Guam Primer
By Chee (Letitia) K. Law-Byerly

Editor’s note: The following is offered to provide information that we believe will be useful to those planning to do business on Guam. It is our hope that those who are new to our island will find it useful, and those who are already on Guam will refer potential partners, clients and vendors to this issue of Guam Business.

Where America’s day begins:

In 2000, federal law designated the ninth time zone under U.S. jurisdiction “Chamorro Standard Time.” The time zone was named in honor of the historical unity of the Mariana Islands and the original inhabitants of the island chain. Chamorro Standard Time is Greenwich Meridian Time plus 10 hours. Lying west of the International Dateline, Guam is one day ahead in time of Hawaii and the rest of the United States. Guam’s official slogan, “Where America’s Day Begins,” highlights its geographical position. A territory of the United States since 1898, Guam is the westernmost of all U.S. territories.

Location:

Guam lies 13 degrees 38 minutes North latitude and 144 degrees 44 minutes East longitude. It is the southernmost and largest of the islands in the Mariana archipelago, a group of 15 islands located within approximately three hours flying time of major Asian cities. Select cities and their distances from Guam are: Manila, 1,597 miles west; Tokyo, 1,558 miles north-northwest; Seoul, 1,992 miles north-northwest; Taipei, 1,246 miles northwest; and Hong Kong 2,026 miles northwest. Hawaii lies approximately 3,828 miles east of Guam with a typical flight between the two destinations having a travel time of seven hours. The Marianas Trench, lies beside the island chain to the east.

Guam’s land area and geography:

Guam covers an area of approximately 212 square miles, and runs about 30 miles in length with a width of 4 miles to 12 miles at its widest point in the south. A majority of the island is surrounded by a coral table reef with deep water channels. The coastline areas are characterized by sandy beaches, rocky, cliff lines, and mangroves. Shaped like a footprint, Guam was formed by the union of two volcanoes; a limestone plateau in the northern and southern sections of the island. The relatively flat north is home to a majority of Guam’s population and businesses, while in the south, cascading waterfalls, seldom visited hiking trails, and an abundance of lush agricultural lands provide a relaxed, laid-back island lifestyle.

The island’s weather:

Guam’s climate is characterized as tropical marine. As in most tropical islands in the western Pacific, the weather on Guam is warm throughout the year with less humidity from November through March. The mean annual temperature near sea level is about 81 degrees Farenheit with monthly means ranging from 80 F in January to a little over 82 F in June. Rarely does the temperature exceed 90 F during the daytime hours or fall below 70 F at night. The relative humidity commonly exceeds 84% at night throughout the year, but the average monthly humidity hovers near 66%.

Guam’s climate is characterized by two distinct seasons: a dry season from January to May, and a rainy season from July to November. June and December are transitional months. The mean annual rainfall varies from about 80 inches in the central and coastal lowlands up to 110 inches on the uplands in southern Guam. A wide variation in rainfall can occur from year to year. The easterly trade winds, usually between 4 and 12 miles per hour, are dominant throughout the year. Only occasionally do winds exceed 24 mph, except during major tropical storms or typhoons. Small scale storms or squalls can occur at any time and with little notice. The likelihood of typhoons is greatest during July through December, but they can occur during any month of the year.

Population:

According to the U.S. census conducted in 2000, the population of Guam then was 154,805. The 2005 statistical update by the Guam Bureau of Statistics and Plans put Guam’s population at roughly 168,564.

A trip to Guam is like visiting the four corners of the globe. Guam is considered the hub of the Western Pacific and is undeniably Micronesia’s most cosmopolitan destination — a true example of the great American melting pot. The largest ethnic group are the indigenous Chamorros, accounting for 43% of the total population. Other significant ethnic groups include those of Filipino (26%) descent, other Asians of Chinese, Japanese, Korean, Thai, Vietnamese and Indian ancestry (13%), Pacific Islanders from Micronesia (7.6%), Caucasian (6.8%) of both European and North American ancestry.

Roman Catholicism is the predominant religion, with 85% of the population claiming an affiliation with it. The official languages of the island are English and Chamorro. The programmed U.S. military buildup planned for 2012 though 2014 will cause an unprecedented population increase — approximately 24-25% or 40,000 people — which will significantly impact Guam’s limited and aging infrastructure.

History and government:

Guam, an unincorporated Territory of the United States, was originally settled by the Chamorro people several thousand years before the Spanish conquered Guam in the late 17th century. The United States claimed Guam after the Treaty of Paris ended the Spanish-American War in 1898 and except for the Japanese occupation during World War II, Guam has been governed by American laws since then. The Organic Act became law in 1950 and governs the relations between Guam and the United States and provides for full American citizenship for the people of Guam.

Since 1968, the people of Guam have voted for their governor and lieutenant governor, a unicameral legislature, municipal mayors, and a non-voting delegate in the U.S. House of Representatives. The local courts include the Superior Court of Guam and the Supreme Court of Guam, and a federal district court that has jurisdiction in matters involving federal law.

The political relationship established by the Organic Act has been evaluated by the people of Guam. In 1982, the people voted to pursue a Commonwealth status. A Commonwealth Act was drafted in 1988 and introduced to Congress, and reflected the people’s desire to retain strong political ties with the United States while striving for greater self-government and latitude in economic areas.
In short, Guam is a U.S. community in the Western Pacific. The people are protected by the Constitution of the United States; the U.S. dollar is the currency; and the Internal Revenue Code is the island’s income tax law.

Economic drivers:

Tourism is Guam’s main economic driver. Guam’s visitor industry began when the first planeload of Japanese tourists arrived on a Pan American World Airways flight from Tokyo’s Haneda Airport in 1967 and Guam joined the ranks of new exotic destinations that travel-hungry, adventurous Asians would visit. During calendar year 2008, Guam received 1.1 million visitors, 75% of whom are Japanese and nearly 10% Korean, according to a preliminary Visitors Arrival statistical report from the Guam Visitors Bureau.

While tourism industry stakeholders lament the drop in visitor arrivals in 2008 compared to previous years – averaging 1.2 million from 2005 to 2007 – the tourism industry remains a significant employer and revenue contributor to the local government’s coffers. A December 2008 Current Employment Report issued by Guam Department of Labor showed a total job count of 60,840 out of which 5,260 workers are employed in hotels and other lodging places and about 10,980 persons are employed in the island’s tourism-related services and other industries. The Guam Hotel and Restaurant Association reported that during 2008, Guam’s hotels paid $14.2 million in Gross Receipts Tax and nearly $21 million in Room Occupancy Tax to the Department of Revenue and Taxation. The island has 25 hotels with 7,543 rooms.

The second largest industry in the private sector is retail trade with 11,540 workers, followed by the construction industry which employs 6,460 people. It is anticipated that the construction industry will continue to grow on Guam with the impending military buildup. The increased share of employment in the construction trade in recent times has boosted the private sector’s average hourly and average weekly earnings to $11.47 per hour and $416.36 per week respectively according to the December 2008 Current Employment Report.

In the public sector, the local government is the largest employer with 11,350 employees while the federal government civilian worker population on Guam numbers 3,760. The December 2008 Current Employment Report shows the average hourly and average weekly earnings of a GovGuam employee at $18.51 per hour and $776.63 per week.

Temporary, non-resident workers:

As of Jan. 30, 2009, the population of non-resident alien (H-2B) workers on Guam is roughly 1,651, according to the Guam Department of Labor Alien Labor Processing and Certification Division office. The Philippines is the No. 1 source of temporary non-resident labor, followed by China and Japan, a distant third. Of the total number, the construction industry has roughly 1,400 H-2B workers followed by health spas with about 40 people.

Temporary non-resident workers with H-2B visa status are permitted to work on the island up to three years. Employers are subject to stringent hiring, visa application and extension or renewal processes, and are bonded to ensure the repatriation of the temporary workers once the three-year term is up. In May 2008, federal law exempted Guam and the Northern Mariana Islands from the national cap on H-2B workers. Guam’s DOL Alien Labor Processing and Certification Division office anticipates that a number of different sectors will request foreign workers, but by far the construction industry will have the bulk with an estimated projection of a 250% or more increase over the current number by 2014. The Guam Department of Labor Web site, www.guamdol.net, provides details on regulations and compliance on alien labor processing and certification as well as forms and briefings to employers who are petitioning for temporary non-resident workers.