”We know what we do not want- are we brave, patient and open to transform our economy?”
Speaker and Economist Rendell de Kort highlighted that the COVID-19 crisis has positioned Aruba’s economy in a very critical and vulnerable situation. Tourism, has been shut down leading to a loss of nearly 90% of Aruba’s main source of income. Impacting income and employment in the private sector, income in the financial sector, and income in the public sector.
Who could help us overcome this crisis? This is a difficult question – the government of Aruba does not have a financial buffer to cover this loss nor will receive international financial funding considering that the COVID19 crisis is a global movement limiting international support. Therefore, the island is dependent upon the financial support from the Netherlands, in order to be able to keep the economy afloat. This means, currently Aruba’s economy has hit rock bottom.
How to move forward?
According to Rendell, to move forward it requires Aruba to change its economic mindset and ways of doing business completely. For the last decades, Aruba’s economy has been driven by an unsustainable tourism growth model focused on short-term rather than long term gains. Moreover, a model focused on high overspending and cost in the public sector. For years Aruba has traded economic gains at the cost of its natural resources, culture, and labor force (its people) – the main elements that have made the Aruba product a tourism success. However, to change this we need to be open to new economic models. Models that focus on the slow long-term sustainable growth, on safeguarding the natural resources, and on the wellbeing of the locals. However, adopting these models requires a complete transformation of the entire local community and economy.
Such transformation calls for a willingness to be open to new models, the patience to cultivate them and the courage to make difficult decisions focused on long- term rather than short-term gains.
Courage
As a nation we are aware of the economy we do not want, however, are we brave enough to make the necessary changes? – The time is now. It is time to change the winds and direction of our economy for the current and future generation.
How do we restart our economy?
- The local mindset is crucial in our quest to diversify the economy – we need to have a plan to stimulate this among the local population and to challenge them to do so.
- On the other hand, the public sector (government) needs to facilitate the business process in Aruba and needs to become a service-oriented sector- one that seeks to support its citizens when opening a business, when paying taxes and when citizens come in contact with the government in general. The public sector should be open to changing their position towards a more service-oriented sector.
- The main challenge in economic reform is that Aruba needs a long term focused economic strategic vision and plan. Since the 90s Aruba is focused on short term gains (hotel) to build a new pillar we need to shift the focus towards long term gains.
- It is understandable and applauded that the government engaged in FASE as a strategy to keep the economy afloat. However, in order to achieve long term economic reform we need to add special requirements to such giveaways. These requirements can be tied to the economic plan, such as stimulate the public to engage in gardening or planting and maintenance of public areas in exchange for financial support.
- There are three main possible economic models suitable for Aruba: Circular Economy, Economics of Mutuality and Doughnut Economy. All three models are human centered, long-term focused and environmentally friendly and sustainable. It is time for the island of Aruba to choose one model and develop an economic vision and plan for this model.
