The export economy after COVID-19

The spread of the coronavirus is developing into one of the greatest health and economic crises of the last hundred years. The corona measures taken by governments around the world, including Curacao, are critical to protect public health and human life, but these measures also put enormous strain on domestic and international trade.

For the development of small island countries, such as Curaçao, the strain is even greater. Highly dependent on tourism for foreign exchange income, and heavily dependent on imports to purchase products such as food and medical supplies and other goods, Curaçao faces its greatest economic challenge in living memory.

The challenge has been formulated by the government of Curaçao in a National Export Strategy, called NES. The core of Curaçao’s NES is technology. Technology, especially digital instruments, must be stronger and connect all economic activities of Curaçao. To diversify the country, the NES identifies six priority sectors with high growth and foreign exchange earnings potential: the first sector is – of course – the tourist sector, followed by creative industries, educational services, financial services, Information and communication technology and harbouring.

Crucially, the whole framework is supported by the concept of ‘e-government for businesses’. In practice, this means that government services must be transferred to online platforms as much as possible. Curaçao’s priority sectors are based on services. They make use of high-quality human capital and take advantage of digital technologies to serve customers, whether these customers are in Curaçao or abroad. Companies in these sectors are better able to adapt to changing working methods and the international market, such as shifts in demand or measures to stay at home.

The NES also places a strong emphasis on business support organizations (BSOs). In times of economic crisis, companies turn to BSOs to help them cope and survive. Better communication, coordination and alignment of activities between them would increase resilience. The NES is a critical development project for Curaçao. The challenges that the country is dealing with from the coronavirus outbreak are, for the most part, a magnification of existing weaknesses. As mentioned, the NES indicates six sectors. The analysis of the strategy shows that Curaçao’s exports have strong competitive advantages in the services sector. Globally, it is growing faster than trade in goods, and Curaçao has the cultural diversity to serve three major growth markets: Europe, North America and Latin America. But sector selection must also be in line with policy objectives. These lie in the potential to create jobs, especially for young people. To generate foreign currency and to add value to products and services. An advantage for each sector is the potential to switch with other sectors and to focus on environmental sustainability.

General feeling in Curaçao is that the costs of doing business are high and that the convenience of doing business is low. In addition, entrepreneurs complain about the lack of responsiveness of government institutions and ministries and about the lack of an adequate range of services. For Curaçao to be successful in developing its exports, it depends entirely on the ability of the government, institutes and companies to implement the strategy’s action plans. Thus, without a strong and credible commitment to top government implementation, the design of the strategy is largely a futile effort. The NES is not the strategy of a single institute of ministry, but rather the overarching strategy of the country’s overall institutional framework. Implementation often fails because a wide variety of institutions are required to coordinate and collaborate, and in Curaçao many institutions do not work together.

The lack of coordination of the Curaçao institutions has led to the design of many strategies, each pursuing its own goals and objectives. The sheer number of strategies and lack of leadership have made it difficult for government and institutions to set priorities and for ministers to make wise decisions about resource allocation. The NES presents one unifying export development vision for Curaçao, and elaborates this vision through its strategic and operational objectives. As mentioned earlier, Curaçao has a poor track record of implementation strategies and as such there is a real riskthat little to no implementation will take place. That is why it is essential that Curaçao approaches implementation in a different way. To realize the vision and goals of the NES, Curaçao must build a robust implementation management framework.

 The proposal is to establish a Curaçao Export Council (CEC). An independent council charged with supporting the implementation of the NES. It provides the leadership and coordination necessary to execute the strategy. The Curaçao Export Council acts as an advisor to the cabinet of ministers on matters related to trade and competitiveness.