A technology driven Strategic Trade Development Roadmap for Curaçao!
Last April, the Council of Ministers of Curaçao approved a Strategic Trade Development Roadmap as part of a National Export Strategy. Curaçao engaged with an International Organization, The International Trade Center, a UN technical Agency, to facilitate and give technical assistance in realizing an export strategy for Curaçao.
International trade has always been at the heart of Curaçao’s economy. The country’s languages, identity and cultural heritage have all been heavy influenced by its linkages to the global economy. Moreover, the success of the country’s export sectors enabled Curaçao to develop into one of the more prosperous nations in the Caribbean.
Nevertheless, Curaçao’s economy is at a crossroads. Two of its three economic pillars – oil refining and financial services – have declined rapidly over the past two decades. Consequently, economic performance has stagnated, and per capita incomes are falling. Up-and-coming sectors such as professional services and tourism, meanwhile, have struggled to compensate. Now the third most important sector, Tourism has come to a halt due to the Covid-19 pandamic. Furthermore, Curaçao is running a large current account deficit. This deficit is driven by a large trade in goods deficit and is only partially offset by the positive trade in services balance. In order to pay for its imports and maintain its standard of living, Curaçao must grow both existing and new sectors of the economy to generate foreign exchange earnings.
Despite these challenges, Curaçao is not starting from scratch. It has a developed education system and hosts many skilled professionals. Before Corona, we used to have strong air and sea connections to the region and beyond. It is an attractive location for foreign investment, and benefits from a strong and stable regulatory framework. It also has an autonomous government, capable of charting a new and ambitious path for the island.
Most importantly, Curaçao has potential. The Strategic Trade and Development Roadmap (STDR) provides a blueprint to leverage this inherent potential into sustainable economic growth. The STDR lays down the overarching rationale and strategic framework for the National Export Strategy (NES).
The roadmap prioritizes those sectors that have the highest potential to generate decent jobs and foreign exchange earnings. It also identifies key trade support functions that need strengthening if exports are to grow.
Exports are at the heart of Curaçao’s economic well-being. As such, Curaçao’s future is tied to the success of its export industries. A strong all-of-country commitment to supporting the NES and implementing its recommendations will help Curaçao become a country where business succeeds.
As such, Curacao’s future development strategy has to be predicated on proactive, sensible, and practical measures that seek to respond to these global challenges while simultaneously exploiting the opportunities they present. So, we need to go from vulnerabilities to opportunities. Curaçao’s priority sectors are mostly services based.
They leverage high-quality human capital and take advantage of digital technologies to serve customers, whether these customers are in Curaçao or abroad. Businesses in these sectors are better able to adapt to changing working and international market conditions, such as demand shifts or stay-at-home measures. The NES also places a strong emphasis on strengthening business support institutions (BSOs). In times of economic crisis, businesses turn to BSOs to help them adapt and survive. Better communication, alignment and coordination of activities among Curaçao’s BSOs would improve resilience. The NES is a critical development project for Curaçao. The challenges the country faces as a result of the coronavirus outbreak are, for the most part, a magnification of existing weaknesses. As such, the NES is well-placed to tackle these weaknesses head on and outline a path for a diversified and resilient Curaçao.
How will the impact of COVID-19 affect Curaçao’s National Export Strategy (NES)?
The Strategic Trade Development Roadmap (STDR) is an assessment of the challenges and opportunities facing the country, and presents a vision for the future of the country. It identifies a lack of economic diversification and resilience as two central weaknesses – the same weaknesses that are reducing Curaçao’s ability to respond to the crisis today. Therefore, the STDR is a comprehensive vision to improve diversification and to build resilience. How does the STDR propose to do this?
At the heart of Curaçao’s NES is technology. Technology, in particular digital tools, should strengthen and link all of Curaçao’s economic activities. To diversify the country, the NES identifies six priority sectors that have high growth and foreign exchange earnings potential. These sectors are reinforced by four trade support functions, which will benefit all firms and exporters within the economy.
Crucially, the entire framework is underpinned by the concept of “e-government for business”. In practice, this means transitioning government services to online platforms as far as is practicable. To diversify the country, the National Export Strategy identifies six priority sectors that have the potential for high growth, adding value to exports and foreign exchange earnings.