Published On: Tue, Oct 29th, 2013

VBC: Realistic look at Curaçao economy is necessary

WillemstadWILLEMSTAD – The Curacao Business Association (VBC) finds that opinion about the Curaçao economy are divided. Minister Stanley Palm of Economic Development shows positivism because of smaller expected economic contraction, others believe that he is a tad too optimistic. This is according to the VBC board in their newsletter of October.

"The vision of the Minister is that the expected economic contraction may be positively adjusted at 0.9 percent instead of the previously estimated 2.2 percent for this year. Although there is still a contraction, but it is less severe. This relative improvement from a negative situation is for the Minister reason to be positive. It is not too bad and it is going in the right direction with the economy. The growth of exports (tourism and containers carrying goods) is, according to the minister the main reason for the reduction of shrinkage, "said the VBC, responding to figures minister Palm previously announced this month.

"On the basis of, among other, the following developments and facts others are, however, of the opinion that the Minister was a tad too optimistic: in the last five years there was an average annual real economic growth of 0.5 percent, while for 2013 and 2014 a contraction is expected, the business survey from Statistics Bureau for the first half of this year shows a declining trend of investment, sales and results in the private sector continues and worsens, unemployment and job losses are on the rise , the number of visiting tourists has been increased but at the same time there are indications that large hotels threatening to end up in the danger zone, or if they are not already there (Rif Resort, Kura Hulanda, departure of Hyatt)," the VBC indicated in the newsletter. Also private investors are making any investments. According to the VBC, the dispute over the state of the Curaçao economy resembles the eternal debate about a half-filled glass is half full or half empty. Depending on how one looks at the economy, there is an optimistic or a pessimistic development. To get out of this impasse, it might be advisable to look at the economy with a realistic view. Soon it will prove what is good or is not and what should be done to improve.

Barriers

The VBC gives several examples: "An average annual economic growth of 0.5 percent is according to international benchmarks low and not enough to effectively solve the major financial and socioeconomic issues. The aim will be to increase the growth, promote investment and remove barriers which impede this growth. The association continues; “Waiting for a license for more than one year, then get it retroactively, but trying not to provide the inherent benefits related to the license (the Ctex issue) cannot endure the international standards of effectiveness.”

Also the VBC observes that one cannot expect confidence in the economy and the future with when there is no political stability, referring to five cabinets in a period of four years. There is also cause for concern about developments in tourism, which is our biggest growth sector, where large hotels are faced with problems. "Through a realistic and rational look at these issues and act accordingly with the appropriate measures, the discussion about a half full glass can be avoided. The economy of Curacao will benefit from it," the VBC concluded.

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