Countries should address vulnerabilities on balance of payments



CBCS hosted a symposium with key economic stakeholders

Willemstad/Philipsburg – On January 19, 2024, the Centrale Bank van Curaçao en Sint Maarten  (CBCS) hosted the symposium “Fostering the Right Balance”, that focused on the  vulnerabilities of the balance of payments of small economies. In his opening remarks,  Executive Director of the CBCS, dr. José Jardim, highlighted some common characteristics  that Aruba, Curaçao and Sint Maarten share with regards to the balance of payments:

“All three  countries are relatively small, have a high degree of trade openness, have relatively high  tourism export ratios, and are very dependent on merchandise imports. The countries also  face a structural deficit on their trade balance”. “The balance of payments provides important  insights into a country’s international position and reflects the stance of the domestic  economy as well. Not only does it tell us how an external imbalance is financed but also the  roots of that imbalance: either private investments exceed domestic private savings or fiscal  policy is expansionary. So, if a country runs external imbalances, its domestic components are  not in balance either, dr. Jardim added.

Against this background, the balance of payments of these countries is very vulnerable to  external shocks. Therefore, the countries need to address vulnerabilities on the balance of  payments to maintain external stability. The balance of payments is crucial for monetary policy.  Hence, the CBCS hosted the symposium with the aim to provide more insights and to exchange  views on the complexities and vulnerabilities of the balance of payments of particularly the  monetary union of Curaçao and Sint Maarten. 

The symposium consisted of two presentations on research being conducted by CBCS’ staff.  Based on the preliminary findings of their research on the real contribution of tourism to the  balance of payments of Curaçao and Sint Maarten, dr. Shekinah Dare and Mr. Christopher Rigaud  indicated that every dollar earned from international tourism in Sint Maarten induces almost 62  dollar cents in additional imports, substantially lowering the net contribution of international  tourism to the island. The empirical results fail to find the same evidence for Curaçao.

While there is proof of a relationship between the two, international tourism does not seem to be  inducing additional merchandise imports. This might be related to the higher diversification of  the economy of Curaçao and the type of tourists visiting the islands. Contrary to Sint Maarten,  Curaçao’s tourism is not shopping but experience focused. Dr. Dare and Mr. Rigaud recommend  that the countries apply a balanced approach focusing on further developing other (high  potential) sectors alongside international tourism, such as the renewable energy sector in  Curaçao and the logistics industry in Sint Maarten.


Meanwhile, the presentation of Ms. Candice Henriquez and Mr. Robert Hieroms focused on the  exposure of the balance of payments to external shocks, particularly oil price shocks and euro  price fluctuations. According to the preliminary findings from their research, an oil price shock  can have a persistent negative effect on the balance of payments of oil-importing economies  such as Curaçao and Sint Maarten.

It seems to take more than two years to get back to the pre shock level. Hence, the countries should step up their policy efforts to make the economies of  Curaçao and Sint Maarten less dependent on fossil fuels which includes the transition to  alternative energy sources. Euro price fluctuations also affect the balance of payments of the  monetary union, although Curaçao is more vulnerable to these fluctuations than Sint Maarten.  Curaçao’s tourism sector has a relatively high exposure to changes in the value of the euro vis à-vis the guilder. Therefore, diversification of the economies towards other non-euro  economies would make the balance of payments, particularly in Curaçao, less vulnerable to euro  price fluctuations.  

The symposium included an expert panel discussion chaired by Mr. Alberto Romero. Members  of the panel included Ms. Zulaika Mook from the Ministry of Economic Development of Curaçao,  Mr. Hugo Clarinda from the Curaçao Tourist Board, Mr. Eugene Holiday, former Governor of Sint  Maarten, Mr. Koert van Buiren from Economisch Bureau Amsterdam, dr. Yamil Lasten, CEO of  the Curoil Group, and dr. Stella van Rijn from the Ministry of General Affairs of Curaçao.  

All the presentations are available on the CBCS website at