The St. Eustatius economy in 2015 was marked by insufficient growth, reports The Daily Herald. In Saba, on the other hand, the economy showed steady growth last year, the Committee for Financial Supervision CFT reported in its annual report which was presented in The Hague on Wednesday.
“Political tensions and insecurity of the government sector in St. Eustatius didn’t contribute to a forceful economic recovery,” stated the CFT. The level of facilities on the island, especially in education and health care, has increased since Statia became a Dutch public entity in October 2010. However, there is no economic boost so far.
The oil transhipment company NuStar, the island’s largest employer, didn’t grow in 2015 and no large investments were made contrary to previous years. Large investments by Nu- Star were not projected for this year either.
Revenues from NuStar generated until 2015, through harbour fees are uncollectible at the moment because the agreement between the company and the Statia Government lapsed in 2015. A new harbour ordinance should have resulted in higher revenues for government, but NuStar has appealed the drastic increase of levies. No solution has been reached so far.
Through the Dutch Government a number of investments had taken place in 2015, including the establishing of a waste-recycling facility and a solar park, both of which are not operational at the moment, it was stated in the CFT report.
Statia’s new solar farm will supply up to 50 per cent of electricity for the island. But the electricity prices won’t go down instantly when the solar farm becomes operational because the lower operational costs will benefit the local electricity and water company STUCO so it can get out of the “red figures.”
The CFT report mentioned efforts and ambitions of the Statia Government to increase the number of tourists. Sufficient and affordable airlift are a prerequisite, as are the number and quality of the available hotel rooms.
“The infrastructure will have to be brought to a higher level, and investments in the capacity for tourism will be needed. The high cost level and investment climate are a structural focal point.” The high interest rates for loans for (starting) entrepreneurs are an obstruction for large-scale investments. Entrepreneurs complain about increased red tape in the process to obtain working permits.
In Saba, the economy continued to grow while government managed to keep its finances in check. Employment remained at a low and several investment projects were executed. Investments in 2015 included the electricity plant, the airport and harbour. “The good state of the infrastructure facilitates …further developing the island,” it was noted.
Despite the light deflation in 2015, the cost of living remained high, which is a source of concern because it has an adverse effect on further economic development, stated the CFT. The double taxation on goods that are imported via St. Maarten is a contributing factor to the high prices of consumer goods.
The three pillars of Saba’s economy continued to do well in 2015. The Saba Medical University School USOM generates a lot of employment and foreign currency, while tourism is moving in the direction of eco-tourism, a promising niche market. The third source of foreign currency generating sector is fisheries with a solid export.
During the press conference in The Hague on Wednesday, CFT Chairman Age Bakker touched on the level of prosperity of the public entities Bonaire, Statia and Saba. He said that the islands “rightfully so” asked for a “dot on the horizon,” a future perspective. The CFT supported a level of prosperity that was similar to that of the Netherlands, taking into consideration the local circumstances of the islands.