Hawaii

Economic policy

Business activity in Hawaii is limited by physical factors: land for development is scarce, living costs are relatively high, heavy industry is environmentally inappropriate, and there are few land based mineral operations. On the other hand, Hawaii is well placed as a trading and communications center, and Hawaii's roles as a defense outpost and tourist haven remain vital. The Department of Business, Economic Development and Tourism (DBEDT) is the lead agency for economic development and planning. The Office of Planning, a separate agency attached to the DBEDT, has specific responsibility for the continuous process of long-range strategic planning. In 2003, on-going projects in the Office of Planning included a task force on "Recapturing the Magic of Waikiki," a case study in keeping resort areas vital and attractive; implementing the EPA-funded Brownfields Cleanup Revolving Loan Fund program; mapping the islands' agricultural subdivisions; implementing a state Smart Growth strategy, including conducting stakeholder and public information meetings to increase awareness of Smart Growth principles and practices. The Aloha Tower Development Corporation (ATDC), formed in 1981 to develop the area around the historic landmark in downtown Honolulu, is another separate agency attached to the DBEDT. The Aloha Tower Marketplace, completed in 1994, was its first major project. ATDC seeks to attract private investors to both strengthen the international economic base of the community and to enhance the beautification of the waterfront. The area has been included in an Enterprise Zone (EZ), making business tenants eligible for tax incentives. In 2003, Hawaii has 19 designated EZs, which are areas with high rates of unemployment, poverty and/or public assistance. Another separate agency attached to the DBEDT is the High Technology Development Corporation (HTDC), established in 1982. Other separate agencies coordinated by the DBED include the Hawaii Tourist Authority, the Natural Energy of Hawaii Authority, the Hawaii Community Development Authority, the Land Use Commission, and the Housing and Community Development Corporation. The DBEDT administers the state's Foreign Trade Zone (FTZ) program, established under a grant issued to Hawaii by the federal Foreign-Trade Zones Board in 1965. As of 2003, 13 sites on the islands of Oahu, Maui and Hawaii had received FTZ designations, and, of these, three general-purpose and four special-purpose, zones were active. For FY 2001 it was reported that 301 firms from 33 countries had taken advantage of the customs-exemptions and enhanced facilities offered in the FTZs. Other divisions within the DBEDT include the Business Development and Marketing Division; the Research and Economic Analysis Division; and the Energy, Resources and Technology Division.