Unemployment on St. Martin double that of St. Maarten

POSTED: 12/27/11 4:32 PM

Report suggests three way commission on cooperation

St. Martin / By Donellis Browne – A new report by the French Information Desk on Overseas Territories has called for the establishment of a mixed three way commission to strengthen cooperation between St. Martin and St. Maarten. Representatives of the French State, the Collectivity of St. Martin and the Government of St. Maarten are the proposed agencies that would have representation in the body which should formalize relations on security, environment, energy, waste processing, health, education and immigration.

The report sets part an end of 2011 deadline to set up the body, which would also serve to address the differences between the two sides of the island. One imbalance the report highlights is that while the economy on the Dutch side is stronger, the quality of education and health on the French side is stronger.

When it comes specifically to the economy the report states that the inflexible regulations being used on St. Martin is hurting the French territory’s economy. St. Maarten is more attractive to investors than St. Martin because of its “more relaxed regulatory system and lower operating costs and taxes.” St. Maarten also benefits economically from the fact that social benefits and income earned on St. Martin is spent on the Dutch side.

The two main pillars of the economy in St. Martin are tourism and building and public works. The actual Gross Domestic Product in 2009 was set at 560 million euro, which means that each household should have 16, 000 euro to spend per year. This is 12 percent less than what people in Guadeloupe have access to.

An examination of the tourism sector in 2009 shows that 26.7 percent of the people working in St. Martin (1, 590) worked in the hotel and catering sector in 2009 and that the main source market for tourists is North America. The other markets were South America – especially Brazil – Central America and the Caribbean. Almost 90 percent of the visitors were cruise passengers that arrived in Philipsburg where the port facilities can handle the world’s largest cruise ships. The philosophy at the port in Marigot has been pursuing smaller vessels that cater to the “luxury market.

A 10 year performance analysis shows that tourism began rapidly developing in 2000 and hit a peak of 2.1 million visitors in 2005. The figure fell by 12.8 percent up to and including 2009. Things turned around in 2010 because of a resurgent tourism sector on St. Maarten. In that year the French side welcomed 2.2 million visitors, which is higher than the record set in 2005.

The review of the building and public works sector is short because of an absence of statistics to quoute. They do conclude however that the sector is doing well despite “significant competition” from the Dutch side. The report also reveals that 79.9 of the companies in this sector have no employees. In total they were able to find 397 workers who represent 7.4 percent of the salaried employees on St. Martin.

A review of the performance in building and public works shows a net slowdown beginning in 2008 as the global economic crisis set in and because the Collectivity had less “room for maneuver.

“The balance sheet for 2009 and 2010 is mediocre, the number of building permits issued by the collectivity fell 23.6 percent in 2009 and 22.7 percent in 2010 and outstanding housing credits for companies fell 12.7 percent in 2010 after slowing down in 2009. The lack of infrastructure projects and limitations on public investment in the context of long lasting, budgetary austerity make the outlook quite precarious,” the report states.

That same report also shows that unemployment rate in St. Martin is double what exists in St. Maarten. The established unemployment rate for St. Martin in 2008 was 25.5 percent, compared with 12 percent on the Dutch side in 2009. It also shows that the makeup of the labor force is “relatively similar” on both sides of the island. The majority of people on both sides work in the service sector, followed by people in a trade and people in building and public works. One of five of the people who work on the French side are civil servants.

The banks in St. Martin have also reported that they have given out more loans to households than to companies, but they’ve seen the number of bank tellers fall in 2010 after there was some improvement in 2009. There are six credit companies on the French side; four banks affiliated with the French Banking Association and two mutual banks. These establishments have 13 ATMS and employ 69 people.

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