WILLEMSTAD - Curaçao is becoming increasingly dependent on tourism, a situation long familiar to Sint Maarten. This is revealed in an upcoming study by Dr. Jose Jardim, Dr. Shekinah Dare, and Christopher Rigaud from the Central Bank of Curaçao and Sint Maarten (CBCS). While Curaçao historically boasted a more diversified economy, it is now more focused on tourism due to external shocks and economic challenges.
International tourism has become a crucial pillar for both Curaçao's and Sint Maarten's economies. Tourism is recorded as travel services in the current account of the balance of payments, encompassing all expenditures by international tourists. This generates significant foreign exchange earnings but also entails costs, such as the import of goods to meet tourist demand.
Differences
In the past, Curaçao had a more diversified economy with key sectors like oil refining, international financial services, and ship repair. However, the closure of the refinery and a decline in tourism from Venezuela have contributed to an increased reliance on tourism.
In contrast, Sint Maarten has always heavily relied on tourism, particularly from cruise and stay-over tourists. This reliance is further strengthened by the island's strategic location near the United States and other cruise destinations.
The study indicates that in Sint Maarten, every dollar earned from tourism results in approximately 62 cents spent on imported goods, reducing the net contribution of tourism. This impact is less pronounced in Curaçao, partly because tourists in Curaçao mainly come from Europe and spend less on imported goods.
Strategy
The researchers conclude that while tourism is crucial for the balance of payments, it should not be the sole source of foreign exchange earnings. The pandemic highlighted the importance of a diversified economy.
For a stable economic future, Curaçao and Sint Maarten should also develop other sectors, such as renewable energy in Curaçao and the logistics sector in Sint Maarten. Deep economic reforms are necessary to attract investors and support economic growth.
