Today’s Opinion: Defensive reactionsPOSTED: 05/27/11 1:53 PM
The Central Bank is a non-political watchdog of our financial system. When the bank offers an opinion, or when it releases a report about whatever subject, it is based on dry facts. Those facts sometimes don’t sit well with politicians, the masters of the smokescreen.
It is therefore no coincidence that politicians in St. Maarten and in Curacao have dismissed concerns expressed in Central Bank reports about the economy. Growth this year will be flat and it is even possible that growth will be negative, a report by the Central Bank’s research department about St. Maarten’s economy has stated.
Vice Prime Minister Theo Heyliger reacted in style by saying that the Central Bank has been wrong before about our island’s economy and that it is now up to St. Maarten to prove the Central Bank wrong.
In similar fashion, Curacao’s Economic Development Minister Nasser El Hakim disagrees with the Central Bank’s take on his island’s economy. These reports are incorrect, El Hakim said in a press release. To prove his point, the minister referred to the record number of more than 480,000 cruise tourists that are expected to visit next year.
These defensive reactions are based on wishful thinking. The Secretary General of the Caribbean Tourism Organization, Hugh Riley said last week at a press conference in Marigot that “the numbers are up, but revenue is down.”
And how bad is it really? According to Riley the tourism industry has been bending over backwards to keep tourists coming. That effort has in itself been successful and it is something politicians love. But they forget to tell the other side of the story and that is: revenue levels are back at where they were seven years ago, in 2004.
All this indicates that the economy is hurting, and the Central Bank’s researchers have put their finger on it. Politicians, whether they are in Philipsburg or in Willemstad, don’t want to hear about such doomsday scenarios. That makes them look bad – or so they think. And by assuring the public that the Central Bank is wrong, and that the numbers are up, they want people to believe that they are doing everything right and that there is nothing to worry about.
It is this ostrich mentality that will lead to disaster. Our decision makers keep pretending that their personal Titanic is on the right course and that there is no iceberg around to spoil the party.
When the you-know-what hits the proverbial fan those same decision makers will have another explanation for why things turned out a certain way.
From a pro-active government people may expect action when action is needed. To overcome the economic challenges companies need to become profitable again. When that happens there will be more jobs for locals, and there will be more money going around. As this process gains momentum, politicians could finally say that they achieved something.
To lay that claim at the doorstep of voters, our politicians actually need to do something. They have to stop fooling everybody with arrival numbers and airline fairytales and take a realistic look at what is going on in the real world. Governments have to create the conditions for the economy to flourish.
One of those conditions is a flexible labor market. Companies do not fit in political straightjackets that force them to hire a certain percentage of locals, or that force them to offer job security in uncertain economic circumstances with permanent labor contracts.
The first idea, the 80/20-rule, is a disastrous proposition produced by Pueblo Soberano in Curacao. The second issue may surface in St. Maarten once the details of the National Alliance draft legislation designed to stop the abuse of short term labor contracts become public.
While that is in the works, the government may also want to look at the prevailing legislation for the employment of foreigners. We do not at all favor a situation in our labor market whereby locals are pushed aside and whereby foreigners fill jobs they could do. That is simply not sustainable, because in the long term this will lead to social unrest and instability.
But it is quite another thing to make it impossible, or near impossible, for companies to hire qualified staff from elsewhere once they’re out of options among local candidates.
Making sure that locals find employment is without question an honorable goal. But in the end, opportunities for locals increase once the economy is hopping and companies are thriving. As long as the private sector has to endure the current stranglehold the big losers are locals who are able and willing to work.