CBCS publishes research on Sint Maarten’s FDI inflows
WILLEMSTAD, PHILIPSBURG - Sint Maarten has attracted less foreign direct investment (FDI) since 2011 than other tourism-intensive Caribbean countries, according to new study by the Centrale Bank van Curaçao en Sint Maarten (CBCS). Despite having high trade openness and being part of the Kingdom of the Netherlands, Sint Maarten’s average FDI inflows relative to its GDP have been consistently below its regional peers. The study suggests that the answer to this puzzle may lie in Sint Maarten’s mature position along the tourism life cycle stage, which now limits its ability to attract new large-scale tourism investments. Based on these findings, new policy directions may be needed for Sint Maarten, according to its author Jason Lista, Economic Analysis & Research Specialist at the CBCS.
Because FDI plays a critical role in Small Island Developing States (SIDS) by generating foreign exchange earnings, creating jobs, and transferring new technology and skills, it is essential to get the policy mix right to attract and retain capital investment in Sint Maarten for the long term. The paper bridges the gap between conventional FDI studies on the one hand and tourism lifecycle dynamics on the other by building on the influential Tourism Area Life Cycle (TALC) model in the context of SIDS like Sint Maarten. It is the first time a study has empirically validated Sint Maarten’s tourism statistics according to the TALC.
The study reframes the discussion of comparatively low FDI, not simply as a failure of policy or competitiveness, but as a structural characteristic of tourism maturity in specific small island contexts. Recognizing this evolution offers both a diagnostic insight and a foundation for more targeted, context-sensitive strategies for investment and development in the decades to come.
From a policy perspective, the findings indicate that future FDI attraction strategies must account for this maturity and saturation. Policymakers may need to pivot toward reorienting tourism to a more upmarket trajectory and, where possible, promoting diversification into complementary sectors that enhance tourism. Potential areas for diversification could include infrastructure renewal projects, as well as marine and agrotourism. Additionally, strengthening statistical capacity and extending time series data on FDI inflows and fine-tuning tourism statistics to better account for Saint Martin, the French side of the island, will also be essential to refine future empirical work and help inform evidence-based decision-making.
