ARUBA. Two steps ahead

Aruba is experiencing some of the best moments in its history. It rapidly rebounded from the recent global 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.

Located 15 miles off the Venezuelan coast, Aruba was discovered and claimed by Spain in 1499. It fell under Dutch rule 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 main 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 nation’s tourism industry.

Today, the country’s two main economic pillars are tourism and oil; the 2008-2009 global 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 growth leapt back into the black and soared to 8.9%.

“When we came into office in 2009, we took immediate action,” says Aruba’s Prime Minister Mike Eman. “First, 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 more hotel rooms was not the answer. Although that strategy had worked well in the past for Aruba, we realized that the diminishing returns from hotel construction had to be replaced by a policy of smart growth 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 now 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-largest city San Nicolas – whose development is undeniably linked to the oil refinery – as well as 21 other neighborhoods on the island. “I firmly believe in the importance and value of human, social capital,” says the Prime Minister. “As a government, we can help create a physical infrastructure that encourages people to walk more in their neighborhoods and build open, public spaces so people can meet either for lunch or for a stroll after work. We are doing this with our urban renewal programs, including the construction of the Caribbean’s longest linear park. The added benefit to this is that people improve their health by walking more, so these efforts help improve lives in many 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 every Aruban.” Mike Eman, Prime Minister of Aruba

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 advantage 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 every Aruban.”

Aruba is undergoing a process of deep structural reforms that are already 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, as well as economic diversification and international cooperation. Aruba is an example not just for the Caribbean, but also for countries 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 many of us remember our long struggle to gain our autonomy within the Dutch Kingdom, which we achieved in 1986 with our own parliament, flag, national anthem, central bank, and so on. When you fight for something, you tend to appreciate it perhaps even more.

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