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Sint Maarten: Overview

  • Following the devastation caused by hurricanes Irma and Maria in September 2017, Sint Maarten suffered damages and losses of up to US$1.38 billion, or around 260% of its gross domestic product, impacting houses, public buildings, the airport, hotels, and firms engaged in the tourism sector. Sint Maarten is still rebuilding and recovering from the devastation.  

    Sint Maarten’s economy contracted by a cumulative 12% during 2017-18 in the aftermath of hurricane Irma. Private external finance from direct investment, loans, the pay-out of insurance claims, and funds held abroad are needed to finance the reconstruction of private properties and businesses. Access to finance and business recovery is needed to help the private sector grow and contribute to the economic recovery. Micro, small, and medium enterprises (MSMEs) have endured significant capital losses due to the impacts of the hurricane.

    Public finances faced a sharp decline in tax revenue due to the economic contraction. At the same time, government spending will increase to rebuild public infrastructure and assist the affected population. Liquidity support to help cover part of the current budget deficits was provided for 2018 and will be provided for 2019 and 2020 by the Netherlands through an arrangement that allows Sint Maarten to borrow at the Dutch sovereign bond rate.

    Sint Maarten’s economy is based on tourism. Restaurants, hotels, and other tourism-related sectors account for about 45% of GDP in Sint Maarten, with a population surpassing 40,000 and a per-capita GDP of a little over $25,000. Tourism accounted for 73% of foreign exchange income in 2016, helped by large arrival numbers. The country receives an average of 1.7 million cruise passengers each year, and the airport is a hub for connecting flights across the Caribbean. The tourism sector suffered from major damages to the airport, accommodations, and tour operator equipment, which dramatically reduced tourist arrivals.

    Rapid economic recovery and reconstruction are critically needed to generate income and stem the loss of jobs. Sint Maarten’s overall unemployment rate increased from 6.2% in 2017 to 9.9% in 2018, with youth unemployment at 17.9% in 2018. Households need access to finance to rebuild homes and make a full return to economic activities.

    A United Nations Development Program (UNDP) benchmark for poverty has been prepared and recovery actions will include female-headed households — 38.7% of all households — who depend on the income of women in this post-hurricane period. 

    Last Updated: Mar 24, 2020

  • The Sint Maarten Recovery, Reconstruction and Resilience Trust Fund

    To support a strong and sustainable recovery, the Sint Maarten Recovery, Reconstruction and Resilience Trust Fund (SXM TF), administered by the World Bank and financed by the Netherlands, was created for up to 470 million euros (US$553.4 million) in April 2018. The fund supports the goals of Sint Maarten’s National Recovery and Resilience Plan (NRRP) to restore economic, community, and governance infrastructure and service delivery. The fund aims to help Sint Maarten “build back better” after Hurricane Irma and increase its resilience to future natural disasters.

    Decisions on financing projects are guided by the NRRP. The top priorities of the NRRP, which was endorsed by the Sint Maarten Parliament in August 2018, are to meet people's basic needs, from education to food, shelter, and mental and physical health. The plan also takes a medium- and longer-term approach to revitalize the economy and promotes the build back better principle.

    Building back better means the repaired or replaced assets are more resilient than before and are inclusive so that nobody is left behind in the process. According to a World Bank study, if small island states build back using these principles, they will see an average 59% reduction in disaster-related well-being losses.

    The government of Sint Maarten established the National Recovery Program Bureau (NRPB) to manage the recovery and reconstruction efforts financed by the trust fund.

    RESULTS The SXM TF has received US$305 million in two tranches from the Netherlands to date. The first tranche of US$134M has been fully committed and was made available to the Government of Sint Maarten for four projects focused on emergency income and training support, emergency reconstruction (emergency services, housing, shelters, and utilities), hospital reconstruction and resilience, and debris and waste management.  

    A second tranche of US$171 million is earmarked for 10 projects. Of these 10 projects, 3 have been approved by the World Bank and include the projects for airport reconstruction, MSME financial support, and roof repairs. The seven projects s still under preparation will focus on solid waste management, improvement of road connectivity, digital government, support to civil society through small grants, budget support to improve public sector efficiency, and strengthening schools and providing psychosocial assistance to children.

    The first stages of project implementation have produced important results.

    o   1,792 jobless people, including about 85% of employees of the two biggest hotels, have received a stipend and training, with certification, as well as medical insurance. Out of the total people trained, 1,206 are women. The training serves as a lifeline for those whose employers cannot pay salaries at this time. 

    o   Repairs to key emergency service locations, such as police stations, have been completed, so that emergency workers can provide services in a safe environment during hurricane season. 

    o   148 homes out of the 350 targeted have been extensively repaired. These include social as well as private homes. A special roof repair project to be executed by the Red Cross has been approved for US$3.6 million, to focus on homes that need only roof repairs. This project also equips local tradesmen with knowledge and skills for hurricane-resistant construction.

    o   The Sint Maarten Medical Center is fully functional after critical repairs. Key services including dialysis have been expanded, and the repaired and upgraded roof can withstand Category 4 hurricane winds (compared with Category 2 previously).   Upgraded designs for the new hospital building, designed to withstand Category 5+ winds, are finalized, and works are expected to start this calendar year. A new hospital is being built with co-financing from the private sector.

    o   Sint Maarten is now insured against tropical cyclones, earthquakes, and excess rainfall under the Caribbean Catastrophe Risk Insurance Facility (CCRIF). 

    ·       Analytical work was completed on airport corporate governance, the quality of air at the Pond Island Municipal Waste Disposal Site, and the housing sector. Other studies launched include strengthening of the tourism sector, a public expenditure review, a country environmental analysis, and solid waste management solutions.

    ·       A  Strategic Framework for the Trust Fund lays out the planned cooperation between the World Bank and Sint Maarten for the period 2019 to 2025.

    Last Updated: Mar 24, 2020

  • The Trust Fund is governed by a steering committee composed of one representative from each of the three parties: the Sint Maarten and Netherlands governments, and the World Bank. The steering committee decides by consensus on the allocation of funds to short-, medium-, and long-term recovery projects, capacity building activities, and analytical work. The steering committee meets twice a year and on an ad-hoc basis to approve projects and monitor the progress of the activities financed by the fund. 

    The steering committee is supported in its work by a technical working group (TWG). The TWG prepares the biannual steering committee meetings and carries out the tasks the steering committee delegates it to meet the Trust Fund’s objectives.

    Steering committee members

     

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    Sint Maarten - The Honorable Marcel Gumbs, Former Prime Minister 

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    The Netherlands – Frans Weekers, Executive Director European Bank for Reconstruction and Development

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    The World Bank - Ms. Tahseen Sayed, Country Director for the Caribbean

     

    Technical Working Group Principals

     

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    Sint Maarten - Dr. Abel Knottnerus, Deputy Director of the National Recovery Program Bureau

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    The Netherlands - Saskia de Reuver, Sint Maarten Reconstruction Program Manager for the Dutch Ministry of the Interior and Kingdom Relations

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    The World Bank - Ms. Michelle Keane, Program Manager, Caribbean Country Management Unit 

     

    Last Updated: Mar 25, 2020



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