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Economic Diversification and Resilience.

In addition to the severe effects of Irma, we now also need to worry about a second and potentially third wave of the CoVid-19 outbreak once the (quarantine) restrictions are further loosened. Quarantines and travel bans have helped slow down the outbreak but driving the new coronavirus out of existence is now looking increasingly unlikely. History doesn’t have to repeat itself and we may become immune to CoVid-19 but there are also chances for successive waves like the 1918 Influenza pandemic: the Mother of All Pandemics. If so, 3 extensive pandemic waves of CoVid-19 or a mutation of CoVid-19 occurring in rapid succession, with only brief intervals between them would be dreadful.

The coordinated closing of all borders for months allowed nations to anticipate further contamination and ensure the safety of their citizens. The advantage of Sint Maarten/Saint Martin (“the Island”) is that it is secluded and it is in the middle of the ocean, therefore an easy solution to protect citizens against further contamination is for now, to only allow essential travelers to continue crossing borders: scientists, doctors, journalists, politicians, businesspeople etc. This can be achieved by reaching agreements on the pre-screening of travelers and allowing individuals that are in good condition to submitting themselves to monitored quarantine. This is already being implemented in some jurisdictions and will be further reinforced globally once the second wave begins.

Sint Maarten is a small tourism-dependent and environmentally vulnerable economy. Dutch and French governments recently committed to help to stimulate both economies, sure, but the total dependency ratio of the population on tourism is too high, and suspending traveling and closing all borders for months already caused hardship. For the first time in decades, the future of the Island is no longer dependent on its ability to receive tourists, but in its ability to survive without them. Forget about cruise ships for a while, expect a tanking tourism industry, increase in prices, shrinking GDP (see recent IMF reporting, 07-13-20), lower investments, and an increase in unemployment — all of which will lead to the behavior of individuals and firms to forever be changed.

The ones with liquidity will survive, the others will “starve”. This reality is not just exclusively ours, Sovereign States, and citizens from around the world are threatened by health and economic uncertainties and will struggle to save their economies. This will continue long after quarantines and pandemic waves and as defined by the theory of evolution by natural selection; the ones that can adapt to change will survive; others will become extinct.

Drastic times call for drastic measures and it is why we must act quickly and decisively in rethinking our economy. We must take into account the long-term consequences of our actions and ask ourselves not only how to overcome the immediate threat, but also what kind of Island we want to inhabit once the Covid-19 and -20 storms pass.

One option could be to transform to a sprawling “Innovative”, financial and tech-friendly Island producing its own clean energy. Such transformation would mean further liberalizing and actively promoting the private-sector. Country’s Regulation laws that could help to achieve this are already in place (see the Economic Free Zone Laws “EFZ”) and would require minimum efforts for the Island but the returns would be felt immediately.

The EFZ would offer a hassle-free environment in which companies could operate. A competitive and comprehensive regulatory, fiscal, and unique innovation ecosystem would offer immense benefits to all participants and to the Island. Companies would establish/seat their headquarters. Start-ups and developers would come for support, talent, and capital. Investors would come to look for high fliers, financial institutions seek collaboration and adoption, the business and general public would learn about innovative solutions, and overseas governments would launch bilateral partnerships.

The EFZ could become a world platform and forum for the implementation of technology. Businesses and partners would be encouraged to foster success in training, talent development, and placement of individuals wanting to master today and tomorrow’s technology challenges. It would offer training programs and education on blockchain, AI (Artificial Intelligence), but also medicine and related healthcare subjects with the contribution of technology.

Diversification of our economy and our education system is a necessity and this scenario would have a direct positive impact on our youth, education, sport, health, and employment. It would help protect our citizens against the future effects caused by great monetary inflation. It would allow the Island to offset temporary economic falls but most importantly, help to further strengthen the Island’s financial and economic stability, it’s sustainability and autonomy, it’s autonomy prosperity, and global recognition.

The decisions our politicians will take in the coming weeks and months will shape the Island for years to come and as a socio-economic transition approaches, the natural forces that are pushing towards changes is offering our government a broad choice. They can go with the flow and support transition or they can build barricades. Preparing the way for a transition will mean taking action in the form of national decrees. It will mean fewer pretended agreements on policy and more realistic ones.

The unwanted alternative, keeping blinders on, allowing tourists to contaminate the Island and maintaining the current course; will lead to a dramatic depression and proliferation of truly draconian effects on trade and capital flows.

This EFZ scenario offers the Island a splendid opportunity, let us welcome it!

Malick Maachi
This email address is being protected from spambots. You need JavaScript enabled to view it.
ZUG, Switzerland
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