Nearly a year into the COVID-19 crisis, state economic development officials are preparing the latest phase of an ongoing recovery effort that so far has gained little traction.

For people who see an urgent need to help an economy still reeling from the pandemic, there’s good news and bad.

The good news: officials expect to have a number of action items from various sectors by April.

The bad news: the bulk of actions and “implementation pilots” won’t even start rolling out until the spring of 2022, under the current schedule.

During an interview, Gov. David Ige’s economic development co-chiefs, Mike McCartney and Alan Oshima, described the plan, known as “Hawaii 2.0,” as a collaborative endeavor that will be co-created by community leaders and leaders of various industry sectors.

When asked about the apparent lack of urgency surrounding the plan’s creation, McCarthy, who is director of Hawaii’s Department of Business, Economic Development and Tourism, said some ideas will emerge in the short term but that there should be a raft of policy recommendations, all vetted by the public, to present to the Legislature in 2022.

“It’s really not that far away,” he said.

Mike McCartney gets confirmed by a 15 to 10 vote in the Senate.
Mike McCartney, Gov. David Ige’s former chief of staff and economic development chief, pictured here in 2019, has an economic recovery plan that will take two years to roll out. Cory Lum/Civil Beat

This plan to create a plan marks the latest effort by a line of administration officials and contractors whose efforts to help Hawaii’s economy have largely been overshadowed by Lt. Gov. Josh Green, the chief architect of Hawaii’s travel testing program, which has allowed tourism to return to Hawaii without the major spike in COVID-19 cases that some feared.

The travel testing program lets travelers sidestep a 10-day quarantine by obtaining a negative COVID-19 test before coming to Hawaii. That program has helped restore travel to Hawaii, and the jobs that go with it.

But Hawaii’s economy is still far from fully recovered, Carl Bonham, executive director of the University of Hawaii Economic Research Organization, said on Monday.

“We could call where we are stabilizing or we could call it stalling,” Bonham said during an interview after a meeting of the Hawaii House Select Committee on COVID-19 Economic and Financial Preparedness. “It’s sort of a choice of semantics.”

While Green’s project has gotten the most traction, McCartney is in charge of Hawaii’s economic recovery effort. Ige’s former chief of staff, McCartney runs one of the state’s largest departments. DBEDT oversees five divisions dealing with a range of industries, including foreign trade, motion picture production and general business support, as well as 10 other agencies attached for administrative purposes, such as the Hawaii Tourism Authority and State Energy Office.

In April, Oshima, a former chief executive for Hawaiian Electric’s Oahu unit, joined the administration as the Hawaii Economic and Community Recovery and Resiliency Navigator to help McCartney guide the state’s recovery. Oshima hired the Boston Consulting Group, a major consulting firm, which got $1.5 million for an effort that consisted of things like setting up the navigator’s website and creating a color-coded matrix to help officials decide when to ease or tighten restrictions on social and commercial activity.

Then there was the Laulima Alliance, a secretive panel of business and community leaders Ige set up in September to help guide the recovery. It’s not clear what the alliance does because it doesn’t post agendas or minutes.

Lt Governor Josh Green discusses COVID-19 testing with partners before passengers are allowed to arrive in Hawaii from October 15, 2020
Lt. Gov. Josh Green, pictured here in October, was the chief architect of the state’s COVID-19 testing program, which has helped the state’s visitor industry begin to recover. Cory Lum/Civil Beat/2020

WAM Chair: ‘A Hundred Cooks And No Soup’

Now, yet another group, the Hawaii Institute of Public Affairs, is in charge. It’s gotten $750,000 so far and has been tasked with applying for federal grant money to help pay for Hawaii 2.0, Oshima and McCartney said.

Sen. Donovan Dela Cruz, the influential chairman of the Senate Ways and Means Committee as well as the Senate Special Committee on COVID-19, said he’s not impressed. Dela Cruz has had such a testy relationship with McCartney that twice the economic chief has refused to speak before the Senate COVID committee.

Asked about McCartney’s latest endeavor, with yet another group in charge, Dela Cruz was underwhelmed.

“They have a hundred cooks and no soup,” he said.

Hawaii House Speaker Scott Saiki, who has played an outsized role in the state’s response to the pandemic as co-chair of the House COVID-19 committee, was more optimistic.

Saiki said he agreed to co-chair the Hawaii 2.0 effort with Senate President Ron Kouchi because Ige had assured him the initiative would generate results, not just another report.

“This model of decision making by consensus doesn’t work in a pandemic.” — House Speaker Scott Saiki

“When the governor called me and asked to be a co-chair, I told him I didn’t want this to be another exercise in analysis paralysis and there will have to be results,” Saiki said.

Saiki said he was happy to hear that there should be some action items to work with by April. Those will be the result of various industry sector officials who McCartney and Oshima said have agreed to create five action items. Government and private officials will be tasked with implementing the items, McCartney and Oshima said.

At the same time, Saiki said he was disappointed that Hawaii 2.0’s timeline calls for the first pilot programs to start being rolled out in April through June of 2022, only after a series of public meetings and multiple draft plans. Such an approach is counter to the way the House speaker and his committee have approached the pandemic.

Saiki’s House COVID-19 committee is co-chaired by Peter Ho, the chairman, president and chief executive of Bank of Hawaii, and includes people like Dr. Mark Mugiishi, the chief executive of HMSA, the state’s largest health insurer, and Ray Vara, CEO of hospital giant Hawaii Pacific Health.

With such influential community leaders on hand, the committee has served as a counterpoint to the Ige administration, often pushing action with a sense of urgency that seems anathema to the governor’s ponderous, consensus driven style. For example, when Ige’s former public health director, Bruce Anderson, resisted hiring more virus contact tracers that were needed as part of a plan to address the virus and open to tourists, the House committee repeatedly pushed the issue. Anderson eventually resigned.

Saiki said it’s not a good idea to wait more than a year to start rolling out pilot programs.

“This model of decision making by consensus doesn’t work in a pandemic,” he said.

McCartney and Oshima, meanwhile, insist that a deliberative approach is key to creating a sustainable plan.

“There is no magic bullet,” Oshima said.

So far, he said, the “heavy lifting” has been to restore tourism.

One key to Hawaii 2.0, Oshima said, will be to hear from people who disagree with the plans that are crafted.

“We want dissenting opinions, and we should discuss it,” he said. “Otherwise, it just seethes as an undercurrent.”

Oshima likened crafting the recovery plan to something Hawaiian Electric would do when deciding where to place power plants or power lines. While such infrastructure is necessary, he said, it’s important to have buy-in from the community that will be served and people who might oppose having unsightly projects affecting their scenery.

In the end, he said, the deliberative effort with extensive dialogue will help Hawaii more than moving quickly.

McCartney described Hawaii 2.0 as a plan to “go slow to go fast, so we’ll have less disruption and controversy when we put a program in place.”

Hawaii’s Changing Economy” series is supported by a grant from the Hawaii Community Foundation as part of its CHANGE Framework project.

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