Finance Minister Ardwell Irion was on point with his recent comment (see Monday paper) that the 14.4 per cent gross domestic product (GPD) increase predicted by the Central Bank of Curaçao and St. Maarten (CBCS) in 2022 does not mean the country is out of the danger zone. After all, there was a contraction of no less than 22.1 per cent in 2020 due to the unprecedented COVID-19 crisis, while this year’s rebound will only end up being around 3.4 per cent.
Moreover, even with full resorts and multiple cruise ships in port during the next few months, it will take time before these earnings filter down into the local economy and reach prior levels. Almost 800 businesses applied for monthly payroll support to compensate for lost revenues at the peak of the pandemic and must now survive without it.
Nevertheless, the tourism outlook is positive and that had not been the case for a good while. It’s obviously extremely important to stimulate this still-fragile growth.
For that reason, concerns remain about planned restructuring measures, some of which are part of the so-called “country package” to be supervised by the Caribbean Reform and Development Body COHO agreed on with the Netherlands. Although no doubt well-intended and in certain cases necessary, their immediate effect on the already-struggling private sector must be taken into consideration.
Granted, a real estate tax for non-residents, aggressively collecting unpaid lease land fees, a tax on direct imports (mail orders) and raising the wage ceiling for Social Health and Insurance SZV coverage to 120,000 Netherlands Antillean guilders annually may not seem very drastic. However, any potential negative impact they could make together short-term on the dominant hospitality industry only now coming out of a deep and prolonged dip cannot be overlooked, particularly under the current difficult circumstances.
Conventional wisdom would suggest that – especially in rough seas – it is probably better not to rock the boat too much.
