Curaçao: Country and Foreign Investment
Economy and Currency
The currency at the time of writing is the Netherlands Antillean guilder, gulden or florin (these terms are used interchangeably). The rate of exchange is fixed against the US dollar at US$1 = ANG1.790. It had been planned to introduce the Caribbean Guilder for Curaçao and Sint Maarten at the same time that the Netherlands Antilles were dissolved. However, cost and logistical factors have delayed the introduction of the new currency until at least 2013, with further delays or indeed an adoption of the US dollar a distinct possibility.
Curaçao is not naturally well-favoured with domestic resources; due to the lack of arable land and water, agriculture accounts for only around 1% of GDP. The economy is largely based on tourism, petroleum processing/trans-shipment and offshore finance. Almost all the consumer goods are imported from Venezuela and the US; as a result local inflation tends to reflect international levels.
After oil was discovered in Venezuela, the Dutch-British Shell oil company built a refinery on Curaçao, which dominated exports until it was closed in 1985, with dismal effects on the economy and employment. A limited re-opening has helped the economy to grow steadily more recently, but unemployment is still high by international standards.
The Government's fiscal position has deteriorated sharply in recent years, and there is high debt with a substantial annual budget deficit. The islands receive approximately USD100m a year in aid from Holland and international agencies. GDP per head was USD15,000 in 2011.
Growth in 2009 of -0.5% was recorded with a modest increase to 0.1% recorded for 2010, while figures for 2011 show a decline of -0.6%, with a further drop of 0.5% forecast for 2012.
The offshore financial sector began during the German occupation of Holland in the Second World War, when Dutch companies sought corporate and financial refuge, and has developed steadily ever since, giving Curaçao in particular a more sophisticated business infrastructure than most countries in the region.
The islands have good natural harbours, and there is a ship repair facility in Curaçao.