The picture of St. Maarten’s economy painted by Finance Minister Richard Gibson during Monday’s Central Committee of Parliament meeting on the draft 2017 budget (see related story) isn’t exactly a pretty one. The loss of two cruise lines alone cost the country 90 million Antillean guilders on an annual basis while more purchases online are eroding Government revenues, particularly the turnover tax.
He spoke of a steep decline in income that despite measures to limit spending will probably lead to a shortfall of NAf. 25 million at the end of this year. Efforts are still being made to come up with more funds to prevent this financing deficit.
Also mentioned were GEBE’s inability “to keep the lights on and cool the rooms of tourists,” traffic moving “at the pace of molasses,” a telephone system that is “not up to modern-day standards” and the move by major resorts to all-inclusive properties which is “depressing businesses that feed off guests” on the island.
Not everybody will be happy about it in already difficult circumstances, but upgrading the Tax Department to improve collection is a logical step. It’s a public secret that way too much money currently “stays on the street” instead of finding its way to the national treasury as prescribed by law.
Fiscal compliance remains a big issue. Not only does it undermine Government’s task to provide a reasonable level of community services and provisions, but it allows unfair competition and honest entrepreneurs suffering negative consequences for doing things correctly.
The best way to tackle the current downturn is with incentives that strengthen the tourism economy. Part of this can be done through private sector initiatives such as the huge Pearl of China project and the Rainforest Adventure Park with its potential to become a major visitor attraction especially for cruise passengers.
However, the public sector too has a crucial role to play by creating the necessary conditions to stimulate sustainable growth, including adequately promoting and marketing the destination. It’s clear that hard choices need to be made and priorities set, but then, nobody said it would be easy.
