Page 22 - AWM 5 MAART,2016
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22 AWEMainta Diasabra, 05 Maart 2016
By: Arjen Alberts
Aruba and Sint Maarten: Two examples of
tourism causing economic growth, but not
increasing productivity
THE CORE question of this well-being. Conversely however, private investors, tax holidays started looking for overseas
under conditions of stagnant or and other fiscal incentives’. Under relocation possibilities in the same
article is whether the economic declining real per capita GDP, it is these conditions, the tourism manner. Aruba and Sint Maarten
growth dimension of the Aruba/ theoretically possible, but highly sector developed rapidly during tapped into this trend, and both
Sint Maarten model has actually unlikely that general well-being the late 1980s and 1990’s, settling became concentrated pockets of
lead to increased productivity, would have increased. into a more moderate growth rate high intensity tourism facilities,
and could hence be qualified as around the turn of the century. Of guided by know-how mainly
intensive growth providing a Aruba and Sint Maarten caught the two countries Sint Maarten embedded in the franchises of
rising level of per capita wealth. the tourism development wave of relies more heavily on day visitors foreign hotel chains. Aruba and
Based on the premise that both the 1960s brought in by cruise ships. Sint Maarten from the onset
economies are almost exclusively developed their tourism industry
dependent on the tourism industry Aruba as a tourism destination The start of tourism-driven relying on immigrant labour
as the engine of growth, selected developed gradually and modestly economic development on from nearby islands and from the
tourism volume indicators are set during the 1960s and 1970s, while Sint Maarten took place earlier South American mainland. The
off against the development of real the oil industry still constituted and initially somewhat more engagement of foreign labour was
GDP. A rising productivity level the main economic pillar. When gradually than on Aruba. Sint initially seen as rotating, seasonal,
would be indicated by a real GDP the introduction of cheap jet Maarten’s economy during the or both. However, in effect
growth index that exceeds the transportation opened the oil industry boom of Curaçao and both islands created their own
increase in tourism service volume Caribbean for mass tourism from Aruba between 1930 and 1970 permanent sub-regional division
indicators such as numbers of the US, tourism was recognized had been the mirror image of of labour, to the extent that this
cruise ship visitors or visitor nights as an alternative source of the larger Dutch islands’; many labour supply mechanism became
spent. economic activity in Aruba. The Sintmaarteners migrated to an integral and indispensable
attainment on 1 January 1986 of Curaçao and especially Aruba to attribute of their development
Furthermore, real per capita GDP constitutional separation by Aruba find employment. They typically strategy.
of both countries is used as a from the Netherlands Antilles, transferred part of their earnings
proxy for labour productivity. The known locally as ‘status aparte’, to their relatives back home, giving Aruba and Sint Maarten are not
development of real per capita came on the heels of the final rise to the branding of their home the only Small Island Tourism
GDP over time is measured for closure of the Lago refinery. The island as a ‘postwisseleconomie’ Economies
Aruba as well as Sint Maarten demise of the oil industry made (money order economy). Total
to provide an answer to the the GDP collapse, losing over a population reached a low point Aruba and Sint Maarten, as
question in what direction labour quarter of production. However, of around 1,500 persons in 1951. Small Island Developing States
productivity has developed. At the a sharp tourism-driven reversal (SIDS), are not alone in their
same time, real per capita GDP can caused the GDP to overtake the The stability offered by the development of strategies that
be used as an indicator for average previous high as early as 1988 Netherlands Antilles and later cope with their ‘islandness’, and
income and provides an indicative with Afl. 1,130 million, continuing on Aruba separately, as part of that search out opportunities
answer to the question whether double-digit real growth in the the Dutch Kingdom, attracted available in a globalizing world. In
average wealth has increased next two years foreign investments in hotels the era of globalization, a number
over the period under review. The and other services. Foreign direct of distinct island development
limitations of GDP as a measure Through a crash programme of investment, initially subsidized models have been recognized in
of development or even economic hotel construction, actively and by tax holidays and financial literature. Small island models
growth, as pointed out in the 2009 purposefully aided by government government guarantees, created focus on the specific and unique
report by the ‘Sarkozy commission’ stimuli as Vanegas and Croes hotels built or operated by US hotel circumstances of small island
are acknowledged here. It is put it, in addition to improving chains, themselves increasingly economies as determinants of
important to recognise that growth infrastructure ‘the government globalizing, to the specifications their development possibilities.
of real per capita GDP is probably provided direct support through expected by the American tourist. Therefore the MIRAB, PROFIT and
a necessary, but certainly not a hotel loan guarantees to assist In that era, the hospitality industry SITE models described below do
sufficient condition for increase in
