Dear Editor,
In the spirit of annual New Year reflections I have tried to create a thumbnail picture of how I find the position St. Maarten is in at the end of 2021 and what the future looks like for the country in the coming years.
First and foremost are the studies that show that there is little or no chance of the economy reverting to growth numbers that were seen in the ’80s and ’90s. At that time of fast tourism development, low labour costs through immigration existed, limited government meant limited regulation and low public expenses. Now with the same non-expandable single pillar economy, such growth is extremely unlikely. Without growth in the economy, the size of the population and the cost of the public sector point to longer-term deficits.
The political situation is such that only a party with strong commitment to the entitlements of the public sector is likely to obtain a majority.
The public debt and the immediate liquidity shortages exclude any possibility of investments that might lead to the development of industry diversification and if the capital were to be available it is doubtful whether the dominating political entities would support opportunities in respect of legislation and budgeting. Foreign direct investment in economy expanding and public sector revenue creating activities is unlikely.
Most of the good possibilities of increasing public sector revenue via indirect taxation are limited due to the open border with the French side and harmonization seems not to be realizable. Whilst some revenue increases may be possible through the targeting of specific sectors only a massive change in the taxation circumstances would create a breakthrough.
Whilst the Dutch have a vision of how the situation could be rescued via the COHO [Caribbean Body for Reform and Development – Ed.], it would appear that solutions by the Dutch are not going to receive a hearty welcome nor likely to enjoy strong execution support.
The majority in the St. Maarten Parliament does not have a vision of how the country could break out of its obviously deep economic hole other than all public debt being forgiven by the Netherlands. Even if that were to happen, then unless conditions were to change a new significant debt would quickly be recreated.
The Netherlands wants to restructure various parts of the economy so that they are more sustainable but a record of poor cooperation has led to an approach where coercive financial force is being used which in turn is probably creating more resistance to cooperation, regardless of the sense and value of the proposals.
The population is confused. They resort to parties and politicians who were connected with the growth of the ’80s and ’90s but those parties and politicians do not have the courage and or knowledge to deal with the deeply rooted problems that have now become clear post [Hurricane] Irma and under pandemic. Simply claiming “resilience” does not seem to be turning things around.
Does this paint an accurate picture of Sint Maarten?
Robbie Ferron
