~To sustain growth and build resilience~
Willemstad / Phillipsburg – Following their full recovery from the COVID-19 pandemic, Curaçao and Sint Maarten remain on a positive growth trajectory over the medium term. According to the Centrale Bank van Curaçao en Sint Maarten (CBCS) president Richard Doornbosch in the June 2025 Economic bulletin, growth is driven by major investments, particularly in tourism-related sectors. “To ensure growth is sustainable, additional policy measures are needed, particularly in labor market reform, public finance, and economic resilience”. Both countries must accelerate structural reforms to prepare for ongoing global uncertainties and the increasing risks posed by climate change.
Labor market reforms are needed to unlock growth.
A key area of attention in both Curaçao and Sint Maarten is the labor market. Both countries would benefit from greater investments in human capital, not only in formal education but also via adult training programs and on-the-job learning. “By strengthening human capital, the mismatch between labor market demand and supply can be reduced, allowing more people to benefit from economic growth through greater employment opportunities”, Doornbosch explained. As small economies, Curaçao and Sint Maarten face limitations in developing and retaining specialized skills. This makes the role of foreign labor in certain sectors critical. “The current procedures for attracting foreign workers are often cumbersome and time-consuming, which negatively affects the business climate by fostering illegal employment and growth of the informal sector, undermining the tax base and social security systems”, Doornbosch noted. Reforming work permit procedures, especially in areas where specific skills and expertise are lacking, is therefore crucial. “The recently announced removal of the moratorium of work permits for foreign workers in specific sectors facing urgent labor shortages, specifically the construction and hospitality sector in Curacao, is a step in the right direction”, said Doornbosch.
Fiscal sustainability through responsible refinancing and structural reform
Doornbosch also emphasized the critical role of fiscal sustainability in supporting medium-term growth. In particular, he highlighted the urgency of refinancing the bullet loans that Curaçao and Sint Maarten received from the Dutch State, which are set to mature in October 2025. “Given the current fiscal constraints in both countries, full repayment of these loans is not feasible, making it necessary to negotiate refinancing terms”, Doornbosch stated. However, refinancing conditions must be carefully designed. Simply rolling over debt without a clear and sustainable repayment plan risks increasing the debt burden and placing undue strain on future generations. Moreover, stricter refinancing conditions could raise borrowing costs and limit the government’s capacity to build fiscal buffers needed to absorb future shocks”, he cautioned.
In addition, Doornbosch urged policymakers to address long-term structural challenges that threaten public finances, most notably demographic changes such as an aging population. These dynamics place increasing pressure on healthcare and social insurance systems, which could lead to unsustainable fiscal burdens if left unaddressed. “Comprehensive reforms in these areas will be essential. Given the complexity and sensitivity of such reforms, active engagement from key stakeholders is critical to developing and implementing effective, equitable, and sustainable solutions”, he concluded.
Global headwinds and trade vulnerabilities
Due to their small size and trade openness, Curaçao and Sint Maarten are highly vulnerable to external shocks. Recently, global volatility has increased amid heightened trade and geopolitical tensions. Though not major global players, both countries depend heavily on imports from and are routed through the United States. This also includes goods manufactured elsewhere and distributed via U.S. wholesalers, often through the Port of Miami. Therefore, increased U.S. tariffs and port fees, as recently announced for Chinese-built vessels, would increase import costs for both countries, leading to higher inflation and reduced consumer purchasing power. To mitigate these vulnerabilities, the CBCS’ president recommends diversifying supply chains and trade routes. “By expanding supplier networks to include Latin American countries, CARICOM, and the broader Caribbean region, Curaçao and Sint Maarten can build more resilient supply chains capable of withstanding external shocks,” Doornbosch explained.
Energy and climate resilience
Climate change poses a growing and serious threat to both islands, given their geographic vulnerability to hurricanes, sea-level rise, and flooding. While awareness of climate-related risks has grown in recent years, Doornbosch stressed the need for concrete action. “The next step is to translate that awareness into concrete actions through clear policy measures and an overarching strategy that is not only well-developed on paper but also effectively executed and monitored,” he said. He noted that National Adaptation Plans (NAPs) offer an opportunity to connect existing efforts, set clear priorities, and ensure long-term coordination. Notable initiatives include Curaçao’s Routekaart Klimaatstrategie Kòrsou na kaminda, and KlimaKorsou climate atlas, and in Sint Maarten, the Nature Policy Plan Sint Maarten 2021-2025 and the Coastal Resilience Needs Assessment (CORENA). “These represent important components of future NAPs,” said Doornbosch. “The critical next step is operationalizing them by establishing clear and actionable measures, implementation timelines and monitoring frameworks. In doing so, Curaçao and Sint Maarten can benefit from lessons learned within the broader Caribbean region and draw from partnerships within the Dutch Kingdom”. The complete text of the June 2025 Economic Bulletin is available on the CBCS website at https://www.centralbank.cw/publications/economic-bulletins/2025.
Willemstad, June 25, 2025
CENTRALE BANK VAN CURACAO EN SINT MAARTEN
