The economic growth of 0.1 per cent for St. Maarten in 2016 projected by the Central Bank (see related story) obviously means a slowdown compared to last year’s 0.4 per cent, but it’s better than none at all as was the case with Curaçao. The latter is no reason to gloat, also because the two Dutch Caribbean countries are joined in a monetary union where the performance of each affects the totality.
That there was any expansion of the local tourism economy is in itself a pleasant surprise, considering especially the considerable drop in cruise passengers. For next year a growth of 0.5 per cent is expected, but this depends on many factors and time will tell whether that was a realistic estimate or not.
Inflation is said to have been negative at -0.2 per cent this year mostly due to lower oil prices, but if one were to ask the average consumer about the cost of living they probably wouldn’t say it went down. A positive rate of 0.3 per cent is forecast for 2017, mainly because oil prices are on the rise again.
While the public finances have improved, the need to implement measures to increase Government income in a more sustainable manner was again mentioned. The recently installed William Marlin Cabinet II intends to do so; among other ways, with fiscal reform towards more indirect taxes.
A word of caution is in order. To be truly effective, introducing a sales or value-added tax will probably necessitate the use of uniform sealed cash registers at stores and other businesses to enhance compliance, as Curaçao experienced with its OB. This requires quite some effort and, of course, money, so that achieving the desired result may take a while.
What’s just as important is to stimulate private sector initiatives and entrepreneurial activities primarily in the hospitality industry that actually enlarge the proverbial pie, rather than just giving the national treasury a bigger slice.