Guam governor advocates for economic diversification as US military buildup continues

RNZ News

15-05-2025

Guam is strategically important to the United States, housing both an Air Force and Navy base. Here, a US F-16 flies along the island's coastline.
Photo:
US Department of Defense
The government of Guam is in talks with the US territory's airport authority to allocate land for a dedicated industrial park in its efforts to position the island as a logistics and defence hub in the Indo-Pacific.
This was revealed by Guam governor Lou Leon Guerrero during her weclomes remarks at the Pacific Islands Development Bank (PIDB) board of governors meeting in Saipan on Wednesday.
Leon Guerrero outlined her administration's efforts to diversify US territory's economy during, speaking extensively on Guam's plans to attract Taiwan-based computer chip manufacturers and support 3D printing technology for rapid naval vessel repairs.
"One of the things I discussed with the president of Taiwan was how we could bring chip manufacturing to Guam," Leon Guerrero told attendees. She said: 'If you provide the infrastructure, they will come.'"
She said such initiatives would enhance Guam's capacity to support the US military presence in the Pacific, especially with regard to shortening supply chains for ship and submarine repairs.
"We are looking at diversifying our economy," Leon Guerrero said.
"And that added manufacturing will improve the supply chain, especially very beneficial for the military build-up because ships and submarines, in terms of needing parts to be repaired, can be repaired quickly."
The US considers Guam a key strategic military base to help it stop any potential attacks.
Photo:
RNZ Pacific / Eleisha Foon
While welcoming Pacific leaders to Saipan, Leon Guerrero acknowledged persistent challenges in Guam's tourism sector due to global economic uncertainties, currency fluctuations, and air service limitations.
"We are still slowly recovering from the [Covid-19] pandemic. It is slow to come back because of global issues - the yen, the dollar - and air connectivity is a concern," she said, noting federal regulations have also constrained certain tourism activities.
The governor said Guam is working with low-cost carriers and international markets, like Taiwan, to restore travel demand.
She pointed to recent increased flight arrivals from Taipei as a sign of progress.
"People from Taiwan love to travel. But they are not going to China because of the issues between China and Taiwan," she said.
"Let's take that opportunity to entice them to come to our part of the Pacific."
She also reiterated Guam's strategic importance to national defense, noting billions of dollars in military spending are flowing into the island. However, she emphasized the need for shared responsibility between the federal government and Guam in building critical infrastructure.
"The military buildup is ongoing. We're working closely with them to finance infrastructure-electricity, utilities. We also want them to give their share for the burden of peace," she said.
Leon Guerrero flagged workforce development as a key economic priority, especially with ongoing construction and business activity.
"We have been very innovative in our training," she said, noting that boot camps and upskilling programs have been deployed. "But that still isn't enough," she added, saying Guam is also pushing for more H-2B visas to fill gaps in the construction workforce.
Governor Lou Leon Guerrero
Photo:
RNZ Pacific / Eleisha Foon
She acknowledged competition with the federal government for public sector employees and noted recent local pay raises have helped retain police officers, nurses, and teachers.
"Workforce is one of the biggest challenges for us. We are also dealing with issues of housing shortages, drug addiction, and telecommunications," she said, noting that new investments, including a modern hospital, are also part of Guam's strategic buildout.
Leon Guerrero urged regional unity among Pacific Islands, especially amid global power shifts and growing emphasis on the Indo-Pacific.
"When we stand together in a united voice, we will win this part of the Indo-Pacific for national security," she said. "Let's leverage that as much as we can so both parties can benefit from it."
She also mentioned the importance of framing climate change discussions with care in a shifting US political environment.
"We need to be careful of what we say in languages and words so that we can continue the relationship with the United States," she said.
Leon Guerrero closed by thanking Pacific leaders from Palau and the Federated States of Micronesia, reaffirming her commitment to collaborative development and security partnerships across the region.
The PIDB board of governors meeting was attended by executive and legislative leaders from around Micronesia.
The agenda included review of the bank's independent audit report, updates on strategic priorities, and each jurisdiction's economic conditions. Multiple speakers cited tourism stagnation, housing gaps, and inflation as common challenges.