Published On: Mon, Apr 13th, 2015


Jacob Gelt DekkerCuracao’s nationalism, as governing political ideology, has to be tempered with the experiences of its limitations. A more than fifteen-year stagnation of the island economy has become the stranglehold for such grandiose dreams.

In Latin America and the Caribbean, a centrally planned economy was regarded as the most important means to establish true nationalism. One of the ideological pillars of such a centrally planned economy has been, “Import Substitution Industrialization, ISI.”

From the 1950-1980s, historical effects of colonialism, Euro-centrism, and neo-liberalism gave birth to the ISI-hypothesis. The concept was the brainchild of economists, Raúl Prebisch (Argentine) and Hans Singer (Great Britain-Germany) and became popular with the creation of the United Nations Economic Commission for Latin America and the Caribbean (UNECLAC or CEPAL).

ISI lost its relevance over the last 30 years, when most centrally planned economies collapsed or converted to open markets. Local productions for small island markets were unable to compete in price and quality with new global markets. Free trade with low wage-Asia over the last 30 years underscored that reality beyond any doubt.

Unfortunately, the island economy of Curacao is partially still held hostage by the grand implementation of the ISI-concept. Monopolies and steep import barriers are keeping ISI alive at great expense to economic growth. Curacao has amongst the most expensive water, energy and vegetable rates in South America. Although official monopolies, no longer exist, steep import barriers keep local producers of many products, such as soap, paint and mattresses in the black. Breaking up local cartels turned out to be far more difficult than expected. Only a small local elite benefit from ISI, whereas the majority of the island population is reduced to more poverty by the towering expense daily life.

The cost of production for the latest and largest island economic pillar, the tourist industry, is such that it cannot compete with other Caribbean islands. Recovery of the economy is not possible as long as protectionist regulations for ISI will stay in place.

In addition to ISI, a large number of government owned enterprises, some considered utility companies, or others born out of socialist ideology, cripple all free market developments. These government-owned enterprises have become parking lots for temporarily deposed and mostly incompetent politicians at towering high salaries. Friends and family, rather than market competition and economic reality, ruled the island, and again, at the expense of the poor working class which already had a hard time.

Extensive broad based evaluations, professional in-depth studies and international monitoring institutions all produced hefty analysis, studies and manuals on how to change the present economic situation, but political chaos, the might of unions and the closed elite never allowed any sensible implementation.

Without change, stagnation will rule for at least another fifteen years.

By Jacob Gelt Dekker, opinion columnist for Curaçao Chronicle.

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