Published On: Mon, Jun 24th, 2019

Steps must be taken for our country to be resilient

Governor Holiday at Symposium June 2019

CUPECOY — His Excellency the Governor Drs. Eugene Holiday adequately set the tone for the 2019 Governor’s Symposium which was held at the American University of the Caribbean campus in Cupecoy on Friday. In his opening remarks he said that the impact of the hurricanes Irma and Maria in 2017 has set the policies that shaped the economic recovery.

“In the 2017 CARICOM conference which was supported by the UNDP it was estimated that the recovery cost surpassed some US$5 billion and in some countries it surpassed some 3.5 times it’s GDP,” said Holiday. He quoted the CARICOM Secretary General who stated that the magnitude of the reconstruction will require significant levels of financing.

Graph 1 - Irma Impact

According to a report in January 2019 report it stated that hurricanes Irma and Maria caused damages in excess of US $2.7 billion on St. Maarten which is more than 250% of our GDP. “Damages which are still visible in the private and public infrastructure such as schools, our airport, water facilities and some of our hotels.”

The devastation led to the decline in the tourism based economy from 2.5 million in 2016 to 1.8 million in 2018 which led to the drop in foreign revenues by 401 million US dollars which is 47% in 2018, compared to 2016.  He stated that in the last quarter-century the island was impacted “by varying degrees” of several major events  such as hurricane Luis in 1995, the terrorist attacks in September 11 in the United States and the oil crises in 2008 and the recent hurricanes in 2017.

Graph 2b Impact Hurricane Luis

He said that the impact of climate change has led to the rise in sea levels and as a result low lying areas such as Philipsburg and Simpson Bay are being threatened by the sea.

“Our vulnerability calls for special focus and resiliency strategies in the recovery.” He pointed out that the challenges faced after the hurricanes of 2017 gives us an opportunity to invest in our social economic resilience and with that the improvement of our well-being.

Investing in social economic resilience and sustainability is the best approach in the financing gap that we face. He pointed out, that hurricane Irma caused loses of 30% of the GDP and noted that if the economy grew by 1% it will take 13 years to make up the lost and if the economy grew by two percent it will some six and a half years and if it grew by 3% it will take some 4 years to make up for the loses.

It is evident that all of us, including government and businesses, need to make our country more resilient against the impact of external shocks.

Graph 3 Third Oil Crisis

Keynote Speaker Marla Dukharan who is a leading economist in the region said that the impact on several countries were quite severe and mentioned “that it is heartening to see that St. Maarten had recovered so quickly in getting the hotel rooms available and the airport up and running in such a short space of time.”

She commended the island for its effort of rebounding so quickly after the storms of 2017 and although the damage is evident, especially with the boat wrecks, it is still heartwarming and encouraging to see the progress. She indicated with the projection of a 2% growth of the economy by 2020, it will still take several years to get back where we were.

Graph 4 - Recovery rate from Irma

She spoke of the growth of the Cayman Islands where she used a graph to show the increases in the GDP where the country spends less than it earns in the private sector. She mentioned that in the Cayman, they have been able to diversify their economy and as a result the feels that St. Maarten could use this as a model.

She called for an improvement in vocational training and comprehensive labor reform which will give more incentive to hire and to retain staff which will cause the labor market to strive. She pointed out that if the labor market is reformed along these lines, it will help to promote private sector activity and reduce vulnerability.


Related documents & articles:
Full speech Governor Eugene B. Holiday
Full speech Prime Minister Leona Romeo-Marlin
News report “Prime Minister Marlin address challenges and opportunities on shaping St. Maarten’s Economic Recovery