PHILIPSBURG--In its new white paper St. Maarten Macro Economics and Suggestions Going Forward, St. Maarten Hospitality and Trade Association (SHTA) questions the basis of economic data that is currently in use for St. Maarten and influences the underlying foundation of policy development by government, the Dutch, and the new Caribbean Body for Reform and Development COHO.
In its conclusions, SHTA said there is ample reason to question the official gross domestic product (GDP) data set. Important tools for establishing GDP like supply and use tables as well as input/output (I/O) tables are not being used.
Discrepancies between the balance of payments (BOP), travel exports and the tourism exit surveys (TES) require significant review.
“Considering that tourism is our main economic activity, there should be a demonstrable correlation between tourism expenditure and real economic activity (GDP). This has yet to be seen in the data sets available,” SHTA says.
“Considering the drop in tourism expenditure from the pre-Hurricane Irma highs, productivity in St. Maarten has substantially reduced. Tourism exports when compared with government income point to a highly unsustainable level of taxation required to support the spending. Tourism exports are needed to generate government income and it is imperative to invest in productive capacity to generate those exports.”
SHTA also concludes that St. Maarten urgently needs reforms that create economic sustainability. “The COHO country packages were developed to meet that need. Unfortunately, the packages were developed in the absence of the social partners, on what appear to be significantly inflated GDP numbers. As such it is unlikely to achieve the intended government income.
“The course we are presently on moves us away from the goal line. It is imperative that the government, together with the social partners, comes to grips with our economic reality and uses all available resources to push an inclusive agenda that is broadly supported by all partners.
“As a society, we need to determine our best way forward and that includes understanding what is flawed and why it is so, in order to make informed decisions about how to better our future. The sooner we start the sooner we will get back on track,” SHTA says.
