,000 to 38,000 by 2014. In addition to military personnel and dependents, the buildup of U.S forces on Guam is expected to attract another 20,000 construction workers, doctors, lawyers and other professionals.
If all goes according to current projections, the move will balloon Guam’s present population of 173,000 to over 200,000 and increase the island’s annual tax revenue from $500 million to $700 million. The move, projected to cost $12-15 billion and funded in part by a $6.1 billion contribution from the Japanese government, should prove a boon for those firms selected by the federal government to participate.
Guam’s Leading Law Firm
For companies interested in doing business on Guam, an important first step is to select and retain local counsel. Calvo & Clark was founded in 1992 and has offices in Guam, Saipan and San Francisco. The firm’s general commercial practice embraces complex civil litigation, international law, finance, real estate, land use and development, communications, business licensing, bank regulation and licensing, and government regulations.
While its clients include many of the largest and most prominent local companies in Guam and Micronesia, much of the firm’s work involves the representation of U.S. mainland and international businesses. As such, Calvo & Clark is unique among law firms practicing in Guam. It is a national firm engaged in the representation of some of the largest companies in the U.S. and Pacific Rim in litigation and transactional matters. And yet, it is also a local firm, adept in dealing with uniquely Guamanian matters, such as the island’s court system and regulatory agencies.
Economic Boom Times in the Pacific
As Guam prepares to assume its new role as the military’s principal operational platform in the Western Pacific, it at the same time anticipates a significant uptick in both direct investment and commercial activity arising out of its trade relationships with the rest of East Asia. Since the mid 1970s, Guam’s economic fortunes have moved in close tandem with the Japanese economy and the resultant inflow of Japanese tourists and investment money.
After slumping into a prolonged recession following the collapse of its real estate market in the early 1990s, Japan appears to have finally regained its feet. In Guam, this is manifest in the steady increase in Japanese visitors to the island, which in 2008 will likely exceed the high water mark of 1.1 million set in 1997.
Japan has also reemerged as a major investor on Guam, principally in the hotel and resort sector. In fact, Tokyo-based Ken Corp.and its affiliates, which began investing in Guam in 2005, now own some of the finest oceanfront hotels on Guam, including luxury resorts such as the Hilton Guam Resort and Spa, the Hyatt Regency Guam, and the Sheraton Laguna Guam Resort. Attorneys at Calvo & Clark handled all of these transactions.
But unlike the boom which spurred much of the island’s new growth in the late 1980s, investment in Guam this time out will be supported by more than Japan alone. In addition to mature economies such as Korea and Taiwan, the rapid growth of China, the Philippines and Vietnam, all within a four-hour flight to Guam, should contribute greatly along with Japan toward boosting Guam’s trade, tourism and investment sectors.
A U.S. Jurisdiction in the Heart of Asia
Guam’s attraction to foreign investment is further enhanced by the fact that, as a U.S. jurisdiction, it is governed by a well developed body of statutory and common law. Investors and creditors that put their assets in play in Guam know that their contract rights will be fairly and expeditiously enforced. In addition to its court system, Guam is unique among emerging East Asian economies, in that it does not restrict the sale of land to native or indigenous persons or businesses.
To learn more about how Calvo & Clark can help your company succeed in the rapidly growing Guam, Micronesian and Pacific Rim marketplaces visit our website at www.calvoclark.com.