This afternoon, I am delighted to be here for the signing of financial agreements with USONA.
This signing could not have come at a better time, considering the financial constraints of the island government at this point in time.
Particularly of interest to my office, is of course:
• The Macro-Economic model
• Competition Authority
• Marketing Stimulus program
• Inspection Vosec /CIS
These initiatives are all in keeping with our preparation for country status as well.
For the Macro-economic model some 600.000 guilders is being made available.
Implementation of this model has several benefits:
1. Accurate estimates of the impact social and economic policies have on the small island economy of St. Maarten.
2. The possibility to evaluate existing policies and policy measures in order to increase the effectiveness and efficiency of government interventions in the economic process.
3. The possibility to provide forecasting.
Project objective
The project’s main objective is to develop a macroeconomic model that can be properly used and maintained by the government of St. Maarten; staff will be adequately trained, in order to make:
· Economic forecasts of the most likely development of a small set of key economic indicators (GDP, inflation rate, unemployment, consumption, savings, investments, balance of trade, government revenue).
· Impulse response analyses of proposed social and economic policies and policy measures.
· Policy evaluations of social and economic policies and policy measures.
Project results
The most important results of the project are:
· Reliable, periodical economic forecasts
· Increase in effectiveness of social and economic policies
· Increase in efficiency of social and economic policies
· Decrease of the social costs and negative external social effects of ineffective and inefficient social and economic policies and policy measures.
For the Competition Authority some 250.000 guilders is being made available.
On St. Maarten, we have a relatively small scale economy characterized by a limited number of suppliers in several markets.
Having a limited amount of suppliers of a certain product can negatively impact the price of the product; this would not be in the interest of the consumer.
The perception also exists that any decreases in the quantity and the quality of products sold and services provided ‘can damage the image of the island as a tourist destination’.
So, what this government wants is a transparent and predictable business environment which leads to a ‘level playing field’ with fair competition and possibilities for new entrants to the market.
Project objective
The project’s main objective is to improve the investment climate by removing ‘red tape / government bureaucracy’ and ensuring a transparent and predictable business environment.
The project addresses the entrepreneurial climate as well as the investment climate on St. Maarten.
The simplification of procedures and the coinciding increase in transparency and competition of businesses on St. Maarten is expected to:
(a) Boost the investment climate of St. Maarten,
(b) Enhance consumer protection, and
(c) Improve market efficiency.
Project results
The most important results of the project are insight in the (social) costs and benefits of the development of:
1. the introduction of adequate legislation and
2. Eventually an independent competition authority with the necessary legislative power.
For Inspection Vosec/CIS some 300.000 guilders is being made available.
One of the government main tasks is to enforce rules, regulations and policies.
Two of the departments enforcing rules, regulations and policies are the Control, Inspection and Security (CIS) and VOSEC – both resorting under the sector Economy and Tourism.
The idea is to merge these departments, in the near future.
The new department (inspection department Tourism, Economic Affairs & Transport) will be responsible for all controls and inspections in the following areas:
· tourism,
· economic affairs and
· Transportation.
Project objective
To perform the above mentioned tasks the controllers of CIS and VOSEC need to be well trained; the policies and relevant legislation will either need to be drafted, revised or rewritten.
Project results
The projected results of this project will be to:
· have adequately trained controllers
· provide the controllers with the necessary tools that will enable them to conduct routine controls in the sectors relevant to the future ministry of economic development, transportation and tourism.
· enable the controllers to effectively enforce the relevant policies and regulations of the ministry in question.
For the Marketing Stimulus program, phase 2 the amount of over 1 million guilders is being made available (NAF 1.000.300)
This financial agreement is an addendum on the first financial agreement that was signed on September 1, 2009. The first financial agreement focused on the marketing activities in the US-market. This addendum will focus on the marketing activities in the Canadian and Dutch/Belgium market.
Funds now become available for the development of an advanced interactive media product for the marketing and promotion of St. Maarten. These include the creation of a smart-phone website.
This last project is one of great importance, considering our dependency on tourism, as our main economic pillar.
As you know, St. Maarten in consultation with the Dutch Government, created the Marketing Stimulus Program to stimulate our economy.
I thank you.