In conversation with Economist Rendell de Kort

According to de Kort one of the issues behind the handouts and subsidies is productivity. While it is true that people don’t have enough income, and hence the need for aid, we cannot stop there. We also have to create value, and employ people in a new way, that will help them feel good about themselves.

While FASE will contribute to the economy, locals can contribute too, via especially created programs using their labor capacity, for many things, on farms, in environmental projects, if the country pays them to sit around, they have to reciprocate.

Put someone in charge of this – perhaps the ever-complaining former Minister of Justice, now a member of the opposition –  could head that initiative, under the Man Na Obra slogan, and get us all working on neglected community projects?!

Another important aspect of creating value, according to de Kort is the Green Stimulus. Those who are enjoying GOA’s handouts should plant trees, clean beaches, maintain Parke Arikok, work for Directie Milieu, and in general spearhead beautification projects.

Their self-esteem will improve while picking cucumbers in the sun, because they got paid, but they are doing an honest day’s work, at the same time.

I am not sure this will work in Aruba, I said. You must try, he answered, because we should not just TALK about baranca stima, we must demonstrate it. “If we pay you money we borrowed, you can work on projects that help the island recover.”

The Labor Department, the Department of Infrastructure, should oversee, they know what’s needed and can start the ball rolling.

That way we keep FASE for a few months, people get paid for their work, and have an incentive to move out of the program, when they get a job that pays better. Try it for three months, and then evaluate.

AgriTourism, that involves any agriculturally based operation or activity that brings visitors to a farm or ranch, may also be helpful, suppling the hotels with a more resilient product, contributing to GDP, and creating a niche market for visitors.

De Kort sees good potential in agriculture, and Aruba needs to move in that direction and incentivize farmers.

The biggest hurdle, de Kort agrees, is flexibility in the labor market. From the Chamber of Commerce to the IMF, they are all talking about it, about the need for a flexible labor market, it’s not just a social value, it is the secret to success; inflexible labor markets are not good for overall employment and it is basically unfair to lay the burden on the private sector.

The burden consisting of the personnel cost of the public sector, a self-inflicted difficulty.

De Kort doesn’t endorse the wage-subsidy, because he doesn’t think it is a good idea to incentivize businesses to keep people they don’t need on the payroll. In light of the fact that we don’t know what the new normal will look like, and how many tourists we will serve, why burden the private sector with something that hurts them in the long run, they must be able to hire and fire seasonally.

If companies have no income, why worsen their balance sheet, on behalf of the country?

De Kort urges companies to move in the direction of social enterprise, instead of aiming to maximize shareholders’ profits he thinks we should move to operate social enterprises, where ALL stakeholders are properly taken into consideration.

If anything, this crisis caused the realization that we need a holistic approach, with social responsibility as a core value, not as an occasional token of appreciation. Aruba should do business but with specific social objectives that serve as its primary purpose. As a social enterprise we should seek to maximize profits while maximizing benefits to society and the environment.

In his view, we all have a limited capacity in dealing with the pandemic, a crisis of unprecedented magnitude, and that is why a united front behind just one leader is required. He calls for everyone to support the decisions taken, no matter the sins of the past, roll up their sleeves, and truly work for the good of the country, united behind just one leader, keeping all criticism productive and supportive. 

The Central Bank, he reiterates, has a super-difficult task now, providing financial and price stability. Much of the world’s events are not in our hands, and our own dynamic changed, we’re not getting any money in, so the Central Bank’s job at preventing the bleeding of foreign exchange, maintaining things in balance, decreasing what’s flowing out, and exercising control, is more important than ever, and in the name of that control, we shouldn’t allow the FASE money leave the country via Western Union, and MonyGram, because it must stay within our struggling economy.

What we now need are leaders at the top of their game, making the right decisions, innovations, creativity and common sense. 


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May 13, 2020
Rona Coster