DEIS Overstates Economic Impact

A study done by University of Guam professor Dr. Claret Ruane found that the DEIS overstates the build up’s direct and indirect economic impacts by 41 to 118 percent during the construction phase and by 17 to 93 percent during the operational phase.  This is because the figures in the DEIS are based on a Hawaii model, which Dr. Ruane argues does not accurately reflect economic activity on Guam.

According to Dr. Ruane’s report, the DEIS overstates the total impact on Guam’s economy by $2.29 billion dollars during the construction phase between 2010 and 2016, with there being more than a $1 billion dollar difference in 2013 and 2014 alone.

A copy of Dr. Ruane’s report can be found here.

“(UOG)–The military buildup will have an effect on Guam’s economy, but by how much is up for debate as the multiplier model used in the draft environmental impact study is based on Hawaii’s consumer spending, which yields a much higher spending multiplier than what would apply to Guam. Dr. Claret Ruane, an economics and finance professor and resident economist for the University of Guam’s Pacific Center for Economic Initiatives, explains in a recent technical report that the macroeconomic multipliers, and spending multipliers in particular, used in the draft report should be recalculated using a Guam-based model to develop more accurate projections regarding the economic benefit of the proposed military buildup. Ruane posits that the draft study estimates overstate the build up’s direct and indirect economic impacts by 41 to 118 percent during the construction phase and by 17 to 93 percent during the operational phase, thus paint a rosier picture than presented…” Read the rest of the Marianas Variety Article Here