~Fiscal policies should be aligned with long-term sustainable economic objectives.~
Willemstad/Philipsburg:--- On January 31, 2025, the Centrale Bank van Curaçao en Sint Maarten (CBCS) hosted its annual economic research symposium titled “Footprints of Government in the Economy: Analyzing the Trade-offs”. As economies around the world face new challenges -ranging from demographic shifts to technological advancements to fiscal pressures- the question of how the public sector can best support societal goals has become increasingly important. Addressing these challenges strategically ensures that governments remain a driving force for progress, fostering an environment where both individuals and businesses can thrive.
Dr. Jardim, Executive Director of the CBCS, opened the symposium by providing the guests with a better understanding of the public finances of Curaçao, Sint Maarten, and Aruba. This cross-country comparison highlighted the main differences and similarities between these countries and their vulnerability to external shocks, which negatively affect their public finances.
The symposium featured two interesting presentations, each offering valuable insights into the intricate relationship between fiscal policies and economic performance. The first presentation, given by Daniella van den Berg, Economist at the Centrale Bank van Aruba (CBA), addressed the future of social security in Aruba. The study reveals looming deficits in Aruba’s public pension and general health insurance schemes if current policies remain unchanged. Van den Berg outlined actionable strategies for the government to ensure the sustainability of these schemes, urging policymakers to take measures to meet the evolving needs of Aruba’s society.
The second presentation, given by Raïna Hieroms, an Economic Analysis and Research Specialist at the CBCS, examined the link between government size and economic growth across ten Caribbean countries. Based on her research, Hieroms concluded that higher government spending tends to hinder economic growth. Her analysis underscores the need for governments to reassess their spending behavior, advocating for a shift toward long-term, growth-oriented, and sustainable expenditure practices. Ms. Hieroms also highlighted the risks associated with fiscal deficits, which can destabilize macroeconomic conditions if not properly managed.
Following each presentation, a panel of experts in public finance and social security discussed the main research findings. The panel included François Michel Simon, Eric Matto, Ivan Kuster, and Alberto Romero. The discussions were moderated by Mrs. Charlene Alberto.
The event brought together a diverse group of experts from both the public and private sectors. Participants were able to exchange insights and explore the complex and multifaceted role of government in shaping economic outcomes.
The CBCS is committed to advancing relevant research and fostering meaningful dialogue on economic issues. This symposium served as a platform for innovative ideas as well as practical solutions. The presentations and discussions underscored the vital role of evidence-based policymaking in addressing today’s economic challenges.
Willemstad, February 3, 2025
CENTRALE BANK VAN CURAÇAO EN SINT MAARTEN
