Guam grapples with pandemic-induced economic blow fiercer than any typhoon

More than 1.6 million visitors arrived in the fiscal year ending Sept. 30, 2019, mostly from Japan and South Korea, according to the Guam Visitors Bureau. The pandemic snuffed that out.


By WYATT OLSON | STARS AND STRIPES Published: April 5, 2021

The tiny island of Guam has faced its share of natural disasters through the decades, but the economic devastation delivered by the coronavirus stands alone.

“There’s nothing to compare this to historically in terms of length, duration and magnitude,” Gary Hiles, chief economist for Guam’s Department of Labor, said in a phone interview last week. “There have been other events, such as typhoons — and 9/11 caused a temporary contraction — but nothing of this duration.”

“People are scrambling; people are trying to figure out the next step,” said Catherine Castro, president of the Guam Chamber of Commerce.

Guam, a U.S. territory spanning only 30 miles at its widest point, is of vital importance to the Pentagon’s strategy in dealing with an expansive Chinese military. It is home to Andersen Air Force Base, a deep-water port at Naval Base Guam, a robust Coast Guard unit and nearly 22,000 service members, defense workers and their dependents.

The defense sector is a significant part of Guam’s economy, but many of the roughly 170,000 people on the island have come to rely on a vibrant and growing tourism industry for their livelihoods. More than 1.6 million visitors arrived in the fiscal year ending Sept. 30, 2019, mostly from Japan and South Korea, according to the Guam Visitors Bureau.

The pandemic snuffed that out.

In February 2020, when the coronavirus was first detected outside of China, about 160,000 visitors flew into Guam. Two months later, arrivals at Guam International Airport were essentially zero.

“As you can imagine, [the pandemic] closed most of the businesses that had anything at all to do with tourism,” Roseann Jones, an economics professor at the University of Guam, said in a phone interview on March 16. “So, we saw two-thirds of the economy shut down. We have a hotel industry here. We have aviation. We have all of the retail — high-end retail — and the travel support services, rental cars and tour operators. All of that came to a halt.”

The industry remains largely dormant a year after the pandemic began.

A strict quarantine

The rates of new infections have waxed and waned on Guam, as they have in many U.S. cities and states.

As of March 31, Guam had seen 7,807 confirmed coronavirus cases over the course of the pandemic, resulting in 134 deaths.

In combating the virus, officials early on imposed a 14-day hotel-bound quarantine for anyone arriving on the island that still remains in place. Currently, returning residents are allowed to spend their second week of quarantine at home.

By comparison, Hawaii — akin to Guam in its dependence on tourism and defense spending — eased a similar restriction early last fall by requiring visitors to pre-test before arriving.

Guam’s conservative approach to the virus — which has included various levels of mandatory closures of restaurants, bars and clubs, some of which are still in place — has been a double-edged sword. While it has no doubt prevented infected individuals from arriving, it has also likely prevented Guam residents from getting other needed medical care.

“The health system here is very fragile,” Jones said. “I mean, we absolutely rely on being able to get specialized medical care through a network that includes, Hawaii, [Los Angeles] and Manila, so we don't have the resources here to deal with all of the medical care needs that go on.”

Ballooning unemployment

Predictably, Guam went from an unemployment rate of 3.6% in September 2019 to 19.4% in December, the most recent month the statistic is available, according to the Guam Bureau of Labor Statistics.

The island experienced a net loss of 8,000 jobs out of roughly 51,400 that existed before the pandemic began, Hiles said.

“It’s actually worse than that in the sense you only get counted as unemployed if you're totally unemployed,” he said. “That's the official definition.

“But in addition to those completely unemployed, there are a lot who are partially unemployed with significantly reduced hours.”

Guam has no unemployment insurance program, unlike the 50 states, Puerto Rico and the Virgin Islands. Unemployed workers have, however, received the stipends approved by Congress, which was $600 a week under the original CARES Act and then reduced to $300 weekly under a relief bill passed in December.

Jones helped with a recent survey funded by Guam’s governor that resulted in a portrait of those most affected by the economic turndown.

“The profile shows the most affected were women under 40 of Chamorro descent, earning less than $20,000 a year, living in households of five to seven,” she said.

Most have a high school education or less and were spending more than 20 hours a week educating children at home in the wake of school closures, Jones said.

Building a bright spot

The economic bright spot for Guam has been the construction sector, driven in no small part by Defense Department projects and a major airport renovation.

The U.S. and Japan are in the midst of a massive endeavor to relocate about 5,000 Marines and their dependents from Okinawa to Guam.

Marine Corps Base Camp Blaz is being built from scratch beside Andersen Air Force Base in the northern end of the island. The Naval Facilities Engineering Systems Command Pacific spent $265 million on construction projects related to the Marine Corps base in the fiscal year that ended Sept. 30, according to figures the Navy provided Stars and Stripes.

The facilities command projects it will pump another $398 million into these projects during the current fiscal year.

Guam’s Antonio B. Won Pat International Airport is in the middle of $167 million worth of improvement projects, including construction of an international arrivals corridor that will separate arriving and departing passengers.

A Japanese firm has continued construction throughout the pandemic of a vast shopping center near the airport that will house a Don Quixote outlet and other supermarkets.

The pace of coronavirus vaccinations on the island is also encouraging.

Almost 55,000 people on Guam had received at least one inoculation as of April 2, according to government statistics.

Guam government officials have set a goal of fully inoculating 50% of the island’s 125,000 people ages 16 and older by May 1 — dangling the prospect of “adjusted quarantine requirements” as an incentive. The change would allow incoming visitors to skip quarantine if they arrive with a negative pretest.

“I would say that everybody is cautiously optimistic,” Castro said, referring to the vaccination effort.

Guam officials were cheered when the U.S. Centers for Disease Control and Prevention lowered its travel risk for the island from “high” to “moderate” on Monday.

“This downgrade communicates to the nation — and the rest of the world — that we are taking charge and taking control of the virus,” said Guam Gov. Lou Leon Guerrero in a news release Monday. “More importantly, it paves the way for reopening Guam and re-energizing not just tourism, but our economy.”

Jones said that the past year has demonstrated the resiliency of those who live on a speck of land in the middle of the vast Pacific.

“We are finding that businesses have suspended their operations, and some of them are bringing them back online where they can,” she said. “But very few have permanently closed or filed for bankruptcy. So, there is this hunkering down and waiting and seeing and looking forward to the day when we can bring this back.”

Twitter: @WyattWOlson

A sailor plumbs a support wall for a construction project at Andersen Air Force Base, Guam, Nov. 11, 2020.