Possibilities Singapore Plan In Aruba

ARUBA, CARIBBEAN HUB

Master Planning the Singapore Way

Remo Kock

MBA Masterclass

International Marketing and Business

Caribbean University, Aruba

Palm Beach, January 2005

1.0. Preface

Summary

The paper examines the possibilities for the Island of Aruba to make use of a economic Master Plan to diversify its market. It focuses on issues like economic hub, logistics hub, knowledge economy, similarities of economies, captive insurance, as well as the viability of implementing a Master Plan, possible limitations and minimum requirements. In the discussion challenges and opportunities are assessed if using a Master Plan. The paper concludes that using a Master Plan could be a viable move toward a diversified economy for Aruba, taking into account that it will probably take 3 or 4 decennia to accomplish the goal, and that without a Master (policy) Plan, supported by all future governments, it will fail.

Aruba as an Economic hub

The relevance of discussing Aruba as a potential economic hub in the Caribbean, lies within recent statements of the Aruban Government which is striving for diversification of the economy. According to the government, Aruba must diversify its economy, in order to lessen the risks related to a back fall in the tourist industry, which is currently the only economic pillar of the island. The vulnerability of the tourism industry has become more than evident after the terrorists attacks of September 11th, that caused a massive decline in tourists coming to the Island.

Focal points

According to the Aruban Government there are 4 major focus points which can be used to develop the current economy into a more diversified economy, namely:

1. Diversification of the existing tourism sector

2. Turning Aruba into a knowledge Economy

3. Globalizing the Financial Sector of Aruba

4. Turning the local transportation and logistics facilities into a hub for Latin American countries to the USA and Europe.

These factors were also focal points of the Singapore Government to diversify their economy. A goal of the Singapore government was to become an Intelligent Island, offering different services to regional and global customers.

The Singapore way

The planning, management and implementation in Singapore all took place within the framework of a Master Plan, with the goal of turning Singapore from a third world country into a first world country. For the Aruban economy to become more diversified the Aruban government also should start thinking about a Master Plan. This will take a lot of planning, budgeting, implementing and managing a huge undertaking. This will probably take decennia to accomplish. It took Singapore almost 40 years.

The omitted factor: tourism

Because of the fact that tourism is a factor which, although very important, has been discussed very often by government and other actors dealing with the Aruban economy, the paper focuses only on the other three, namely: knowledge economy; the financial sector and transport & logistics.

2.0. Topic, focus and discussion

2.1. Topic

In this chapter the general topics concerning the paper are mentioned.

Diversification of the Aruban Economy according to the Government

The Aruban economy depends at the moment almost solely on the tourism industry. This economic one-sidedness stresses the adaptability of the Aruban economy and Aruban business community to the utmost, since Aruba must compete with many other tourist destinations in the world, especially the Caribbean.

The Aruba government policy has since long been focused on long term economic growth.

It is the desire of the current government, that in the future more attention is given to diversification of the economy, so the vulnerabilities of tourism as a main economic activity can be, more or less, neutralized . Although the topic of diversification has been the focus of political discussion for quite some years, it has gotten emphasized attention after the terrorists attack of 11 September 2001, indicating that tourism is a very incident sensitive sector.

The government has argued that Aruba can benefit from several macro-economical factors. For example, its geographical position, the existing economic structure, the regional and global economical developments and the available work potential.

Two possible paths for diversification are recognized. The first option is to diversify the tourism industry by exploiting new markets such as ecotourism, golf tourism and culture tourism. Secondly, creating new markets outside the realm of tourism by developing opportunities in logistics and transportation (Free Zone Aruba), financial services (Captive insurance) and a knowledge economy (test-bed for universities and businesses).

Considering the fact that tourism is a subject amply talked about, it was left out of the thesis. The focus is on new markets and new products, which can be used to diversify the market in Aruba for local and global players. For Aruba to be successful the government has to setup a well balanced program, which involves planning, organizing and controlling of every aspect.

Diversification of the Singapore economy through a Master Plan

A few decades ago, Singapore also felt a need for economic reform. After its independence from Malaysia in 1965, Singapore decided it wanted to develop itself from a third-world to a first-world country. The Singapore government through its prime minister Lee Kuan Yew shaped Singapore into a first-world country by meticulously addressing several problem areas working with cool efficiency. Singapore changed its economic structure, shifting from local (agriculture, quarrying) to global services.

Aruba, diversification the Singapore way?

The idea of taking on a role similar to Singapore is