PHILIPSBURG--The private sector part of St. Maarten’s economy is “shrinking, while the public sector part increases,” says St. Maarten Hospitality and Trade Association (SHTA) in its recent newsletter. The Association does not consider the imbalance “to be sustainable.”
SHTA contended that public sector growth had put an increased burden on the shrinking private sector. “In most cases, this additional burden has not resulted in improved economic infrastructure. Neither sector can survive this trend,” the Association said.
To improve the economic prospects of the country, public sector functioning and responsibilities “need to be (re)evaluated.”
Government’s payroll expenses since 10-10-10 have only increased. Continuously shifting political alliances and coalitions have played a large role in this, said SHTA.
“Hundreds of pages of reports” from international and local institutions point out that the public sector should take measures to improve economic prospects. Apart from “being paid lip-service,” most of the recommendations have not been implemented, said SHTA.
“This lack of implementation is usually blamed on lack of public sector resources, meaning, first pay more taxes and then we can do it, turnover tax being a prime example. When resources are found and allocated they are usually consumed by producing more plans and bureaucracy as opposed to being invested in concrete actions that benefit the economy,” said SHTA.
It has become “painfully clear” that 10-10-10 did not provide the structural changes required to safeguard a healthy financial position for St. Maarten as a country within the Dutch Kingdom.
SHTA is “aware” that Government’s income from taxes needs to increase to deal with this new debt.
SHTA “strongly advocates” that the Ministries of Tourism, Economic Affairs, Transport and Telecommunications (TEATT) and of Finance start working “in unison.”
“Fiscal measures directly influence our economic performance and in a small open economy are the single biggest tool to steer policy. Any unilateral changes by either TEATT or Finance can and most likely will adversely affect the other,” SHTA said.
It urged the Ministries together with all stakeholders to provide a framework for improving both fiscal and economic prospects. SHTA urged that decisions made be made to “ensure the long term viability” of the country.
