Dr. Steven MartinaMinister of Economic Development & Tourism

Wednesday September 30, 2020

Sustainable Development Pillars

3

National Development Plan

4

SDG 8 Sustainable Economic Growth and Employment for All

5

ECONOMIC DEVELOPMENT: THE ULTIMATE OBJECTIVE

MORE JOBS

BETTER JOBS

BETTER LIVES

DECENT WORK AND ECONOMIC GROWTH

Let’s embark on a journey

8

Where are we now?

Fisc

al C

liff

-4%

-3%

-2%

-1%

0%

1%

2%

3%

4%

5%

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

Fiscal Cliff

If the current GDP mix of Investment, Export, Consumption, and Import is allowed to continue as is with no corrective actions; Curaçao economy will fall over a Fiscal Cliff in 2019, due to 3 concurrent factors: ▪ Debt Maturity

▪ Foreign tax rules expires▪ Refinery lease expires

Presented in 2015

The reality 2018/2019

Fisc

al C

liff

-4%

-3%

-2%

-1%

0%

1%

2%

3%

4%

5%

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

Fiscal Cliff

If the current GDP mix of Investment, Export, Consumption, and Import is allowed to continue as is with no corrective actions; Curaçao economy will fall over a Fiscal Cliff in 2019, due to 3 concurrent factors: ▪ Debt Maturity

▪ Foreign tax rules expires▪ Refinery lease expires

Pe

rfe

ct S

torm

▪ Venezuela crisis▪ Non operational Refinery▪ Bankruptcy several entities▪ Huge 2017 public debt▪ “Aanwijzing”▪ Giro

Where are we now?

CHALLENGES

Economic Challenges Fiscal Challenges Social Challenges

Curacao is facing a number of Challenges; Economic,

Fiscal, and Social; driven by external and internal factors.

CHALLENGES

2020 RECOVERY WAS ENVISIONED

14

DESPITE THESE CHALLENGESTHE 2020 OUTLOOK WAS MOST PROMISING AND ECONOMIC RECOVERY WAS UNDERWAY

PUBLIC FINANCES STABILIZING

2017 2018 2019 Proj. 2020

After Covid -166.8 -58.5 -19.3

Pre Covid -166.8 -58.5 -19.3 24.5

-200

-150

-100

-50

0

50

Budget deficit

Source: Ministry of Finance

Source: Assessment of Curacao’s legal and regulatory frame- work, Exchange of Information on Request(EOIR), November 2019

CURACAO COMPLIANCE RATING

17

TOURISM WAS THRIVING

18

2020 RECOVERY WAS ENVISIONED

DESPITE THESE CHALLENGESTHE 2020 OUTLOOK WAS MOST PROMISING AND ECONOMIC RECOVERY WAS UNDERWAY

AND THEN….

COVID19 PANDEMIC

CHALLENGES

The reality 2020

Fisc

al C

liff

-4%

-3%

-2%

-1%

0%

1%

2%

3%

4%

5%

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

Fiscal Cliff

If the current GDP mix of Investment, Export, Consumption, and Import is allowed to continue as is with no corrective actions; Curaçao economy will fall over a Fiscal Cliff in 2019, due to 3 concurrent factors: ▪ Debt Maturity

▪ Foreign tax rules expires▪ Refinery lease expires

Pe

rfe

ct S

torm

▪ Venezuela crisis▪ Non operational Refinery▪ Bankruptcy several entities▪ Increased public debt▪ “Aanwijzing”▪ Giro ▪ COVID19▪ Refinery closure

PUBLIC FINANCES SEVERELY IMPACTED

2017 2018 2019 Proj. 2020

After Covid -166.8 -58.5 -19.3 -651.7

Pre Covid -166.8 -58.5 -19.3 24.5

-700

-600

-500

-400

-300

-200

-100

0

100

Budget deficit

Source: Ministry of Finance

23

HOW DO WE COURSE CORRECT?

COURSE CORRECT PHASES

SurvivalApril- 6 MONTHS

“ALIVIO” PACKAGE (NOW, ZZP, JOB LOSS AND RESILIENCE BENEFITS)

LENDING ON FABORABLE CONDITIONS (OBNA, KORPODEKO, QREDITS)

INCOME REDUCTION AND WORKTIME REDUCTION (VOLUNTARY)

EASE ON LOAN REPAYMENT (PRIVATE BANKS)

Others

SURVIVAL

Period April – August 2020

TBZOTijdelijke Bijstand Zelfstandige Ondernemers

Total amount spent 12.2 Million starting with 3051 applicants and gradually decreasing.

NOWNood Maatregel Overbrugging Werkgelegenheid

Total amount spent 71.1 Million started with 1327 companies, 18.843 employees and gradually decreasing.

Credit Facility for SME’sApril – August 2020

Number of applications received : 369Total Amount of the loans : NAF. 911.647

Small Business Coaching ProgramJune – September 2020

253 small businesses369 coaching trajectories100 small business coaches

SME Training programJuly – September

Number of persons trained: 800+ persons trained

www.fondodisosten.org

CURACAO SAFE VACATION DESTINATION (OPENING OF THE BOARDERS )

12.5% REDUCTION ON EMPLOYEE BENEFITS FOR PUBLIC/SEMI PUBLIC

ENTITIES

25% REDUCTION ON EMPLOYEE BENEFITS OF MINISTERS AND PARLIAMENT

MEMBERS

AGRESSIVE COST REDUCTION IN GOVERNMENT BUDGET

OTHERS

RECOVERY

COURSE CORRECT PHASES

SurvivalApril- 6 MONTHS

30

ASPIREWhere do we want to be?

ASPIRATION

Curacao’s economic development aspiration is being …

Connected

Sustainable

Hospitable

Innovative

ASPIRATION

Connected

Sustainable

Hospitable

Innovative

Curacao’s economic development aspiration

to become a nation with a vibrant, innovative and sustainable economy recognized globally as a

premier place to live, learn, play, work and do business.

ECONOMIC DEVELOPMENT: THE ULTIMATE OBJECTIVE

MORE JOBS

BETTER JOBS

BETTER LIVES

34

ARCHITECTHow do we get there?

ECONOMIC DEVELOPMENT: AUSTERITY VS STIMULUS

“Filling in the financing gap with financing in the short term while taking strong action to launch medium-term reforms would achieve better outcomes than implementing temporary/easily reversible expenditure cuts. To the extent of available financing, the fiscal adjustment path should be gradual to avoid the multiplier effects on the economy.”

IMF, June 19 2020

Economic outlook Curaçao and Sint Maarten

ECONOMIC DEVELOPMENT: AUSTERITY VS STIMULUS

“Fiscal austerity — slashing government spending in an attempt to balance the budget — is a really bad idea in a depressed economy. To avoid a depression you need to have someone — namely, the government — maintain or, better yet, increase spending while everyone else is cutting.” Nobel Price-winning economist Paul KrugmanNew York Times, August 6 2020

Professor in the Graduate Center Economics Ph.D. program and distinguished scholar at the Luxembourg Income Study Center at the City University of New York. In addition, he is professor emeritus of Princeton University’s Woodrow Wilson School.

ECONOMIC DEVELOPMENT: AUSTERITY VS STIMULUS

“Het is niet verstandig om de diepe economische crisis te lijf te gaan met bezuinigingen of door belastingen te verhogen. Dat ligt niet voor de hand en staat dus niet bovenaan de prioriteitenlijst.

Het is geen tijd voor bezuinigingen of lastenverzwaringen.

In deze fase van de economie is dat niet verstandig. Het kabinet zal daarentegen juist met extra uitgaven komen om te proberen de economische klap zo zacht mogelijk te laten zijn”.

Mark Rutte, 14 augustus 2020Prime Minister of the Netherlands

ECONOMIC DEVELOPMENT FRAMEWORK: BUILDING BLOCKS

IMPERATIVES

ENABLERS FORDEVELOPMENT

INVESTMENTSSECTORS/AREASDEVELOPMENT

EXPORT DEVELOPMENT

WORKFORCE DEVELOPMENT

Short term

Medium term

Long term

Tourism Financial Services

Renewable Energy Technology Logistics: Airport, Maritime

Trade,Distribution/Export

Manufacturing Transnational education

Cultural andcreative

AgricultureLivestock / Fisheries

SECTORS FOR DEVELOPMENT

PUBLIC PRIVATE INVESTMENTS

AREAS FOR DEVELOPMENT

BULLENBAY

DOWN TOWN

RIF & ZAKITO

ST. MARTHA

RIF

RIF & CORIDOR AREA

ZAKITó

ZAKITó

ZAKITó

ZAKITó

ZAKITó

BULLENBAY

BULLENBAY

▪ Industrial Waste Water Treatment (IWWT)

▪ Agricultural area

▪ LNG terminal

▪ Oil Terminal expansion / Storage tanks

▪ Bulk transshipment

▪ Service facilities

▪ Mooring location

BULLENBAY

STATE OWNED ENTERPRISES

▪ CPA, RDK, CDMH, CUROIL, AQUALECTRA

IN COLLABORATION WITH

SANTA MARTHA

• 1 Km shoreline• Health corals and underwater life• Circa 1.300 m2 beach

Santa Martha Area Development

Santa Martha Bay 3 Pillars• FACILITY : Quality urban design and architecture

• GREEN : Outdoor activity's , Farm to Fork.

• BLUE : Water-bound activity’s, Marina.GREEN Value

BLUE Value

FACILITY Value

DOWN TOWN

ORANGE ECONOMY

The Creative Cluster

The Creative Hub

The Creative City

Investment summit 10 – 12 October 2019

60

AREAS FOR DEVELOPMENT

BULLENBAY

DOWN TOWN

RIF & ZAKITO

ST. MARTHA

ECONOMIC DEVELOPMENT FRAMEWORK: BUILDING BLOCKS

IMPERATIVES

ENABLERS FORDEVELOPMENT

INVESTMENTSSECTORS/AREASDEVELOPMENT

EXPORT DEVELOPMENT

WORKFORCE DEVELOPMENT

Short term

Medium term

Long term

EXPORT DEVELOPMENT

Source: CBCS, presentation annual repor 2019

ECONOMIC DEVELOPMENT FRAMEWORK: BUILDING BLOCKS

IMPERATIVES

ENABLERS FORDEVELOPMENT

INVESTMENTSSECTORS/AREASDEVELOPMENT

EXPORT DEVELOPMENT

WORKFORCE DEVELOPMENT

Short term

Medium term

Long term

ENABLERS FOR DEVELOPMENT

STRUCTURAL REFORMS MACRO ECONOMIC POLICIES

ECONOMIC DEVELOPMENTPOLICIES

FISCAL (ABB) MONETARY SME

SOCIAL SECURITY FISCAL COOPERATIVES

LABOR MARKET ENERGY

HEALTH SECTOR INNOVATION

IMMIGRATION ENTREPENEURSHIP

PERMIT PROCESS STI (SCIENCE TECHNOLOGY INNOVATION)

INVEST CURACAO DOUGHNUT ECONOMY

SUSTAINABLE ECONOMIC DEVELOPMENT

INVEST CURACAO: Instruments for Economic Recovery and Sustainable growth

Job losers After March 15th

Income support for Self Employed

Financing facility SME

Emergency Fund

Job losers Before March 15th

Social Assistance Benefit

Payroll Subsidy(NOW)

Guarantee on Equity Financing

Big Ticket Items

Guarantee on Debt Financing

Guarantee on Equity Financing

Financing for Innovation

Seed Capital

Guarantee on Debt Financing

Early Stage Financing

Economic Recovery Fund

Business DevelopmentInstruments

Business RetentionInstruments

Public Investment Fund

Public Investments

ENABLERS FOR DEVELOPMENT

STRUCTURAL REFORMS MACRO ECONOMIC POLICIES

ECONOMIC DEVELOPMENTPOLICIES

FISCAL (ABB) MONETARY SME

SOCIAL SECURITY FISCAL COOPERATIVES

LABOR MARKET ENERGY

PUBLIC HEALTH INNOVATION

IMMIGRATION ENTREPENEURSHIP

PERMIT PROCESS STI (SCIENCE TECHNOLOGY INNOVATION)

INVEST CURACAO DOUGHNUT ECONOMY

69

ECONOMIC DEVELOPMENT: THE ULTIMATE OBJECTIVE

MORE JOBS

BETTER JOBS

BETTER LIVES

AMBITION: THE INVESTMENT AND EXPORT AGENDA 2021 – 2025/2027

RETAIN

EXISTING JOBS

CREATE 15.000

NEW JOBS

PRIVATE

INVESTMENTS

1.500 MILJ.

PUBLIC

INVESTMENTS

500 MILJ.

EXPORT

INCREASE

10%

The Road to sustainable economic growth and employment for all

72

Our constant focus should be:meeting the needs of the present

without compromising the ability of future generations to meet their needs.