The Central Bank says that after respective declines of 4.1 per cent in 2017 and 8.1 per cent in 2018 mostly due to the impact of Hurricane Irma, St. Maarten’s gross domestic product (GDP) is expected to increase again by 2.3 per cent next year. This means there is obviously still much catching up to do before the country’s tourism economy reaches pre-Irma levels, but things at least appear headed in the right direction.
Substantial risks remain, including the loss of correspondent banking relations, delays in the execution of planned private sector investments due to lengthy and complex administrative procedures and delays in the disbursement of rebuilding funds. Granted, such problems are not easily solved, but a bigger effort must be nevertheless be made to effectively address them, so the island’s recovery is not bogged down more than it already has been.
Except for construction, real added value dropped in all sectors, combined with higher unemployment and reduced wealth. These are the harsh realities of the day, but keep in mind that the situation could have been far worse without the honouring of most insurance payment commitments by local companies and financial assistance primarily from the Netherlands.
Speeding up the release of grants from the Dutch-sponsored Trust Fund managed by the World Bank will be a key factor going forward and the same goes for tackling the red tape and lack of decision-making reportedly holding back several major projects. Continued growth certainly seems feasible at this point, but it will take nothing short of an “all-hands on-deck” approach.
Happy New Year.
