A collapse in tourism due to the coronavirus pandemic has triggered Aruba towards one of the largest economic contractions in the world, causing the island to try to diversify beyond its sun and sand image by bringing a long-disused oil refinery back into operation.

Support from the Netherlands helped that Caribbean Island finance a stimulus package that will mitigate the impact of the 25.5% decline in the economy on workers and businesses in 2020. That downturn was just behind it Libya, Maldives and Venezuela, IMF (IMF) show data. However, these subsidies increased Aruba’s budget deficit to 17% of gross domestic product (GDP), according to the IMF, leading some experts and residents to argue that the island should diversify its economy to ensure that the government keeps its budget without balancing can Dutch Help.

The 67% drop in tourist arrivals has been like devastating for small businesses Aruba Bob Snorkeling, who did several tours the day before the COVID-19 pandemic. “When COVID came over, they only crashed once a day, once or twice a week and then nothing at all, “said 30-year-old instructor and partner Jesus Maduro as he sipped coffee in the shade of solar panels in the company’s tree-filled backyard.

Quarterly government subsidies of 4,000 florins ($ 2,247.19) have kept the company on schedule with rental payments and electricity payments. Such payments have helped keep company closings below 2019 levels, said Martijn Balkestein, executive director of the Aruba Chamber of Commerce. As the constituent country of the Kingdom of Netherlands, Aruba receives support from Amsterdam. The Netherlands has agreed to meet Aruba’s funding needs during the pandemic, which is dependent on economic reforms such as: B. Cuts in public sector salaries implemented over the past year. But Dutch Officials have said they will ultimately expect Arubaas well as other components Caribbean Islands of Curacao and Sint Maarten – which are part of the Kingdom of the Netherlands but to have autonomy over internal affairs – to be independent. Fitch Ratings rates the island’s debt at BB below investment grade. Aruba In 2012, a $ 253 million bond was issued with a yield of 4.625% and matures in 2023.

TALKING ABOUT REFINING REOPENING After the borders closed in March 2020, the island reopened to tourism last June to visitors who present a negative coronavirus test. The country has reported 10,324 COVID-19 cases and 92 deaths.

However, the local business community is not relying on an immediate recovery in tourism to restore government finances. The Aruba The hotel and tourism association predicts that hotel occupancy will remain at less than half of capacity in 2021. “The pandemic is very loud and clear for all residents Aruba that we cannot rely on a pillar, “said Balkestein.

To this end, the authorities are in talks with a US Company wishing to build a terminal for the import of liquefied natural gas on the site of an oil refinery that has been closed since 2012. Another company wants to restart the system itself. In 2012, the refinery’s former operator, US-based Valero Energy Corp, gave it up due to low profits.

Still, some residents hope that its revival could change the fortunes of San Nicolas, the rundown refinery town on the southeastern tip of Aruba, a half-hour drive from the glitzy beach hotels and casinos on the island’s west coast, whose mostly empty streets flanked by murals Shutters are lined with shutters. “You see, it’s a ghost town,” said Kendrick Kock, a cell phone repair shop owner who saw sales fell 50% last year and asked him to lay off his two employees. “If they don’t open the refinery soon, it will be closed for San Nicolas.” ($ 1 = 1.7800 guilders)

(This story was not edited by Devdiscourse staff and is automatically generated from a syndicated feed.)

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