The St. Maarten Hospitality and Trade Association (SHTA) is concerned that the private business share of the economy is shrinking, while the public sector share grows bigger (see Tuesday paper).
Although the story didn’t provide statistics to back up that claim, there can be little doubt government’s payroll and general expenses have increased considerably since the days of the former Island Territory.
Some of that is obviously related to achieving country status per 10-10-10, because tasks of the dismantled Netherlands Antilles were taken over. This newspaper warned on several occasions that the elaborate administrative structure being created at the time was not in keeping with St. Maarten’s tradition of “small government and big business,” partly due to the rapid development of its tourism.
On the other hand, the latter had led to a backlog in social services and provisions that needed to be addressed. It turns out government went too far and structurally spent more than it earned, leading to accumulated deficits and unpaid debts that now must be settled and will affect the budget for years to come.
Collecting unpaid taxes and improving fiscal compliance may increase the income, but it’s clear that major cost reductions also will be required. An across-the-board cut at the seven ministries is a short-term emergency measure, but ultimately a critical look ought to be taken at what government really does and how it actually goes about that.
SHTA in any case says the increased expenses in most cases have not resulted in improved economic prospects, but rather added bureaucracy. A re-evaluation of the very functioning of government consequently is called for.
All over the world efficiency measures are being taken, some of it driven by the ever-growing possibilities of Information Technology (IT). The trick is to enhance effectiveness by doing more with less.
