ARUBA RECOGNIZES FINANCIAL DOWNWARD SPIRAL

ARUBA: HEADED DOWN THE CRAPPER!

(Source)--Looking at Aruba over the last 20 years, we see a vibrant tourism sector, having transformed the economy and made Aruba a household name in many parts of the world. Looking at where Aruba was in 1986 and where it is now, and comparing it with most countries in the region, Aruba's achievement in terms of economic growth is staggering.


The size of the economy has increased almost five fold with GDP increasing from Afl. 800 million in 1986 to over Afl. 4,000 million in 2006 with the per capita income in dollar terms moving to the 20,000 US dollar range, which is at the same level as many industrialized countries, such as Spain, while maintaining relative price stability.


This has been partly achieved by relying extensively on immigration to such an extent that today a third of the population is foreign-born. In this process, while Aruba's economy has become much more sophisticated than it was before the time of its separate status, it has become even more dependent on one activity, tourism and one market, the U.S.

Aaah, but wait! Here's the bad news for Aruba...

As such, the economy has become vulnerable to a down-turn in the U.S. economy and vulnerable to a possible loss of competitive position in the tourist industry in the Caribbean region.


An adverse external shock, by worsening the balance of payments position and deteriorating public finances, could have spiral effects on the Aruban economy pushing it into a severe recession with far reaching implications for the welfare of the Aruban people.

See ya at the Boston Globe Travel Show Aruba!