During the 1999 Copa America which was held in Paraguay, the Minister of Economic Affairs of the Netherlands Antilles decided to go to .. Paraguay on an economic mission. “Pure coincidence” he stated. While I don’t want to question his genius stroke of luck, I will address his trade agenda/wish list in the Southern Cone.
First, start an air connection between Willemstad and Asunción for the now defunct state-owned airlines, ALM. Second, since Paraguay was resurfacing a great deal of it’s 10,000 km paved roads, the Minister thought it to be a good idea to offer the authorities our asphalt from the asphalt lake. Third, impressed with a visit to a slaughterhouse where they butcher about 800 cows a day, an idea was born to start a Paraguayan-Antillean cow breeding initiative on our islands.
While probably no one is surprised that none of these wishes became reality, it still amazes me how we insist that economic growth is about picking the right miracle project out of a bowl. A huge mall that will attract shopping tourist and create 2,000 new jobs, a commercial space project, export of rice and sugar to the EU, a Las Vegas-inspired strip with casino’s and what not by the same company once in the running for upgrading the refinery. And who can forget the recycled cow breeding plan of the late nineties to feed “hungry cows from Colombia”.
I want to emphasize again that it’s impossible to have sustainable economic development based on one project here and another there. Sustainable economic growth that will lift the middle class and the poor is viable only when we make structural changes to modernize our economic foundations. Under my watch the inward-looking protection policy was overturned, a fair competition authority was institutionalized and many tax treaties were signed. But these changes are far from sufficient. We need to make our labor market flexible so it reflects the age we live in, we need to invest in innovation, automatization and productivity raising initiatives. We need to engage in negotiating trade agreements, since we are one of the only ones left in the world without a trade agreement.
Do we listen? This week the Ministry of Economic Development kick-started an activity to promote export. Yet, not even our affairs in the World Trade Organization are straightened out which are a prerequisite to negotiate any trade agreement.
We have a choice. Keep waiting for the illusive silver bullet. Or, we modernize our economic foundations which will automatically attract good and solid projects that create welfare and new jobs.