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24th of April 2014
   
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Economic Policy
  
To realize Aruba’s economic vision and mission the Economic Vision and Report provides a description of the new fundamentals underlying sustainable economic development. The Economic Policy Framework underscores the dynamics and interrelatedness of economic strategies, structures, and stakeholders, through which (public- private) economic investments and programs for economic development can be organized in a sustainable fashion. Herein, the Economic Policy Framework focuses on.
 A.      Multiple lines of economic action and different stakeholders, including consumers, business, investors, and government. These lines of action address four coordinated lines of economic development, covering:
-          National Innovation
-          Investment Promotion
-          Business Growth
-          Empowered Consumers
 B.       Multiple levels of economic development, including macro-economic conditions, industry activities, (micro- economic) business environments, including the creation of economic value over time. The levels of economic cover:
1.        Economic Policies
2.        Economic Activities
3.     Economic Value
  
Summary Economic Outlook

The economic outlook for Aruba in 2011 is positive. Government investments associated with “Product Aruba”, along with fiscal incentives will also stimulate the economy and contribute to increased confidence in the real sector. The construction of Ritz Carlton, two plants by WEB N.V. and infrastructural investments are expected to boost the total private investments with 25.4 percent in real terms. Exports will grow with 22.3 percent to a value of Afl. 3.3 million. Main drivers for this growth are the opening of the oil refinery and an increase in tourism receipts of 10.8 percent nominal in 2011.

 Aruba is recovering from the economic downturn in 2010, mainly caused by external factors associated with the global crisis in 2008/2009. Access to credit, development in oil and food prices, and business and consumer confidence are key factors for achieving positive economic results in 2011.

  As a result of business growth in 2011, consumer confidence and disposable income will increase. Private consumption will rise by 2.3 percent in real terms reaching an amount of Afl. 2.682 million.

 The nominal GDP is projected to increase by 12.1 percent to a value of Afl. 4.870 million. In real terms, this is equal to 9.9 percent growth compared to 2010.  

 

A copy of the   Aruba Economic Outlook 2011  is available.

 

Table Aruba Economic Outlook 2011

Macroeconomic  indicators
2009
2010
2011
2009
2010
 2011
Inflation
   -2.1 2.1 3.0 
Nominal
      
GDP at market prices, mln.Afl.
4.5354.3454.870-8.4-4.212.1
Private consumption, mln.Afl.
2.542
2.545
2.682
-6.4
0.1
5.4
Public consumption, mln.Afl
1.057
1.176
1.245
-2.1
11.2
5.9




   
Private investments,  mln.Afl.
1,273
1,131
1,454
-18.2
-11.2
28.6
Public investments incl. FDA, mln.Afl.82
62
   74
   5.5
  -25
   20.7
       
Export Goods and Services,  mln.Afl
2,906
2,704
3,385
- 12.6
-7.0
25.2
Import Goods and Services, mln.Afl.
3,382
3,272
3,970
- 12
-3.2
21.3
       
Real sector
      
GDP at market prices                    %
   -8.1
-5.1
9.9
Private consumption                     %   -4.4-1.9
2.3
Public consumption                                %   3.1
2.5
-2.3
       
 Private investments                                %   -15.8
-13.5
25.4
Public investments incl. FDA                   %   8.6
-27.0
17.6
       
Export goods and services                    %
   -9.4
-9.0
22.3
Import goods and services                    %   -6.1
-7.2
15.4
Government indicators
      
 Total tax revenue                          mln.Afl.  932 1,031   904  -4.610.6 -12.4 
 Total expenditure                          mln.Afl.1,2281,342 1,307  -4.8  9.2  -2.6 
Financial surplus (+)deficit(-)          mln.Afl.   -159 -206  -279    
Total Debt                                      mln.Afl.  2,2042.41 2,653    7.5  7.711.7 
 Total Debt in % of GDP                           %    4955 54 
 Household Indicators      
 Population                                 x 1.000 107,1104,5 106,1    
 GDP per capita                              mln.Afl.42,32841,583 45,894    
 Employment                                            %   -1.7 -5.4 1.8 
 Disposable income                                 %   -10.5-6.5 14.5 
 Tourism Indicators      
 Total visitors                               x 1.000 1,4191,394 1,439 2.6 -1.8 3.2 
 Total stay-over visitors               x 1.000  813  825 841 -1.7  1.52.0 
 Total cruise passengers              x 1.000  607  569  5989.1 -6.2 5.0 
 Tourism receipts                         mln.Afl. 2,1642,212 2,451 -5.0 2.2 10.8 
































 

 
Source: DEACI 

1)
Preliminary estimates of Central Bank Aruba
2) Preliminary estimates of IMF
3) Preliminary estimates of IMF

 
MARUBA
Aruba is a small island economy which is heavily dependent on Tourism. Each policy measure undertaken by the government has its consequences on the economy of Aruba. Up to date information on the economic performance of the main economic indicators and mechanism to project the performance of those indicators in the future are necessary for the government to monitor the economy of Aruba and to adapt the policies in a way to achieve a sustainable economic development. Therefore, in June 2005 the Department of Economic Affairs, Commerce and Industry (DEACI) started to develop a macro economic model for Aruba. The model will be operational in July 2006.

The macro-economic model named “MARUBA” is designed to simulate the operation of a national or international economy in terms of factors including the total amount of goods and services produced, total income earned, the level of employment of productive resources, and the general behavior of prices. The MARUBA gives the government the possibility to analyze the consequences of economic, fiscal and monetary policy decisions, provides simulation possibilities and allows economic forecast for at least 2 years.

A special Committee (Commissie Macro-Economisch Model CMM) of local institutions was installed to help develop such model. Although the model will be officially managed by the DEACI the members of the CMM have free access to the model. The official estimations of the macroeconomic figures will be produced by the CMM and officially published by the DEACI.

The CMM consists of the following members:
• The Department of Economic Affairs, Commerce and Industry (DEACI);
• The Central Bureau of Statistics (CBS);
• The Department of Finance (DF);
• The Department of Taxes (DT);
• The AIB Economic and Financial Services (AIB EFS);
• The Central Bank of Aruba (CBA);
• The Social Economic Council (SER).

 
The participation of different institutions in the CMM increases the possibilities for effective discussions and enhances the quality of the economic analysis. This contributes to enhance the Governments ability to prepare and introduce new policies on economic issues in Aruba.

With the MARUBA the government of Aruba aims to improve the macro economic decision making process which will be a useful tool in the process to acquire a balanced and sustainable economic growth.