Friday, Jun 05th

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Editorial - What matters the most

With all the problems making headlines of late, the Macro Economic Report featured in Friday’s paper felt like a breath of fresh air. The local economy showed its resilience last year and the outlook for 2015 is positive.

The estimated 1.6 per cent growth of the gross domestic product (GDP) in 2014 may seem fairly modest, but considering the challenges, including a disruptive hit by Hurricane Gonzalo and considerable political uncertainty following parliamentary elections at the end of August, it’s certainly not bad.

Arrivals went up by 7.1 per cent for stay-over visitors and 12.1 per cent for cruise passengers. Moreover, 334 new business licences were issued compared to 282 in 2013, a hike of 18.4 per cent.

Regrettably, it was mentioned in the same edition that no less than 2,000 such permits are still waiting to be picked up, which must be a frustrating thought to many now trying to get one. The decision to discard those issued before January 1 from August 1 and force the applicants to start and pay for the process all over makes sense, because it regards an obvious waste of valuable resources and six months surely should be enough to get one’s affairs in order.

It is often said that somehow the public sector does not benefit sufficiently from increased business activity and the report appears to confirm that picture. Government revenues were down from 491.5 million to 430.2 million guilders, due to less concession-fee and other income also from its own companies. For example, GEBE already had paid an amount of NAf. 10 million in 2013 that also covered the next few years.

While expenditures also dropped, a deficit of 8.2 million remained. However, 2015 should again see an increase in available means, in which improved collection ensuring greater fiscal compliance is to play an important role.

A GDP growth of 1.3 per cent is projected this year based on usually conservative estimates. Several important construction projects have been announced that could make the end result significantly better.

In short: There is clearly enough reason to be cautiously optimistic about St. Maarten’s immediate economic future, in any case when it comes to the private sector and this ultimately is what matters the most.