PHILIPSBURG--St. Maarten alone will not be able to cover all the cost of reconstruction, the Central Bank of Curaçao and St. Maarten (CBCS) said. The financial institution pointed out that it is imperative that the Netherlands and international entities such as the European Union support the reconstruction of St. Maarten through financial aid and assistance.
The funds made available should be deposited in a recovery fund and managed in an effective and transparent manner, the Bank advised in an issued statement on Tuesday.
The pace of reconstruction and recovery of St. Maarten will depend to a great extent on how fast insurance claims are settled and on the investments of the public and private sectors to restore St. Maarten’s production capacity. The quality of reconstruction also is important, the Central Bank suggested. “St. Maarten will have to invest in the upgrading of homes, public infrastructure and commercial properties so that they can better cope with future hurricanes and, hence, reduce disaster risks.”
St. Maarten’s economy is forecast to contract in 2017, with the contraction deepening in 2018, according to its preliminary projections by the Central Bank.
However, the Central Bank has not yet been able to estimate real gross domestic product (GDP) growth for St. Maarten during the first quarter of 2017 due to a lack of data, particularly inflation, stay-over tourism, and public finances data.
Government encountered many issues with its information technology (IT) system during the first months of 2017, causing a delay in the compilation and provision of fiscal and economic statistics. In addition, the “enormous damage” that Hurricane Irma inflicted on the country’s infrastructure in September “will likely further delay the compilation and provision of data.”
Consequently, the Central Bank’s Quarterly Bulletin for the first quarter of 2017 does not include an analysis of the private-sector and public-sector developments in St. Maarten. The speed of reconstruction is crucial to turn Sint Maarten’s economic contraction into growth, the Central Bank emphasised. It further cautioned that if post-disaster reconstruction is slow, the economic contraction will be deeper and longer-lasting.
Tourism is St. Maarten’s main, and basically only, economic pillar, so the devastation caused by Hurricane Irma will have a tremendously adverse impact on the country’s economy, said the Central Bank.
