Aruba: Governance, economic resilience, a green vision

Aruba is experiencing some of the best moments in its history. It rapidly rebounded from the recent world recession and its leadership is implementing strategies to tangibly improve the lives of its citizens, protect the environment with a ‘green’ vision, and develop Aruba into a high-level business hub for Latin America. 

Behind a beautiful place to live and do business lie effective governance, economic resilience, a green vision and a progressive social commitment. Located 15 miles off the Venezuelan coast, Aruba was discovered and claimed by Spain in 1499. It fell under Dutch policy in 1636 and seceded from the Netherlands Antilles in 1986 to become a separate, autonomous member of the Kingdom of the Netherlands.

Aruba’s economy has been dominated by three major industries. A 19th century gold rush was followed by the opening of an oil refinery in 1924, with the closing decades of the 20th century producing a boom in the southern Caribbean country’s tourism industry.

Today, the country’s two major economic pillars are tourism and oil; the 2008-2009 world economic crisis hit the island hard. Tourist numbers plummeted and the Valero Aruba Refinery in San Nicolas closed. Annual GDP expansion in 2007 of 2% fell to 0.2% in 2008, followed by -11% in 2009 and -3.2% in 2010. In 2011, however, real GDP increase leapt back into the black and soared to 8.9%.

“At the same time as we came into office in 2009, we took immediate action,” says Aruba’s Prime Minister Mike Eman. “Prime, we reached out to strategic partners that had left the island – KLM, Carnival Cruise Lines and Valero – and convinced them to return based on our government’s professional and pro-business approach. Second, we knew long term that building additional hotel rooms was not the answer. Although that strategy had worked well in the completed for Aruba, we realized that the diminishing returns from hotel construction had to be restored by a policy of smart increase that would create an Aruba that is a beautiful place for Arubans to live and a beautiful place for Aruba’s friends and tourists to visit. We decided to focus on quality rather than quantity; we decided to invest in Aruba’s people and infrastructure. We are presently headed in a very positive direction.”

The government launched two major programs, called Bo Aruba (Your Aruba) and Bo Bario (Your Neighborhood), to rejuvenate and improve the country’s capital Oranjestad and its second-major city San Nicolas – whose development is undeniably linked to the oil refinery – inclunding 21 other neighborhoods on the island. “I firmly believe in the importance and price of human, social capital,” says the Prime Minister. “As a government, we can help create a physical infrastructure that encourages people to walk additional in their neighborhoods and build open, public spaces so people can meet either for lunch or for a stroll next work. We are doing this with our urban renewal programs, inclunding the construction of the Caribbean’s longest linear park. The added benefit to this is that people improve their health by walking additional, so these efforts help improve lives in a lot of ways.”
“Aruba has five-star hotels, but we want to see five-star schools, neighborhoods, infrastructure and homes for the elderly. It is my ambition to see that we manage to turn our continued material prosperity into wellbeing and happiness for each Aruban.”

He adds, “As the private sector sees the seriousness of the government’s commitment, it is joining in with its own investment and initiatives.”

Mr. Eman is popular with Arubans and he enjoys a high approval rating. The stable legislative majority held by his Arubaanse Volks Partj (AVP) will help with the implementation of reforms it wants to push through to improve public sector efficiency, which include an overhaul of government institutions.

“We have made tough policy decisions that ensured everyone – government, employers, unions, and employees – shared in the sacrifice by making structural reforms in social security, health care and pension systems. We reached these decisions through a process of national consensus known as ‘social dialogue’ which is based on a Dutch political process that we borrowed and adapted to Aruba,” says Mr. Eman.

Under its economic diversification plans, the government is seeking to develop a third economic pillar: capitalizing on Aruba’s unique strategic geopolitical position to become a business hub between the EU, Latin America and the United States. “The initial focus will be on technology for renewable energy and taking chance of the island’s favorable climatological conditions,” says Mr. Eman.

The Prime Minister is determined that social gains should keep pace with economic gains. “Aruba has five-star hotels, but we want to see five-star schools, five-star neighborhoods, five-star infrastructure and five-star homes for the elderly,” says Mr. Eman. “It is my ambition to see that we manage to turn our continued material prosperity into wellbeing and happiness for each Aruban.”

Aruba is undergoing a process of deep structural reforms that are by presently positively changing not just the face but the heart and soul of the country. The small island is increasingly becoming an example of good governance, environmental consciousness, cultural diversity and peaceful coexistence, inclunding economic diversification and international cooperation. Aruba is an example not just for the Caribbean, but as well for nations around the world.

“These are challenging times. Not just for Aruba, but for the whole world. We are just finding our feet again and have started to upgrade Aruba to be able to receive our guests in the next 25 years,” says Mr. Eman.

“We Arubans do love our country. I think part of that is because a lot of of us remember our long struggle to gain our autonomy within the Dutch Kingdom, which we completed in 1986 with our own parliament, flag, national anthem, central bank, and so on. At the same time as you fight for something, you tend to appreciate it perhaps even additional.

“With our large city renewal, neighborhood development and Aruba making the transition to a sustainable way of living, Aruba is on the way back.”