Central Bank: Fundamental changes needed to improve labour market

WILLEMSTAD/PHILIPSBURG–Due to growth remaining lacklustre in the monetary union over the past years, the unemployment rate is relatively high in both Curaçao and St. Maarten. In particular, the unemployment rate among the youth is high. Curaçao and St. Maarten are currently facing unique opportunities to reach a higher growth path, reported the Central Bank of Curaçao and St. Maarten on Wednesday.

However, growth will be inclusive only if the labour force has the qualifications needed in the market. Hence, measures to improve the labour market and reduce the unemployment rate in a durable way should be high on the policy agendas of the new governments of both countries.

As an increase in production tends to lead to a decline in unemployment, the governments of both countries need to focus on policies that stimulate economic growth in the short run. However, in the longer run, more fundamental changes are needed to improve the labour market in a sustainable manner.

In that context, current policies and institutions that have an impact on the functioning of the labour market, productivity growth and job creation need to be addressed. For example, in both countries the education system needs to be improved to provide youngsters with better opportunities when entering the labour market.

Also, vocational training is important for acquiring the skills needed in the labour market. Furthermore, the effectiveness of labour market protection, minimum wages and work permit legislation should be assessed and, if necessary, adjusted to attain a better balance between protecting workers and being competitive.

Source: The Daily Herald https://www.thedailyherald.sx/islands/64022-central-bank-fundamental-changes-needed-to-improve-labour-market