WILLEMSTAD/PHILIPSBURG–Both St. Maarten and Curaçao must diversify their tourism source markets to strengthen resilience to external shocks, says acting Central Bank of Curaçao and St. Maarten (CBCS) president Leila Matroos.
More than 50 per cent of the total stay-over arrivals to St. Maarten are from the United States. Consequently, economic cycles in the United States transmit easily to St. Maarten.
“Therefore, in its reconstruction efforts following Hurricane Irma, St. Maarten also should focus on a strategy to improve its tourism product and diversify towards more source markets,” said Matroos in a statement related to the Bank’s 2017 Annual Report released on Wednesday.
The case of Curaçao, where more than 30 per cent of the total stay-over tourists are from the Netherlands, the implementation of the tourism masterplan and increasing airlift from other source markets are much-needed steps to diversify the country’s tourism sector, said Matroos.
Curaçao’s and St. Maarten’s substantial vulnerability to external shocks was emphasised once again in 2017. Particularly, the spill-overs of Venezuela’s deep recession on the Curaçao economy and the severe damage caused by Hurricane Irma in St. Maarten resulted in the real economic contraction recorded across the monetary union in 2017.
“The considerable negative effects that these shocks had on our economies underscore the importance of strengthening our resilience,” she said.
“Although vulnerabilities are inherent to small and open economies like Curaçao and St. Maarten, strategies can be put into place to strengthen our resilience, thereby mitigating the risks associated with external shocks.
“One of these strategies is economic diversification. In general, the Curaçao economy has always been more diversified compared to other more tourism-dependent peers in the region.”
However, if measured by their share in total foreign exchange earnings, sectors such as refining and international financial services have become less important in recent years compared to the tourism sector. Although the growth of the tourism sector is a welcome development, losing other key economic pillars can be considered a weakness, as these sectors have less import-content and are more knowledge-intensive than the tourism industry, she continued.
“St. Maarten also would become less vulnerable to shocks if it had other key economic sectors besides tourism. Therefore, in both countries the public and private sectors should act to strengthen their current economic pillars and develop new sectors,” Matroos said.
Source: The Daily Herald https://www.thedailyherald.sx/islands/80090-cbcs-st-maarten-curacao-must-diversify-tourism-source-markets
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