Looking Out On The Horizon: Opportunities for Economic Recovery in 2018

Opportunities for Economic Recovery in 2018 Looking Out on the Horizon

In an attempt to get a pulse of the status of the economy for 2018, and what lays on the economic horizon, the course of the economic prospectus should be changed as there are still many opportunities for economic growth and investment here on the island that can lead us on the road to economic recovery.

TEXT BY HELEN GRIFFITH

There are a significant number of projects that will materialize this year that have the power to fuel the impetus towards an economic revi talization. A number of key public investments are in the pipelines and promise to deliver that much-needed momentum to start us on our journey to economic recovery. In addition, several initiatives within the private sector, from both foreign and local investors, have been facilitated by the government and are now in their early phases of development.

At a recent presentation held by the Ministry of Economic Development, Minister Steven Martina laid out an overview of the plans that the government has in store for the recovery of our local economy. The event was kicked off with Prime Minister, Eugene Rhuggenaath’s endorsement of the plans. He acknowledged that the recent downturn in the economy was due to a number of different factors which amounted to “a perfect storm” and that Curaçao must take aggressive measures to change the course of the economy. He appealed to the greater business community for their support through private investment and highlighted the need to create an attractive environment for foreign investors as well.

As Minister Steven Martina presented the details of the island’s economic outlook, he noted that there were significant factors that led to a sudden economic downfall. The political and economic crisis in Venezuela has

undeniably had a tangible effect on the island with the lion’s share of Curaçao’s trade coming from Venezuela. Also, due to this crisis, pro duction at the Isla Refinery has also drastically decreased. This is further compounded by the recent embargo that Venezuela’s President Maduro has enforced, which has essentially served to de-capitate all travel and trade between the two nations. The economy also had another drawback when the agreements with candidate for the management of the oil refinery failed, and in effect were nullified. In addition, the downsizing of Insel Air also served to have a drastic impact on airlift and the number of visitors to our shores.

But the message delivered by the Minister presented a number of development projects that are already in place that will serve to give the economy that much needed boost. Several pub lic investments are already underway including: the neighborhood improvement projects at Sapaté, Tera Kòrá and Kortijn/Otrobanda; the upgrading of the Koredor area; the construc tion of the public rest area and beach facility at Marie Pampoen; and a 40Million injection into the tourism sector including marketing, airlift and cruise contracts.

Several semi-public investments were also noted, including the construction of the new Aqualectra Diesel Power Station, the Airport Expansion Project and the construction of the new Cruise Terminal “Tula”. Indeed Mr. Martina highlighted an “ambitious strategy” that encompasses both investment and struc tural reform to stimulate the economy and encourage both local and foreign investment.

There were several major private investment projects that were also discussed, including the new residential developments at Grand View, Rif St. Marie and Blue Bay; the new floating docks that will soon be installed by Damen Shipyards and the construction of the new Chobolobo Plaza in Salinja.

We can also take into account the additional injection of investment capital and income brought in by several major developments in the tourism sector. Already underway, we have the refurbishment of the Curaçao Marriott Hotel and its expected re-opening later this year; the construction of the Marriott Courtyard Hotel; the development of the Hard Rock Resort, and the recent completion of the Coral Estate Resort. Each of these projects promises to add a significant number of hotel rooms and tourist attractions to the island, further increasing its appeal as a tourist desti nation.

There is undoubtedly a need for an increase in airlift to the island, and it is hoped that in the coming year, the government will have suc cessfully completed negotiations with several new airlines facilitating a marked increase in the number of regular flights to Curaçao. The follow-through of the Airport Expansion Project, is evidence of the Airport Authority’s forward-thinking commitment to seeing that this need is met. Indeed, one cannot work without the other. With the launching of these and other new hotels, there will be a clear increase in the demand for flights to Curaçao, and the logical conclusion would be for the air lines to begin establishing new routes for this newly expanded market and newly expanded

airport. One must also acknowledge the efforts of the Curaçao Tourist Board, with the implementation of their aggressive Tourism Marketing Plan, as indeed it is equally impor tant to not only provide expanded facilities and infrastructure to the tourism market, but to also get the word out there.

The completion of the new Mega Pier also holds great potential for further economic growth as CPA now has the capacity to simul taneously berth more cruise ships each day. With the continued efforts to revive the Punda and Otrobanda shopping districts, and with the renewal of the Pietermaai district and now the Scharloo area, visitors will undoubtedly inject a greater amount of US dollars and Euros into the economy. CPA held a ‘soft’ opening of the Mega Pier in November of 2017, but will be having their official launch at the beginning of 2018. Another significant driver to the economy will be the establishment of the Multi Commodities Center of Curaçao (C-MCC) at the airport. For the upcoming year, the interim location of the center will be at the old departure lounge of the airport, while awaiting construction of the new commodities center facility adjacent to the airport. This free trading zone holds the potential for a significant increase in jobs, not only during its construction phase, but also

“These investments will also serve to provide the stimulus needed to attract further foreign investment and trade.”

in the long run, once large-scale trading has been established. In addition, the C-MCC will serve to facilitate the Dutch Caribbean Stock Exchange (DCSX), by hopefully expanding their number of listings. This enterprise will undoubtedly inject a substantial amount of tax income, which can be further utilized towards investing in education and health care on the island. Currently, Curaçao trades and exports approximately 1 billion guilders per year in gold. With a similar set-up to the Dubai Commodities Market, the C-MCC Development Group, LLC, plans to trade a large variety of commodities including gold, diamonds, oil, coffee and much more.

As these projects commence in 2018, there will undoubtedly be an increase in employ ment, which will also serve to trigger expenditure on the island. The government stands ready to prepare the island’s workforce for this increase in demand for jobs. Minister Martina illustrated an aggressive Economic Recovery Framework, encompassing accelerated public and private investments while simultaneously triggering workforce planning and develop ment. These investments will also serve to provide the stimulus needed to attract further foreign investment and trade. One important factor supporting this Economic Recovery Framework is the restructuring and reorganiz ing of several government procedures so as to facilitate a smoother process for foreign inves tors. Mr. Martina coined the phrase: [from] “Red Tape to Red Carpet.”

The Chamber of Commerce, (Kamer van Koophandel), stands ready at the starting gates to facilitate and assist all of the projects carded for 2018, and any others in the pipelines. John Jacobs, Director of the Chamber stresses that the responsibility of economic recovery falls not only on the Ministry’s shoulders, but on the shoulders of the entire population at large, and calls for the civic duty of Curaçao’s citizens to look towards a grander scale of eco nomic development and progress on a national level and not just simply on a personal level. As a community, we look forward… towards the horizon.

NEWS BRIEFS

PLATFORM ISLANDIFY LAUNCHED FOR TOURISTS Last November CHATA, (Curaçao Hospitality and Tourism Association), and Profound Projects joined together as partners to launch the new directory platform entitled, Islandify. It is designed to help consumers find local businesses in the tourism industry or related to it, such as restaurants, supermarkets, beauty salons and even gas stations on the island. In addition, it provides users with the possibility to explore new places of interest.

HATO - BEST CARIBBEAN AIRPORT IN 2017 The Caribbean Journal, the largest travel website for the Caribbean region, has awarded the Curaçao’s Hato International Airport as the best Caribbean airport for 2017. They based their choice on improved experiences of travelers who went through the modernized Curaçao airport. This is the outcome of an ongoing expansion and improvement plan that Curaçao Airport Partners has been executing since 2014, by renovating facilities for departing and arriving passengers, as well as increasing the variety of shops and food & beverage outlets.

PROGRESS OF CINEX FOR INVESTORS ASSISTING By the end of 2017 Cinex, (Curaçao Investment & Export Promotion Agency), was assisting over 40 leads, companies and private citizens, to obtain the necessary permits required to enable new investments and start new companies in Curaçao. In addition, over 150 further leads have shown interest in investing in Curaçao, many of which now plan to visit the island in early 2018 to evaluate their ideas. There is a great variety of areas covered by the companies that approached Cinex to assist them in the procedures to start operating in Curaçao. In addition, Cinex recently opened an office at the Curaçao House in The Hague, to better serve potential European investors.

CUROIL PREPARED TO IN THE REGION EXPAND Curoil, the exclusive distributor of fuel, oil products and bunkering in Curaçao, Aruba and Bonaire, is expanding its activities in the Caribbean region. Last September the company purchased the tanker ‘Scott Berlin’, making it possible to offer more bunkering services in the wider Caribbean, to ships and uti lity companies. As such, Curoil already successfully completed their first off-shore assignment in Trinidad & Tobago. In the company’s strategic growth plan, Curoil also signed a memorandum of understanding with KTK, (Curaçao Towage Company). In addition, Curoil recently signed a five-year agreement with CubaPetróleo for providing them with gasoil and jet fuel. Their demand for gasoil matches with what Curoil already delivers on the Curaçao market. Curoil also signed an agreement with ECASA, that currently manages 22 airports in the Caribbean, enabling the 2 companies to exchange information, knowledge and expertise on investments in the fields of infrastructure, bunkering and product sales.