26/06/2018 – Curacao Chronicle. / You know there’s something terribly wrong when your country starts facing the real possibility of capital flight. This is a process that usually takes place quietly as people export their savings to foreign countries. It wouldn’t surprise me that soon we’ll get to the point when the Central Bank of Curaçao and Sint Maarten will have to shed some light on this issue. Certain is that some key figures of our supreme monetary authority are aware of these disconcerting developments. This would confirm what you frequently hear on the main streets of Curaçao regarding a total lack of trust in our policies, government and even scarier, little hope that things will change in the future.
Stronger economic growth in our country at this point is not about lack of money to invest. Some large local commercial banks have an unhealthy high liquidity ratio as they are finding practically no viable large new projects to finance. We are however in dire need of modern and flexible structures that make it possible to take advantage of the ever-changing global markets. We should embrace innovation and the use of digital platforms. We need to harvest the ‘blue’ economy, the coastal waters surrounding our islands and should understand the potential we have as a producer of renewable energy. We must be able to reach new customers via a network of tax and trade treaties. It’s painfully obvious that heavy reliance on tourism has not led to the desired prosperity.
The government should enable these alternative options, making our island attractive for developing and finding investors for these alternative sectors. Our politicians, however, believe that turning around the current economic tide is not to double down on the need to bring about structural changes, but to go across the ocean and go look for investors in The Netherlands. Talk about putting the cart before the horse!
In my opinion, before inviting investors -local and foreign- you’d better have a solid and coherent story on why these investors should even consider you in the first place. What are you going to say about our antiquated and inflexible labor markets? What’s your sales pitch going to be regarding our stifling cost of doing business, low labor productivity, insufficient attention for skilled immigration and brain drain? And while you’re at it, tell them when our deficient monetary union will be fixed and when we’ll stop using the currency of the Netherlands Antilles, a country that since 2010 doesn’t exist anymore. Be prepared when asked why we don’t comply with the World Trade Organization and why we’re about the only ones left in the world without one single trade agreement.
Big structural adjustments are not easy. The eliminating of protection policies for which I was responsible, got a lot of resistance. It was a necessary step, yet by itself, it doesn’t even come close to all we need to undertake. But, by making us believe that a trip to Holland to invite investors to come on down will solve our problems is just naive.
By Alex Rosaria Alex David Rosaria (50) is from Curaçao and has a MBA from the University of Iowa. He is a former Member of Parliament, Minister of Economic Affairs, State Secretary of Finance and UN Implementation Officer in Africa and Central America.