The economy: less cheers, more action

The longest meetings I’ve experienced in my professional life are those between the economic unit and staff of the United Nations office in Chad.  Everyone had an opinion, even those who’ve never had a single economics class. Curiously, meetings about how to contain the expansion of the Sahara desert never took long as discussions on this matter were left to the experts. But, I digress. I want to discuss the economic malaise of Curaçao.

I’ve recently heard that we’ve to be optimistic for the economy to grow. Optimism is key, but it’s a result of current or future expectations which, in turn, depend on good pro-grow policies. Optimism is not a policy.

We’ve heard that people have to spend more (plaka tin ku lora in Papiamentu). Again, correct. But nobody will spend more money, and the private sector will remain reluctant to take risk and invest if people do not expect things to change. Real change comes with a good policy mix by the Government, not with ad hoc ideas that sometimes fly a bit too close to the sun.

Others say we need to export more. True. Our balance of payments has been screaming for a solution for years now. Yet we have no trade policy, we don’t comply with the World Trade Organization (WTO) and don’t have a single trade agreement. Yet, we don’t even talk about this.

Finally, popular with politicians: we need to attract fresh foreign investments and do something about the projects that are, sometimes for decades, in the pipeline. A big yes. Yet we seem not to realize that the reason it’s difficult to attract investments is because we lack the policies and infrastructure that make us attractive for investments. Secondly, so many projects are in the pipeline because of our stiffing regulatory environment and inflexible, antiquated policies. Talking about investments won’t cut the mustard. Good policies will.

With all due respect to the people who have been talking about resolving the economy with pep rallies: it’s about policies, stupid. We need to streamline and automate procedures, eliminate unnecessary red tape, make the labour and capital markets more flexible, get our act together with the WTO, design a trade policy, negotiate trade treaties and have a demographic policy to counter our shrinking and aging population. 

It’s not easy, but we need less cheering and more action to make it happen.

Ulaanbaatar, Mongolia

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