Hawaii keeps image
of bad for business

The issue: Hawaii has scored lower
than most other states in its ability
to attract new business.

HAWAII'S reputation of being unfriendly to business has received more confirmation, this time from a national study conducted by Boston's Suffolk University. The state is ranked 43rd in ability to attract new business and help existing companies grow. High costs and government policies are among the causes.

Hawaii's low grades in some categories of the study are matters of social policy not likely to change, but others clearly are areas in need of reform. The study, conducted by Suffolk's Beacon Hill Institute for Public Policy Research, is subject to criticism for political reasons but it probably reflects the way most employers regard conditions for doing business.

"In our view," the study's authors say, "a state is competitive if it has in place the policies and conditions that ensure and sustain a high level of per capita income and its continued growth." The study ranks states in 38 categories, ranging from crime rates to government policies and an array of financial indicators.

Among Hawaii's biggest knocks was for its 26 percent union membership among the work force, second highest only to Massachusetts. "Strong unions hinder flexibility and discourage firms from locating in the state," the study says.

The state's many immigrants -- 16.4 percent of the population, fifth highest in the country -- earn a plus in the study. "The more foreigners relative to the native-born population," it deduces, "the more motivated the work force is likely to be."

Hawaii pays the nation's highest electricity prices at $36.71 per million Btu and the fifth-highest average rent for a two-bedroom apartment -- $839 -- but it has the nation's lowest per capita income, $21,594, adjusted for the cost-of-living index.

The state was tied at dead last in high-tech companies as a percentage of all companies in the state, only .15 percent. "The stronger the high-tech sector, the better the prospects for economic growth," it says. Governor Cayetano has tried to attract high-tech companies to the islands, but the study indicates a lack of success.

Following the sharp decline in Hawaii's sugar industry, the state's yearly exports per capita are only $231, less than half that of the second-lowest state, Montana. The amount indicates whether a state is "competitive with foreign countries as well as other states," the study says.

Hawaii finished first in only one category, and that was a mistake -- listed among 10 states with workers compensation collections per employee totaling $0. In reality, Hawaii has one of the most generous -- and costly -- workers comp programs in the nation.



Budding kava industry
nipped by the FDA

The issue: Concerns about
the supplement's possible link
to liver damage draws a warning.

THE Food and Drug Administration's warning about the possible risks of ingesting kava should be observed, although further research is needed to determine if there is a direct link between the herbal supplement and liver damage.

The warning jolted Hawaii's nascent kava-growing industry, made up of about 50 small farms. It also is a blow to the efforts to advance agriculture as one of many industries that may relieve some of Hawaii's economic dependence on tourism.

The FDA cautioned consumers that kava, marketed to ease insomnia, stress, anxiety and menopausal symptoms, may carry a risk for causing severe liver disorders. The agency began investigating kava after a 45-year-old woman who had been healthy before taking the herb suddenly required a liver transplant. Also, European health officials last year reported 25 cases of liver damage among kava users, including hepatitis, cirrhosis and liver failure.

Kava ranks ninth in herbal supplements sold in the United States, with annual sales of about $68 million, according to industry groups. Agrinom, Hawaii's largest grower and exporter, had been shipping between 16,000 and 30,000 pounds of dried kava per month to Germany before concerns were raised in Europe. In 2000, about 80 acres were devoted to kava cultivation, mostly in South and North Hilo, Hamakua and Puna, as farmers sought niche products to grow on former sugar lands. Acreage may have increased by as much as 90 acres since then, according to the state Agriculture Department.

Kava has been used for centuries among Pacific Islanders as a ceremonial drink. Its recent popularity has led to kava bars both here and on the mainland. Kava pills, liquid extracts, teas and dried root pulp are widely available at health food shops, drug stores and supermarkets.

The FDA hasn't yet concluded that kava or its use with other supplements or medication is the cause for the problems, although it is continuing an investigation begun last December.

The situation certainly will hurt Hawaii's kava growers. Nonetheless, the safety issue at this stage overrides economic interests and farmers support further study. The herbal supplement industry also has no quarrel with this. Phil Harvey, a representative for the National Nutritional Food Association, says the industry wants answers because "nothing is 100 percent safe for all people."


Published by Oahu Publications Inc., a subsidiary of Black Press.

Don Kendall, Publisher

Frank Bridgewater, managing editor 529-4791;
Michael Rovner,
assistant managing editor 529-4768;
Lucy Young-Oda, assistant managing editor 529-4762;

John Flanagan, contributing editor 294-3533;

The Honolulu Star-Bulletin (USPS 249460) is published daily by
Oahu Publications at 500 Ala Moana Blvd., Suite 7-500, Honolulu, Hawaii 96813.
Periodicals postage paid at Honolulu, Hawaii. Postmaster: Send address changes to
Star-Bulletin, P.O. Box 3080, Honolulu, Hawaii 96802.

E-mail to Editorial Editor

Text Site Directory:
[News] [Business] [Features] [Sports] [Editorial] [Do It Electric!]
[Classified Ads] [Search] [Subscribe] [Info] [Letter to Editor]

© 2002 Honolulu Star-Bulletin