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