DOI Header

Remarks As Prepared for Delivery for
the Honorable Dirk Kempthorne, Secretary of the Interior
2006 Conference on Business Opportunities in the Islands
Honolulu, Hawaii
November 13, 2006

         Thank you, David (Cohen, Deputy Assistant Secretary for Insular Affairs).

          Distinguished heads of state, governors and other dignitaries, ladies and gentlemen:  Welcome to the 2006 Conference on Business Opportunities in the Islands.  It’s truly an honor to be your host, and I sincerely thank each and every one of you for making the effort to be here.

          [John Glenn story – ends with “Who are you? I’m your new best friend.]

          You might be wondering the same thing John Glenn was wondering. Who are you? And what is the Secretary of the Interior doing in about the least Interior place one could imagine -- on an island in the middle of the ocean addressing a conference focused on doing business on islands in the middle of the ocean?

          You aren’t the first person to wonder that. Ronald Reagan used to say that that only in Washington could the agency in charge of hundreds of millions of acres of federal land and its wildlife – all of it outdoors – be called the Department of the Interior.

          But that’s the way it is.

         As Secretary of the Interior, I am responsible for federal policy in U.S. territories and for overseeing federal assistance to the Federated States of Micronesia, the Republic of the Marshall Islands, and the Republic of Palau.

         Let me give you a quick history of how this came about. At the end of the 19th century, the United States acquired Guam in the aftermath of the Spanish-American War. At about the same time, we took possession of American Samoa under a treaty with the British and Germans. Later, during the First World War I, we purchased the U.S. Virgin Islands from Denmark for what seems today as a ridiculously low price of $25 million. Finally, in the aftermath of World War II, we took over administration of the Northern Marianas, the Marshall Islands, Micronesia and Palau – territories that previously had been occupied by Japan.

          Guam, American Samoa, the Northern Marianas, and the U.S. Virgin Islands remain territories of the United States, each with its own independent government. The Federated States of Micronesia, the Republic of the Marshall Islands, and the Republic of Palau have become independent nations and are known as the Freely Associated States. They have a special relationship with the United States that I will refer to later.

          These islands each have their own unique history and culture, dating back hundreds or thousands of years. In many places, these ancient people were far ahead of their time.

          For example, the peoples of the Pacific islands were the first to demonstrate to unbelieving western sailors the possibility of sailing into the wind. When Ferdinand Magellan sailed across the Pacific in his square-rigged caravel, he was amazed to see the small canoes of the people of Guam sailing towards him - against the wind!

          The early people who inhabited these islands had an intuitive understanding of the invisible forces of wind and water on their vessels, based not on computers or complex mathematics but by their own keen observations. They mapped the stars and learned to navigate so that they could sail across the ocean. They explored the remote islands of the Pacific thousands of years before the birth of Eric the Red or Christopher Columbus.

          They passed down their knowledge of the sea from generation to generation through oral tradition, from navigator to navigator. Today the peoples of the outer islands of Micronesia continue to build and navigate ocean-voyaging canoes and sail them according to traditions begun thousands of years ago.

          The ability to navigate the seas meant the ability to colonize. Wherever these ancient mariners landed, they settled and built cultures that are as rich and diverse as any on Earth.
Last year, American families experienced the rich culture of Palau when a New York fireman named Tom Westman outwitted, outplayed and outlasted 19 other contestants on a remote island as part of the popular reality show “Survivor.”

          Today, by way of the shifting tides of history, the peoples of these islands with their long history and rich traditions are part of the American family - and the American experience.
So, in effect, over the next two days, you will have the opportunity to meet members of your family. I hope that you find ways to do business together that will benefit both the people of these islands and your companies.

          The ancient Chinese military strategist Sun Tzu –wrote the “Art of War,” a book still read at military academies. In that book, he made a statement that, while certainly true of generals leading armies, is also true of businessmen leading companies.

           “Opportunities,” he said, “multiply as they are seized.”

          This conference is about opportunities. It is about opportunities offered. It is about opportunities that can be seized. It is about opportunities that, if seized, will multiply, producing more opportunities.

          The seven island areas represented here today offer a world of business opportunities to those who are bold enough to seize them.

          When we think of these islands, the first thing that crosses our minds is spectacular beauty. They are renowned for their world-famous beaches, crystal blue waters and coral reefs. They have a rich and diverse cultural heritage.  Taken together, they are, quite literally, where America’s day begins and ends.

          Equally important, they are part of America’s economic frontier – areas with untapped economic potential like the American West in the 1800s and Alaska in the last century. Because they are either American territories or Freely Associated States, they offer unique competitive advantages.

          First, they are close to important, growing, international markets along the Pacific Rim and in Asia – or in the case of the Virgin Islands, to the continental United States, the Caribbean and Central and South America.

          They offer a platform for entering these foreign markets without many of the risks normally associated with developing international markets. A business that wants to expand its operations overseas typically has to worry about political risk, currency risk, the difficulty of doing business under a different legal system, the difficulty of operating in a non-English-speaking environment and a host of other challenges. 

          You will not face these challenges if you do business in the territories.  They all have safe and stable political environments.  They all use the U.S. dollar.  They all have the protection of the U.S. flag.  They have English-speaking workforces with a level of education significantly higher than what you’re likely to find in the developing world. 

          Although not part of the United States, the Freely Associated States are safe and stable democracies that use the U.S. dollar. Their systems of government are modeled after the American system and they are under the umbrella of U.S. military protection.

          The islands present business opportunities in three general areas: the first is military contracting. The second is contracting associated with U.S. government development grants. The third is new private sector business development, especially with on-going improvements to the islands’ business infrastructure.

          While the U.S. military operates in all seven island areas, the primary opportunity for military contracting is in Guam. The Defense Department is relocating 8,000 Marines and assorted other units to Guam.  This will require major redevelopment of the existing infrastructure and new construction around the island.  The development costs are being borne jointly by the United States and Japan, and the cost figure is in the billions.  This is a long-term project. The first move is slated for 2010. The schedule of projects runs through 2020.
At the same time, the Interior Department is a significant source of U.S. government funding for the insular areas, providing opportunities for contracting.  Interior’s Office of Insular Affairs has an annual budget of more than $425 million to assist the islands. Much of this funding takes the form of grants to improve island infrastructure that will provide a foundation for future business growth.

          These grants are used to build hospitals, clinics, schools, roads, airports, seaports, power plants, water and wastewater systems, and purchase hardware and software for financial management.  The list goes on. There are boundless opportunities for U.S. companies to participate in these projects. In doing so, you can gain a business foothold on the islands from which to expand into other enterprises.

          Most of the people who determine how these grants are used are right here at this conference. Today is a good day to seize the opportunity to make connections and explore ways to participate in the development of the islands’ infrastructure.

          Finally, the islands have underway on-going improvements in the business infrastructure of the islands that will open up opportunities for private sector investment. In Palau, for example, a $149 million project known as the “Compact Road” is nearing completion.  Funded under the U.S.-Palau Compact of Free Association, this road will finally open the interior of that island up to economic development.

          Likewise on the other island groups, opportunities abound for hotels, manufacturing, transshipment, software development, technology services, and other businesses.
This, of course, is the Third Conference on Business Opportunities in the Islands. More than 1,500 people attended the first two conferences in Washington D.C. and Los Angeles in 2003 and 2004. Since then, Interior also has conducted business opportunities missions to Guam, Saipan, and Palau, the U.S. Virgin Islands and American Samoa.

          These conferences and business opportunities missions have begun to bear fruit for both the islands and a wide variety of companies. Let me give you a few examples of new business ventures and partnerships that grew out of these conferences and business opportunities missions.

Sun Tzu was right. Opportunities do come knocking on the door of those who are willing to seize the day.

          The next two days will give you a chance to learn about and find these opportunities.  The government leaders of the islands are present, up here with me on the dais and throughout the room.  Business people from the islands—people who could be your local partners—are also here in force. 

          We also have an impressive collection of senior federal officials who can tell you all you need to know about opportunities in the islands that are funded by the federal government, either through the Department of Defense or a host of civilian agencies. 

          Finally, we also have with us international institutions such as the Asian Development Bank that can tell you about the projects they’re funding.

           We’re going to try to give you as much information as we can, so that you can do what businesses always do— identify new opportunities, and figure out new ways to create value and prosperity for yourselves and for the islands.

          Before I close, let me make a couple of important points. The first is that the Department of the Interior does not endorse any particular project, business or opportunity.  Our role is simply to bring all of you together, and from the looks of this room, we’ve done a pretty good job.  As always, you are responsible for doing your own due diligence.

          The second is that this conference is about promoting win-win opportunities.  We are trying to promote partnerships where island businesses and off-island businesses can work together to achieve success that they couldn’t achieve separately.  

           We’d like to see these partnerships generate jobs and economic prosperity in the islands.  We’d also like to see these partnerships generate profits for off-island partners. This in turn will lead to further investment, jobs and opportunities in their home states. 

          I started with a quote from Sun Tzo. Let me end with one from Winston Churchill.

          “The optimist,” Churchill said, “sees opportunity in every danger; the pessimist sees danger in every opportunity.”

          I encourage you to take the next couple of days and not just look at the risk of doing business on these islands, but also see the great opportunity they hold for you and your companies. These islands with their rich histories and unique cultures are indeed our economic frontier. They are waiting for the modern-day equivalent of business pioneers to develop this frontier that abounds with so much potential.

          In the next couple of days, you can seize this opportunity. I whole-heartedly encourage you to do so. As the old expression goes, “The future is now.” Let us today take hold of the future.