DEVELOPMENT BULLETIN-CURACAO: Government Gets the Thumbs Down

By IPS Correspondents Reprint | | Print |

Marvin Hokstam

WILLEMSTAD, May 30 1998 (IPS) - Living in Curacao for the past four years, all Calvin Vince seems to think about these days is getting his citizenship here and then leaving for Holland.

When he came to Curacao from a neighbouring Caribbean country he had hoped the island would offer him what he came for — economic security. Now he finds that he was wrong.

“Curacao is going through a hard time and right now it isn’t the place to be,” says this man who calls himself Vince, not wanting to use his real name fearing that his chances of citizenship could be jeopardised if he did.

But Vince is not alone in his assessment of the economic conditions now prevailing in this Dutch colony. The migration figures speak for temselves. The number of citizens of Curacao leaving the country of their birth and heading to Holland is on the increase, and many are moving away to escape the economic conditions, they say.

Reports indicate that in 1995, 5,000 persons left the country in search of a better life. Last year that figure jumped to 50,000.

The population of Curacao is 140,000.

All sectors seem to be in trouble. Tourism, one of the main foreign exchange earners is on the decline. In 1997 the figure for tourist arrivals fell by almost five percent.

Private companies are reporting that making a profit is something of the past and the government is struggling to repay a debt of 33 billion Dutch guilders owed to Holland.

Curacao depends for its prosperity almost entirely on services and international commerce reinforced by Dutch aid.

It is one of the five islands in the Southern Caribbean, that form the Netherlands Antilles. The island was captured by the Dutch in 1634.

Although it is part of the Kingdom of the Netherlands, Curacao has a parliamentary democracy and is fully responsible for its domestic affairs.

All five islands, however, Bonaire, Curacao, St. Maarten, St. Eustatius and Saba are suffering from high unemployment levels of more than 25 percent.

But the economic situation now prevailing in Curacao was not always the case.

The island established ‘tax haven’ facilities in the 1960s which proved attractive to Dutch and US companies. For these companies registered in Curacao, not only was the interest on their overseas investments tax-free, but they also benefitted from a tax treaty, signed in 1963 between the United States and the Netherlands Antilles which waived the US withholding tax.

This meant that money deposited in Curacao tax-free, could be withdrawn and then spent without tax being paid in the recipient country.

By the late 1980s this all changed with the repealing of the treaty, and Curacao’s reputation as a ‘tax haven’ was no more. This had serious implications for the economy.

And now many people are blaming the government for the state of affairs now prevailing in the country. Margit deFreitas, public relations officer for the Associationof ndustrialists in the Antilles (ASINA) says the current situation stems from inefficiency and mismanaement on the part of the government.

“They did not manage their business well, the income is less than their otput. In the end it resulted in the financial crisis we’re in now,” she says.

“Like the IMF (International Monetary Fund) suggests in its 1997 Report with Proposals for Action, the government should, among other things reform its civil workforce,” says deFreitas.

There are 10,000 public sector workers in Curacao and the payroll for these employees now stand at 700 million Dutch Guilders. “That’s about 70 percent of the island’s budget,” says Johan Lieuw, director of Curacao’s Trade and Industry Association.

“The political situation of the island is not weak, but through wrong decision-making we have found ourselves in the mess we’re in,” says deFreitas.

Still some argue that all the island has going for it now is the fact that it is still a colony of Holland and can therefore count on Dutch aid and in order to continue to survive it needs to hold on to this status.

Some observers accuse the government of deceiving the people into thinking that it wants independence, but this is far from the truth.

“When they want to make a speech, politicians use the word autonomy easily, but to the locals its nothing more than a fancy word,” says Lieuw.

In a recent survey in which 2,500 persons participated, 90 percent of those questioned said they believe that the economic situaton now prevailing in the country is caused by mismanagement on the part of the government.

“l reports point out that the government is the villain,” says Lieuw.