Cft: The Venezuelan impact on Curaçao’s economy

WILLEMSTAD - In 2018, the Venezuelan crisis left a mark on Curaçao's economy. In the annual report of the Financial Supervision Board (Cft) of 2018, the committee outlines the various ways in which the crisis in the neighboring South American country has had an impact on neighboring countries, including Curaçao.

Curaçao was first confronted with the closure of the border between Venezuela and Curaçao, recalls the Cft. “Because of this, Venezuelan tourism declined further and the fruit boats could not supply fresh fruit and vegetables from Venezuela. Activity in the free zone also declined further due to the closure of the borders with Venezuela. The borders opened again in April.”

The Venezuelan crisis has also affected the oil sector of the Caribbean countries. “On Bonaire there was almost no activity in 2018 at the Bopec oil terminal, operated by the Venezuelan company PdVSA. At the refineries in Aruba and Curaçao, both directly or indirectly operated by the PdVSA, seizures and sanctions imposed by America have led to the postponement of investments and the cessation of operational activities, "according to the committee. Since May 2018, the production of the Isla refinery has practically stopped.

“The economic impact of this was asserted in 2018 through the forced further reduction of maintenance on the installations of the refinery and the decline in tanker traffic.”

The economic development in 2019 will partly depend on what happens to the refinery, according to the Cft. “The Central Bank expects an economic growth for 2019 of 0.4 percent. Economic development has long been determined by the rise of tourism on the one hand and the declining economic importance of the oil refinery and international financial services on the other. After 2000, labor productivity fell by more than 10 percent.”

In addition to the uncertainty associated with the trade relationship with Venezuela, there were also concerns in some other sectors in 2018. In tourism, a number of hotels ran into problems and had to close their doors or look for a new owner.

The international reputation of the financial sector was compromised when the Giro Bank was placed under guardianship and the problems at insurance company Ennia. The development of public finances also contributed to the increasing uncertainty, according to the Cft. “The persistent shortages and the absence of effective measures contributed to this.”

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