SINT M AARTEN

Workgroup National Recovery Plan

Interim Report October 2017

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Table of Contents

1. INTRODUCTION 4

1.1 THE EVENT 4 1.2 THE RESPONSE 4 1.3 THE APPROACH 4

2. NATIONAL RECOVERY PROGRAM 6

2.1 STRATEGY 6 2.1.1 VISION 6 2.1.2 PRINCIPLES 6 2.2 RECOVERY CYCLE 7 2.3 FUNDING/FINANCING FOR RECOVERY 7 2.3.1 BUDGET ANALYSIS 7 2.3.2 SOURCES 8

3. CONSULTATIONS 9

4. POST STORM ANALYSIS 11

4.1 THE NEW NORMAL 11 4.2 ECONOMY PRE-IRMA 11 4.3 POST DISASTER DAMAGE AND NEEDS ASSESSMENT 12 4.3.1 UTILITIES AND FUEL 12 4.3.2 SEA AND AIR PORTS 13 4.3.3 CONSTRUCTION 14 4.3.4 WHOLESALE AND RETAIL TRADE 15 4.3.5 HOTELS, RESTAURANTS, MARINE SECTOR 15 4.3.6 TELECOMMUNICATIONS & POST 17 4.3.7 TRANSPORTATION 18 4.3.8 FINANCIAL SECTOR 19 4.4 ECONOMIC IMPACT ANALYSIS 21 4.5 SOCIAL IMPACT ANALYSIS 22 4.6 FINANCIAL IMPACT ANALYSIS (NATIONAL BUDGETS) 26

5. BUSINESS RECOVERY 28

5.1 SUSTAINABLE ECONOMIC DEVELOPMENT 28 5.1.1 SHORT-TERM OPPORTUNITIES 28 5.1.2 BUSINESS RECOVERY INFRASTRUCTURE RESTORATION: STRONGER AND BETTER 32 5.1.3 BUSINESS RECOVERY: RECONSTRUCTION 34 5.1.4 ECONOMIC RECOVERY FUND (ERF) 34 5.1.5 NATIONAL TOURISM ORGANIZATION 35

6. COMMUNITY RECOVERY 36

6.1 HOUSING 36

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6.1.1 EMERGENCY HOUSING 36 6.1.2 SELF-BUILD/REPAIR HOUSING 37 6.1.3 COMMUNITY HOUSING 38 6.2 HEALTH 39 6.2.1 FACILITIES 39 6.2.2 MENTAL HEALTH FOUNDATION 40 6.2.3 WATER DISTRIBUTION 40 6.2.4 SANITATION & WASTE MANAGEMENT 40 6.3 EMPLOYMENT & TRAINING 41 6.3.1 TRAIN TO WORK 41 6.3.2 LABOR REFORM 42 6.3.3 FOREIGN LABOR 43 6.4 EDUCATION 43 6.4.1 MULTI-PURPOSE HALL 43 6.4.2 RENEWAL OF THE LEARNING ENVIRONMENT 44 6.5 MAINTENANCE OF LAW AND ORDER 45

7. GOVERNMENT RECOVERY 46

7.1 INSTITUTIONAL STRENGTHENING 46 7.1.1 NEW TAX SYSTEM 46 7.1.2 DATA 46 7.1.3 HUMAN RESOURCE DEVELOPMENT 47

8. CONCLUSIONS & RECOMMENDATIONS 48

8.1 CONCLUSIONS 48 8.1.1 EMERGENCY PHASE 48 8.1.2 COMMUNICATION 48 8.1.3 CARRYING CAPACITY 48 8.2 RECOMMENDATIONS 49 8.2.1 PRIORITIES 49 8.2.1 FINANCIAL RESOURCES 50 8.2.2 IMPLEMENTATION ORGANIZATION 51

LIST OF ABBREVIATIONS 53

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1. Introduction

1.1 The event

Twenty-two years after the devastation caused by hurricane Luis, Sint Maarten was assailed by one of the strongest category 5 storms recorded in modern history, hurricane Irma. With sustained winds exceeding 185

miles per hour, the storm cut a lethal path of destruction through the Leeward Islands. The eye of the storm passed over the island of Saint Martin/Sint Maarten on September 6, 2017. On Sint Maarten, the loss of

life was limited to 2 persons, however, the material damage, which is still being assessed, is expected to be US$1,8 billion. Based on information derived from various damage assessment reports, 90% of the

infrastructure on the island was damaged by the storm. Sint Maarten’s environment will need years to recover from the storm damage. Beyond the loss of life and destruction of structures, the catastrophe caused by

hurricane Irma has resulted in major societal upheaval.

1.2 The Response

In the immediate aftermath of the storm, emergency humanitarian support

and aid was rendered to both residents and visitors. At the time of this writing, the emergency response is winding down. Thereafter the recovery will take on a more programmatic approach both in terms of planning and

coordination. Restoration of affected sectors of the island will occur in phases; from short-, medium- to long-term. To address the need for a comprehensive plan for the recovery, a working group was established, by

national decree, on September 14, 2017. This work group was given the task of drafting a National Recovery Plan.

Members of the work group National Recovery Plan (hereafter: W-NRP) are:

• Joane Dovale-Meit, chair

• Dennis L. Richardson, vice chair • Cassandra Janssen, secretary • Makini Persaud-Hickinson, member

• Fernando William, member • Jan Beaujon, member

1.3 The approach

On September 20, 2017, the Council of Ministers, approved the plan of approach outlining the vision, principles, framework and timeline developed by the W-NRP. The document before you, represents the interim report

from the work group, that is based on the plan of approach. The interim NRP was developed using the best information available (damage

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assessments), as well as input from a broad range of stakeholders. A provisional estimate of the damage per sector, is presented in this report.

Additionally, the report provides an analysis of the economic impact expected due to the loss of the country’s main business activities and infrastructure. Actions required for business recovery, as well as the social

initiatives necessary for the recovery of the community are outlined in chapters five and six of the interim report. The need for institutional strengthening and capacity building is discussed in the section on

government recovery, chapter 7. We conclude the interim report with recommendations.

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2. National Recovery Program

2.1 Strategy

Considering the unprecedented material damage caused by the passage of hurricane Irma, Sint Maarten is confronted with a herculean task of reconstruction and recovery. “Reconstruction” focuses primarily on the

construction or replacement of damaged physical structures, and the restoration of critical infrastructure. “Recovery” in the context of National Recovery Plan is defined as the restoration, and where appropriate,

improvement of facilities, infrastructure, livelihoods, and living conditions of the Sint Maarten community.

2.1.1 Vision

From a strategic and policy standpoint, government has developed a central vision for the recovery. Government seeks to act swiftly and accelerate the restoration of the social and economic infrastructure using the NRP as a

roadmap for sustainable recovery. The NRP therefore includes input from stakeholders.

Government’s vision is for a better and stronger Sint Maarten.

With the NRP, government conveys its priorities to stakeholders (public and

partners), and in so doing, builds consensus for the implementation of the initiatives derived from the plan. Devastation on the scale caused by a category 5 hurricane, must be matched by an equally robust reconstruction

effort that includes government, citizens, business, government and community partners, international organizations (NGO’s etc.), and the Netherlands.

2.1.2 Principles

Sint Maarten’s NRP adheres to the principle of Build Back Better. This principle goes beyond simply reinstating what the storm destroyed, but

instead seeks to improve the community and achieve a recovery that is better, fairer, stronger and more resilient than the situation before the disaster. This concept has been advocated in many other disasters,

including hurricane Katrina in the United States in 2005, and the Haiti earthquake of 2010.

While disasters provide opportunities for change, recovery efforts cannot address every challenge within a community. So too, the NRP does not pretend to provide answers for every perceived problem facing Sint

Maarten,

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pre- or post-Irma. Instead, the NRP seeks to set priorities which relate to interconnected focal areas; business restoration, community recovery, and

strengthening of government. Given the island’s reliance on tourism and related economic activities, swift

restoration of business activity is a priority. Restoration of business will support the return of the social order on the island as well. Besides the catastrophic material impact, the storm has caused significant emotional

stress and social disruption among the residents of the island.

2.2 Recovery Cycle

The National Recovery Plan (NRP) provides a comprehensive framework for

public and private sector to recover from the social and economic impact of hurricane Irma. The NRP provides guidance to government and stakeholders on Sint Maarten (business and social) regarding the roles and

tasks each will fulfill for short-, medium- and long-term recovery. In addition, the NRP outlines measures and initiatives that government will undertake to support the return of a robust economy, equitable social

services, and a resilient infrastructure. Successful recovery is a cumulative process. It is therefore imperative that

certain basic requirements are met and maintained to allow progression of the recovery cycle.

2.3 Funding/financing for recovery

2.3.1 Budget analysis

The private sector will use a combination of insurance proceeds and financing to invest in the reconstruction and renewal of their infrastructure, facilities and obligations to employees. The recovery plan makes use of

preliminary estimates. Government’s budget, already sparse, is projected to be insufficient to

cover the immediate emergency and clean-up costs. The additional budget expenditure along with the loss of tax revenue is projected to result in a budget deficit of NAf 156 million in 2017. The deficit for fiscal year 2018

will be higher (see section 4.6). Budget support must be arranged. Cost-cutting measures, if possible in some areas, will certainly not bridge the gap created by the loss of income due to reduced economic activity.

Moreover, additional initiatives to shore up the competitive position of the destination for the 2018-2019 tourism season are needed. Tourism marketing must increase beyond what is traditionally budgeted. The

lessons of hurricane Luis can serve as a guide in this regard. Sint Maarten’s success in maintaining and growing tourism market share after hurricane Luis, proves the viability of establishing special marketing funds.

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2.3.2 Sources

The Dutch government has committed itself to help Sint Maarten. As a part of the Kingdom, Sint Maarten has thus far received emergency aid, material and technical support to deal with the crisis immediately after the passage

of the storm. Recovery and reconstruction, guided by the principle of ‘build back better’,

is going to be a costly process, requiring hundreds of millions of Guilders. A reconstruction fund is being debated in The Hague. While the size of the fund remains unknown, the Dutch government is acutely aware of the

island’s needs. Representatives of the Ministries of Defense and Interior Affairs and Kingdom Relations have been on the ground almost from the beginning and have assisted in assessing the damage and needs.

It is also clear that the reconstruction funding will be subject to certain conditions and requirements. The Hague wishes to guarantee that the

financial support provided, is effectively and efficiently deployed to the areas of greatest need. However, it is equally evident that success requires that Dutch funding remain aligned with locally identified priorities.

Funding from the European Union and the United Nations is possible. In fact, the Kingdom government has made appeals on behalf of Sint Maarten

for assistance. The damage is immense and a swift recovery is necessary for the economic resilience of the community.

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3. Consultations

To develop the NRP, initial damage assessment reports are being supplemented with information from stakeholders. The W-NRP met with a variety of stakeholders. Consultations will continue after presentation of the

interim report. The stakeholders who have met with or contributed information to the W-NRP to date include:

• The Governor • Council of Ministers

• Ministry: - Minister General Affairs, - Minister of Education, Culture, Youth and Sports Affairs

- Minister of Minister of Public Housing, Spatial Planning, Environment and Infrastructure

- Minister of Finance

- Minister of Justice - Minister of Health Care, Social and Labor - Minister of Tourism, Economic Affairs, Transport and

Telecommunications

• Dutch Civil Mission

• Government-owned Companies:

- NV GEBE

- TelEm - Harbour Group of Companies - Princess Juliana International Airport

- Windward Island Airways N.V.

• Government Departments:

- Interior Affairs and Kingdom Relations (BAK)

• Sociale Ziektekosten Verzekering (SZV)

• Central Bank of Curaçao and Sint Maarten (CBCS) • General Pension Fund (APS)

• Private Sector: - The Sint Maarten Hospitality Trade Association (SHTA) - Merchants of Frontstreet and Backstreet

- Marine Sector representatives - Banker’s Association - Various Business owners

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- Sint Maarten Insurance Brokers Association - American University Caribbean (AUC)

- Unleashed Potential Group (UPG) - United Telecommucation Service (UTS)

• Law enforcement: - Koninklijke Marechaussee - Police Corps Sint Maarten

• Community:

- The Nature Foundation

- Community Councils of: o Point Blanche o Belvedere

o Saunders o Dutch Quarter

• International organizations: - Samaritan’s Purse - Economic Commission for the Caribbean and Latin America

(ECLAC) - United Nations Development Programme (UNDP)

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4. Post storm analysis

4.1 The new normal

Sint Maarten is situated in the hurricane belt. There have always been hurricanes and though they would exist without climate change, models developed by climate scientists indicate that storms are bigger and

stronger, and are going to get bigger.1 While some of the lessons learned from the last catastrophic storm in 1995 have borne fruit, for example a more rapid restoration of electrical service due to underground distribution

networks, the island’s infrastructure and facilities must achieve a higher level of resistance and sustainability to deal with the new era of category 5+ storms.

4.2 Economy pre-Irma

To place the impact of hurricane Irma in the proper perspective, a brief review of the economy of the island is useful.

In general, it can be stated that the economic performance of Sint Maarten in comparison to the region, while not stellar, was reasonable.

Sint Maarten’s economy is primarily service based. Tourism is the main economic driver, accounting for an estimated 80% of the economy. Approximately four-fifths of the labor force is engaged either directly or

indirectly in this sector. Sint Maarten has limited agriculture or fishing activity and diversification of the economy occurs primarily within the hospitality and tourism segment.

The Department of Statistics’ preliminary estimate of real growth for 2016 is 0.4%. In 2015, the real growth estimate was 0.5%. In nominal terms,

economic activities expanded from NAf 1,909 million in 2015 to NAf 1,919 million in 2016. Performance across industries show mixed results with ‘Hotels & Restaurants’ and ‘Transport, Storage & Communications’ leading

the increase in gross value added by 3.7% and 1.4% respectively. However, other major industries such as Trade (-0.2%), Construction (-3.2%) and Real Estate, Renting and Business activities (- 0.1%), all

experienced a reduction in gross value added during 2016. In terms of tourism, 1.7 million visitors arrived via cruise ship, with

approximately 500,000 tourists arriving via the Princess Juliana

1 Anthropogenic warming by the end of the 21st century will likely cause tropical cyclones globally to be more intense on average (by 2 to 11% according to model projections for an IPCC A1B scenario). This change would imply an even

larger percentage increase in the destructive potential per storm, assuming no reduction in storm size. Summary Statement, NOAA, August 2017.

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International Airport in 2016.2 In that period, stay-over visitors rose 4.5% as compared to 2015. The stay-over segment of tourism is supported by

hotel, timeshare and rental properties. Average occupancy for 2016 was approximately 70%. A decline of 18% in stay-over tourism is projected for 2017.

Cruise tourism represents more than half of the total visitor arrivals to the island. For 2017, the cruise segment is projected to decline by 27%

equivalent to 1.2 million cruise passengers. The decline is primarily due to lost cruise calls to the island following hurricane Irma.

A bright spot for the economy has been the yachting sector, which in recent years has become an important contributor overall. The Central Bank of Curaçao and Sint Maarten reports that for 2016 “the manufacturing sector

was supported by a marked increase in yacht repair activities due to more yachts, notably mega-yachts visiting the port of Sint Maarten”.3

Looking at employment, surveys of the labor market suggest an unemployment rate in January 2017 of 6.2%, though the youth unemployment figures remain high (23.8%).4

The performance of the government also was showing signs of modest improvement pre-Irma. Based on unaudited financial statements for fiscal

year 2016, the public sector reported a surplus of NAf 26 million. This is in comparison to deficits in previous years. For 2017, the Ministry of Finance also anticipated a modest positive result, though the fourth Quarter results

will be impacted by the loss of economic activity and increased public expenditure in support of the relief and response. Public debt in relation to GDP stood at 34.3% at the end of 2016.

4.3 Post disaster damage and needs assessment

The following information is compiled from numerous sources based on several initial assessment reports as well as from direct consultation with

stakeholders. Where possible, specific needs have been included, however, in most instances damage assessments have not yet been finalized.

4.3.1 Utilities and Fuel

Shortly following the passage of hurricane Irma, it was clear that the water

and electrical distribution infrastructure of NV GEBE, was damaged. Water supply was available to approximately 50% of the company’s connections due to damage to several of the 15 water storage tanks. These tanks are

essential elements of the distribution grid.

2 Department of Statistics, 2016 data, September 2017. 3 Annual Report 2016, Central Bank of Curaçao and Sint Maarten, 2017. 4 Department of Statistics, January 2017.

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The water production plant remained mostly intact, however, distribution to districts was impacted due to broken and damaged water pipes. Interim

solutions for providing households with water included distribution by water trucks within neighborhoods, use of wells across the island, and cisterns located on private properties.

NV GEBE’s water distribution has been partially restored but due to damage to storage tanks as well as the distribution network, the quality of the water cannot be assured. Contamination of the water is being temporarily

resolved by means of portable osmosis units, with a daily production capacity of 60,000 liters of potable water.

Even though 80% of the electrical distribution network on Sint Maarten is underground, approximately 40% of the electrical distribution was impacted because of severed high voltage power cables in various districts,

and damage to the overhead distribution lines between homes and the underground network. At this writing, approximately 50% of electrical connections have been restored.

Needs

▪ More storm-resistant water distribution network

▪ Improved roofing structure at the power production plant ▪ Completion of 100% underground electrical distribution network ▪ Replace meters with protected, storm resistant systems

The two main wholesalers of petroleum products on the island, Sol and Texaco, suffered minimal damage to their storage tanks. However, many

of the retail outlets sustained damage to fuel pumps and facilities. About half of the 10 retail stations are currently operating on a limited basis.

4.3.2 Sea and Air Ports

The Port of St. Maarten sustained damage to both its cruise and cargo infrastructure. The older of two cruise piers (South), built in 1999-2000, received damage to the concrete deck. Large concrete sections gave way,

leaving steel exposed with disconnected deck section. The North pier, constructed in 2008-2009, was not impacted. The perimeter fence, passenger screening kiosks, pier light poles and Harbour Point Village, also

sustained damage. The destruction caused a temporary closure of the cruise facility and diversion of scheduled cruise liners. The return of cruise tourism, albeit at a reduced rate, is set for November 11, 2017.

The impact on cargo operations includes damage to the two mobile cranes (newer model 6 and older model 4), and the weigh bridge. The roof of the

cargo terminal offices was destroyed. Despite the damage, the cargo section is partially functional and has re-opened for commercial operations.

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Needs

▪ Short term repairs to concrete deck of Cruise Pier South

▪ Strengthening of the piers against future natural disasters ▪ Reconstruction and repair of other facilities: home porting terminal,

weigh bridge, erosion at interisland section dock, Simpson Bay

Causeway and Simpson Bay Bridge ▪ Waiving or delay of concession fee payment

The Princess Juliana International airport sustained damage. The estimate of damage is significant. Approximately 75% of the roof sheeting and insulation was destroyed. Water entered all levels of the building. The

runway is intact, though a return to normal operations was hampered due to damage of support mechanisms such as the air traffic control facility (ATC), the terminal building with its numerous functions, the perimeter

fence and the runway lighting. The airport management requested an advance of US$ 10 million in insurance payments to address immediate repairs.

At the time of this interim report, air traffic remains limited to military and relief flights. Commercial flights will commence on October 10th.

Restoration of services will occur in stages. Based on tourist arrival figures for the first eight months of the year, a reduction of 18% in arrivals is projected for 2017.

Needs

▪ Restoration of the aerodrome perimeter fence

▪ Short term and structural repair to roof of terminal building ▪ Purchase and replacement of critical operational systems ▪ Financial restoration plan to substantiate financial viability

▪ Restoration of PJIA air and commercial operations to 100% capacity ▪ Introduce the US pre-clearance facility in the reconstruction

4.3.3 Construction

The construction sector will probably be a beneficiary of the storm.

Wholesalers of building materials weathered the storm reasonably well and there is sufficient inventory on island to allow initial reconstruction activities. Large equipment operators reported losses. Supplemental heavy

equipment is included in the emergency support from the Netherlands to be used by government.

Needs ▪ Reconstruction of retail facilities ▪ Replacement of commercial heavy equipment

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4.3.4 Wholesale and Retail Trade

The major food wholesalers and retailers were impacted by the storm and several were also looted in the aftermath. Three of the largest supermarkets are out of service. Smaller outlets and the remaining

supermarkets are presently open for business. The return of cargo operations ensures a supply of goods to these outlets.

Retail outlets on Frontstreet and Backstreet are slowly returning their businesses to normal operations. Restoration of service was hampered by storm damage, repeated looting and the resulting loss of inventory, as well

as delays in the restoration of utilities. Cleanup of the surrounding areas remains a concern as is security considering the looting and sporadic break-ins.

The Simpsonbay and Colebay retail areas are slowly returning to normal operations.

Companies with multiple outlets on the island have maintained staffing levels (under modified conditions with adverse economic impact) despite damage at various locations. Up to 25% of staff may be displaced

temporarily during reconstruction in the mid-term. Needs

▪ Reconstruction of damaged facilities ▪ Stable utilities ▪ Security

4.3.5 Hotels, Restaurants, Marine Sector

Comprehensive damage and needs assessments are still being conducted

for this sector. Preliminary information on 35 properties suggests approximately 803 rooms of 3,720 assessed are ‘livable’. On average, small guest houses and hotels fared better than the larger properties.

Reconstruction of the larger properties can be a lengthy process and must include improvements to survive category 5 storms. The number of villa’s

and private apartments that are available for habitation is currently unknown, though information from the real estate sector suggests that very

little inventory is available prior to the end of the year. Most properties are maintaining employees; as of the week of September

25, 2017, a 12% displacement of the employees of the surveyed properties was projected. However, more layoffs are likely by year-end. The Sint Maarten Hotel & Trade Association (SHTA) has proposed use of tax

incentives and/or subsidies to support a rapid return to service for the hotels, as well as subsidies to support employee retention.

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Needs

▪ Completion of damage assessment

▪ Cleanup of the immediate surroundings ▪ Insurance proceeds ▪ Availability of qualified contractors and construction professionals

▪ Reduced bureaucracy for processing construction plans and inspections

▪ Fiscal incentives

Restaurants, particularly those catering to the local market are slowly returning to service. At the time of writing of this interim report, exact

estimates of the number of food and beverage establishments on the island that are open to customers remain unknown.

Needs ▪ Completion of damage assessment ▪ Reconstruction of facilities

▪ Utilities The marine sector is actively pursuing a limited return to service in

November. Early indications are that clients of the marine sector have no plans to abandon the region despite number of storm-affected islands. Representative of the Sint Maarten Marine Trade Association (SMMTA) have

reported that their members are marketing the destination at a premiere trade show in Monaco. The annual Ft. Lauderdale Boat show, November 1-5, will also feature the island. A decisive factor for the interest in the island

is the notification that St. Barths will be accepting visitors in November. Of the 200 boat slips for larger yachts that were available pre-Irma, 40-50

will be made ready for yachts in time for November 2017. The marina’s will work on restoring facilities and provide amenities for crews and guests. The retail side of the marine sector is open for business, albeit on a limited basis

because power had, at the time of this writing, not yet been restored to their location in Simpsonbay. This sector is very competitive and based on the anticipated amount of repair and salvage work, the two major retailers

(employing approximately 90 persons) are eager to resume normal operations.

Salvage work needs to start as soon as possible to facilitate a successful yachting season. The SMMTA are very resilient and expect to be able to manage the recovery of their sector without financial support from

government. There is potential for employment growth in the sector as result of the anticipated salvage and repair work.

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Needs

• Access to the destination

• Communication to international stakeholders • Facilitation of salvage operations (allow entry of salvage crews and

equipment)

• Cooperation with Simpsonbay Lagoon Authority Corporation (SLAC) to execute a bathymetric survey lagoon

• Completion of the crew visa regulation policy

4.3.6 Telecommunications & Post

The two major telecommunication companies, the TELEM Group and UTS, suffered significant damage to their mobile telecommunication infrastructure and distribution networks. Of note is the destruction of

towers previously thought to be hurricane resistant. TELEM estimates the losses to the mobile network at NAf 8 million. Co-location of communication equipment is common; hence the loss of a single tower can affect multiple

operators. Remote sites, if not damaged, were temporarily out of service due to the loss of power. Service has been restored to approximately 65% of the island, though coverage remains spotty. The landline infrastructure

of TELEM is mostly intact given that it is situated primarily underground. Some damage, estimated at NAf 1,8 million, to the fixed distribution network relates to the overhead wires and poles in certain areas.

UTS reports that 55% of their customer base is reconnected. Customers on the 2G network are being encouraged to move to 3G given that

reconstruction of the older technology will not be done. Total damage to buildings and equipment is preliminarily estimated at US$35-40 million. Investment in improvement of the network is not yet known. Portable

generators are being used to support service continuity (30%). Needs

▪ Reconstruction of damaged buildings ▪ Restoration and replacement of transmission equipment ▪ Restoration of overhead distribution network

▪ On the long term, the distribution network needs to be more resilient ▪ Redundancy in the distribution network

Radio stations on the island sustained damage to the transmission networks but a few also had to deal with physical damage to production and broadcast locations. All main stations are back on the air. The emergency

station of government remains out of service at the time of this report. The Post N.V. headquarters is damaged including collapsed main walls. Post NV headquarters were looted. The postal service is not yet restored.

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Needs

▪ Repair and reconstruction of physical facilities

▪ Reconstruction of storm resistant distribution and transmission infrastructure (towers etc.)

▪ Cooperation agreements between broadcasters and government

during storms to improve communication and coordination efforts

4.3.7 Transportation

Windward Island Airways (Winair) is still completing the damage

assessment of the airline’s physical facilities. While the aircraft were repositioned to escape the storm, the headquarters and technical (hangar) buildings are very badly damaged. So much so that the airline has decided

to permanently relocate the main offices to the Philipsburg area. Temporary repairs to the technical building are being carried out to be able to meet maintenance requirements for the aircraft.

The fleet of DHC-6 Twin Otter aircraft were temporarily based on the neighboring island of St. Kitts, but recently returned to Sint Maarten.

Going forward, Winair expects to right-size the company in an effort to deal with the loss of operations and revenue. The number of employees and the size of the fleet will be affected. The most profitable destination for the

airline is St. Barths. Despite information that St. Barths intends to open for the upcoming tourism season, Winair anticipates a loss of their airline connection business for US and European visitors through Sint Maarten to

St. Barths. Winair has already adjusted their flight schedules to serve the core destinations which include St. Kitts, Saba, St. Eustatius, St. Barths and Antigua. Once the Princess Juliana International Airport resumes

commercial operations, the schedule will be activated. Adjustments will be made as conditions demand. In the interim, Winair is arranging charters and humanitarian flights to

Curaçao and other islands on a demand basis. Needs

▪ Winair needs passengers: opening of the airspace and airport are critical success factors

▪ Repair of technical building (hangar)

▪ Financial support for the fleet renewal to reduce costs ▪ Achievement of Category I status for the airport to enhance interline

agreements and connection business

Despite projected loss of air carrier frequency to the island, several airlines have indicated their intention to return to a limited schedule as of

October (JetBlue, mid-October and KLM at the end of October). Spirit and

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Caribbean Airlines are willing to commence service immediately. American Airlines and Delta suspended flights but may resume in Q4.

The public transportation system consisting of privately owned mini-buses is under assessment. As private owner/operators of the buses, recovery

will be dependent on the speed upon which repair work can be carried out. This in turn is dependent on the speed of the insurance claim and payment process. In the interim, transportation is available

The Dutch St. Maarten Tax Association report that 75% of their taxi drivers were affected by hurricane Irma. This can impact the cruise tourism.

Needs

▪ Potentially, financing via SME-programs to return vehicles to

operation.

4.3.8 Financial Sector

In the commercial banking segment, most banks have only resumed

operations of at least one branch office due to security concerns. The larger institutions have returned some ATM’s to service. Banks have reported damage to physical structures.

At the time of this interim report, there are no reports of cash shortages on the island. Banks are however primarily disbursing funds in Guilders, and

limits were initially placed on daily withdrawals.5 Initial assessments are ongoing regarding clients’ ability to maintain their

loan obligations during the recovery phases. Two banks provided a zero-interest grace period on personal loans (including mortgages) for up to six months, which will assist residents as they work on the restoration of their

assets. Other banks have offered similar facilities for shorter durations. Business customers are generally offered a shorter grace period for debt service, though in these cases interest will accrue.

A risk for this sector involves an increase in delinquent accounts due to individuals and/or businesses who choose to leave the island without proper

settlement of outstanding loans. This will obviously hurt the profitability outlook of the island’s financial institutions. Other concerns for the sector include the ability to support the recovery with financing, particularly given

the prospect of reduced deposits because of an increased drawdown on available savings and the uncertainty regarding the recovery of the tourism economy. Moreover, losses due to write-offs as a result of a higher level of

delinquent or non-performing loans will negatively affect banks’ capital.

5 Initially NAf 1,000 later adjusted upwards to NAf 5,000 per day. ATM’s were limited to NAf 1,000 per day. Limits have since been removed.

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Needs

▪ Repair and reconstruction of physical facilities

▪ Capital support funds to shore up capital bases and offer loans to those in need

▪ Review of Central Bank policies considering the specific situation on

Sint Maarten It is important that the public is educated regarding their rights and

obligations related to insurance policies and procedures. Insurance companies, from the onset, informed the public that all claims will be honored. Insurance disbursements will be critical for the revival of the

economy, as these funds will be required by citizens and businesses alike to begin the reconstruction process. The insured are completing the claims process to insurance companies, and evaluations of these have begun. The

sooner the country can access insurance funds, the sooner society will return to normalcy. Moreover, once insurance funds are received, people can be put to work in the construction industry and other employees will

be closer to returning to their reconstructed places of work. The size of the insured portfolio on the island is estimated at NAf 2,25 billion

(US$ 1,25 billion). The information is extrapolated from information received from various insurance institutions on the island. The insurance includes personal (vehicle and home), as well as commercial insurance

(damage, theft, business interruption). It is believed that large hotels, among others, have insured against loss with internationally based insurers. In the following table, we provide estimates of the insurance

reimbursements (expressed in United States Dollars)6. We anticipate a reimbursement rate of 65%.

The insured value of the asset class is also shown. Business represents the largest asset class and will likely generate the largest insurance payments based on damage claims.

Amount (US$) Estimated

Reimbursement Insured Value

Residential Homes 200 350

Businesses 550 850

Vehicles 35 50

Total amount 785 1,250

6 Based on a survey conducted by Consumer Reports, insurers reimbursed clients for 80 percent of their losses from

Katrina but for only 71 percent of losses from Sandy. Consumer Reports, March 2014.

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4.4 Economic impact analysis

The insured material damage incurred is not yet known, but the Central Bank of Curaçao and Sint Maarten has developed the following loss scenarios:

• Extreme scenario – 35% loss rate ratio with damage of US$4 billion • Medium scenario – US$2,5 billion • Low scenario – US$1,2 billion

At US$ 1,8 billion, the W-NRP’s estimate lies between the low- and the medium scenario or damage losses. In cooperation with the Central Bank,

the W-NRP is working to develop economic impact analysis based on the scenarios mentioned above. Additional economic impact analyses will be conducted by ECLAC. In the interim, an estimate of the economic impact

can be derived from historical data, i.e. hurricane Luis. The loss of economic activity after Luis was approximately 20%. Given the

growth of the tourism sector over the last 22 years and the damage to the tourism infrastructure caused by Irma, particularly to the large hotels and the airport, losses will likely exceed that of Luis. In addition, full

recovery will take more time, most likely 24-36 months. The loss of foreign exchange revenues is estimated at 3%. Based on

historical data, foreign exchange income declined by 2% in 1996 following hurricane Luis. Given the loss of the hotel inventory, post-Irma losses are likely to be higher. A rebound due to the inflow of insurance funds is

probable. Post-Luis, it was almost 13%. The W-NRP conservatively estimates the inflow at 15%.

The distribution facilities of the island were not all destroyed. For example, roads were not badly damaged and the cargo port is already back in operation. However, the scope of the disaster and the required

reconstruction response, means that there will be increased competition for the available goods, making inflation a likely outcome.

Labor market conditions will be affected due to the loss of the major employers, i.e. hotels, though for the near term, no massive lay-offs have been reported. This situation will change depending on the length of time

required to return the larger employers to full operations (hotels etc.). After Luis, registered employment was anticipated to decline by 15%. A 1997 Labor Force Survey conducted on Sint Maarten shows a substantial increase

in the unemployment rate, to 17.2%, in the post-hurricane Luis period. The extent of the loss of employment will likely become evident in 2018.

Data related to expected unemployment and revenue loss, per sector, is being gathered to develop economic projections for 2017 and 2018.

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The SZV is anticipating a dramatic increase in cessantia claims due to business closure. According to SZV, the fund’s reserves might not be

enough to cover these benefits. In the year 2013, claims paid to former pelican resort employees and some other businesses totaled NAf 1,8 million. SZV estimates that requests for cessantia could be as high as 20

to 35 times that amount.

4.5 Social impact analysis

The Sint Maarten Medical Center was damaged by the storm but is functioning again after temporary repairs were done to the roof of the

building. General Practitioners and pharmacies have re-opened, albeit with limited hours. Dialysis patients were evacuated along with other critical care patients due to the situation at the hospital. The SZV is reviewing

possibilities to return some of these patients to the island. The determination will be done on a case by case basis given that some

patients’ personal situations (damage to home) may not make return medically feasible.

Damage estimates for the SMMC are not yet available. Needs

▪ Repair and reconstruction of physical facilities. ▪ Review of the plans and financing of the new medical center ▪ Technical and financial support to expand the number of specialties

Schools also must deal with storm damage in varying degrees. The Ministry of Education has initiated temporary repairs with the aid of Dutch aid

workers and military engineers. In the four weeks since the storm, some progress has been made in restoring the educational sector.

For example, 95% of the primary schools can restart with the pre-exam and exam classes, six primary schools can restart all classes and three

schools (CBA, Sundial, and SML) are seeking alternative spaces, though agreements are made with CBA and USM to share classrooms. In addition, SML will share with sister schools in SKOS, NIPA and Sundial with kitchen

and restaurant facilities.

The restoration of education is impacted by the following:

- Most schools have electricity and water (was: 70% electricity, 45% water)

- 15% of the teachers left the island (comment: preliminary

estimates), and 20% of the teachers that left are willing to return

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to Sint Maarten once conditions improve. Sufficient teachers are available to re-start pre-exam and exam classes

- 30% of the teachers’ homes suffered serious damage, 50 teachers require temporary housing

- Preliminary numbers estimate that 450 students left the island

A soft opening of a limited number of schools occurred in the week of September 25, with exam classes resuming on October 2. Temporary

classrooms were made available by the Netherlands, as was school materials for the curriculum.

Damage assessment for schools is ongoing. Needs

▪ Repair and reconstruction of physical facilities ▪ Financing for construction of multi-function facilities ▪ Transformation to ‘digital’ and ‘connected’ classrooms

A survey of eight sport facilities was executed by government and the National Sport Institute. The assessment shows:

- All open area/fields are damaged (fencing, light poles, fields); - Six sport facilities have serious structural damage

- Four sports facilities have damaged material/furniture

- One sport facility has flooding damage.

The Raoul Illidge Sport Complex, a recent developed multi-sports facility area, suffered damage to all sports facilities.

Needs

▪ Repair and reconstruction of physical facilities

▪ Financing options to support construction Childcare facilities were assessed by government (including inspectorates)

and Stichting Early Childhood Development Association (SECDA). The team surveyed thirty daycare facilities in the districts Philipsburg, Sucker Garden, Dutch Quarter, Cay Hill, South Reward, St. Peters, Colebay

and Simpsonbay. According to the latest available census data, 84.2% of 1,073 children (0-4 years old) attend pre-school five days a week. The results of the assessment indicate that:

- An estimated capacity 700 children at the daycare facilities; - All thirty centers suffered damage of varying degree;

- Fourteen centers are ready to operate;

- Five centers are non-operational;

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- Eleven centers need repair.

Besides the physical facilities, basic requirements (utilities etc.) must be in place to allow the centers to function as a safe facility where the health and well-being of the children can be guaranteed.

Needs ▪ Repair and reconstruction of physical facilities ▪ Availability of temporary facilities for daycare services

Community centers and churches have sustained varying amount of storm damage. Assessment activities are ongoing. Limited use of the facilities is

possible. The most dramatic social impact relates to the loss of residential structures.

According to the initial assessments, over 11,000 persons have damage to their homes requiring significant reconstruction or repair. The Sint Maarten Housing Development Foundation reports that 2,200 persons have

registered for housing. There are no persons in shelters. Residents without homes have started temporary repairs or found shelter with family or friends. A temporary solution for the homeless is being prepared by the

Dutch military in collaboration with VROMI. A more detailed assessment is necessary to determine the scope of the

housing solution necessary for the recovery. Needs

▪ Emergency home solutions ▪ Technical assistance to develop a detailed assessment of housing

needs on the island

▪ Evaluation of building code suitability for category 5+ hurricanes Sint Maarten’s environment was severely impacted by hurricane Irma. Most

large trees, some with historical and cultural significance, were toppled. The once green landscapes were defoliated, though some growth is slowly returning to the island. Bird nesting sites monitored by the Nature

Foundation for the Brown Pelican, Sint Maarten’s National Bird, have been decimated and recovery will take some time. The Nature Foundation estimates that 90% of the island’s mature mangroves have been destroyed.

Based on information from various sources, an estimated 120 vessels floundered and must be salvaged as soon as possible because fuel spilled

in the Simpson Bay Lagoon and in the Oyster Pond wetlands. Estimated fuel spilled in the Simpson Bay Lagoon exceeds 100,000 gallons.

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Because of run-off from the hills, the quality of the water at beaches has been reduced. In addition, the beaches have been eroded. Although coral

reef assessments have not yet been carried out, damage is expected to be extensive and significant. The Pond Island landfill, already at capacity prior to the storm, will likely grow thus increasing the amount of solid waste.

Needs

▪ Beach restoration

▪ Cleanup / salvage of sunken vessels ▪ Technical assistance to restore the Nature Foundations facilities,

such as moorings, hydrophone transmitter arrays.

Cultural objects were affected by the storm. The rapid assessment for nine monuments was executed by government, the Monument Council and

UNESCO. Of the monuments assessed thus far are:

• All monuments have flood damage, and five monuments received structural damage;

▪ One monument was destroyed;

• Three monuments sustained moderate damage related to roof capping, columns, windows, molding shutters, wall damage, floor and mold;

• Two monuments sustained severe damage such as loss of roof, floor and walls damaged, mold, termites, fencing, banisters, tiles;

• One monument sustained minor damage e.g. light damage to roof

capping, front wall and stairs; • Six of the monuments were not insured, only one government

property (school) was insured. Of the six uninsured buildings, three

are residential homes of which two in private ownership and one is of unknown ownership. The remaining buildings indicate private ownership.

Additionally, the FOGA and courthouse have been assessed; these are the only government-owned monuments. FOGA received no damage from

Irma, whereas the courthouse, as a functioning government monument, is in urgent need of repairs as it sustained severe damage.

The Methodist church received minor damage, and is insured. The statues (roundabouts) will be assessed by the Ministry of VROMI but there is visible damage.Further assessments for the cultural facilities such as the cultural

centers, the library and Sint Maarten Archeological Center (SIMARC) are ongoing, but all have sustained substantial damage. A location is needed for heritage artifacts at SIMARC.

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In the aftermath of the storm, various neighborhoods organized and coordinated efforts to support and aid residents. The distribution of

humanitarian aid was assisted by these community efforts. Needs

▪ Completion of a detailed assessment and analysis of damage and restoration needs

▪ Repair and reconstruction of monuments, particularly those used for

essential services Security and safety is a recurring theme during discussions with

stakeholders. This is partly due to the incidents of looting directly following the passage of the storm. Moreover, though the restoration of utilities is underway, the nightly curfew is an effective measure to counter criminal

opportunists. The Police (KPSM), supported by law enforcement officers from other parts of the Kingdom have been effective in maintaining public order. This despite significant damage to their facilities, including the police

headquarters, Custom’s offices, Criminal Intelligence Department and the detention facilities.

The prison sustained structural damage that has affected security systems. The facility was already compromised and based on damage from the storm, the prison needs to be replaced.

Needs

▪ Augment manpower from law enforcement agencies of the partners

in the Kingdom ▪ Repair and reconstruction of facilities ▪ Replacement of the Prison

▪ Training of additional justice personnel

4.6 Financial impact analysis (national budgets)

Even as hurricane Irma approached Sint Maarten, it was evident that the

budget for fiscal year 2017 and the draft budget for 2018, would need to be adjusted. The Ministry of Finance is, at the time of this writing, reviewing the impact of the emergency and recovery effort on the budgets.

In the budget for fiscal year 2017, government projected income of NAf 478 million. As of July 31, 2017, the realized income for 2017 was

approximately NAf 306 million. Estimates for third quarter (Q3) income is NAf 324,430,106. In other words, after three fiscal quarters, 67% of the budgeted income is estimated to have been realized. Based on the situation

post-Irma, and income projections income from the Ministry of Finance, Q4 income will amount to approximately NAf 26 million.

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In other words, the ministry expects a revenue shortfall of NAf 128 million for 2017.

Moreover, while actual expenditure for the first two quarters are known, the ministry can only provide expenditure projections until the end of the

year.

In millions NAf

Budget 2017 478,101,671

Est. actual income per Aug 31 324,430,106

Est. income Sep-Dec 26,000,000

Income shortfall 2017 128,111,565

Extra expenditure due to IRMA 28,000,000

Budget shortfall 156,111,565

Projections for fiscal years 2018 and 2019 have been developed based on preliminary estimates.

For the first quarter of 2018, income is expected to be 60% lower than normal, with the situation slowly improving over the year. By year end, the income should improve to a level 40% lower than normal. Revenue

generated from stay-over related taxes are expected to be more depressed. Most of the new income generating measures planned for fiscal year 2018 have been scrapped. Concomitantly, the ministry projects an additional NAf

20 million in expenditures. Income for fiscal year 2019 is also expected to be lower than originally

projected, with an additional NAf 14 million in expenditures expected.

In millions NAf 2017 2018 2019

Income

Originally budgeted 478 484 484

Post-Irma 350 248 265

(128) (236) (219)

Expenditure

Originally budgeted 458 460 460

Post –Irma 486 480 474

(28) (20) (14)

Shortfall (156) (256) (233)

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5. Business Recovery

Full recovery of the tourism product is estimated to take up to two years, possibly more. However, such a lengthy process comes with serious economic and social consequences, among which are loss of market share,

a prolonged period of substandard employment, budgetary deficits that can become structural, increased poverty and the accompanying security issues, which can have an adverse effect on economic recovery. In other

words, a downward spiral. The W-NRP contends that such a scenario is unacceptable and to allow it to occur is equally untenable, especially if it can be prevented.

5.1 Sustainable economic development

The W-NRP recommends that recovery activities commence as soon as possible. However, we are cognizant of the fact that the task is immense.

Most journeys are taken one step at a time, and Sint Maarten will embark on a phased recovery. We support an effort that will allow whatever economic activity that can rebound quickly to do so. To achieve a common

goal of recovery, projects that galvanize stakeholders and others into rapid and effective action, are preferred. Business recovery deserves a high priority because a functioning economy will mitigate the negative impact of

the storm’s damage, and at the same time, incentivizes further growth. At the same time, the work group does not support a reckless surge

forward. Rather, we are of the opinion, that the principle of ‘build back better’ should be the leitmotiv of all recovery efforts. Economic development must be sustainable beyond the period of recovery.

First, we present actions to start the process. Thereafter, initiatives for the mid- and long-term that support sustainability, such as the NTO and the

ERF, are discussed.

5.1.1 Short-term opportunities

With the inventory of rooms available to support stay-over tourism

seriously damaged and or destroyed, even a massive reconstruction effort will require more than three months to restore the accommodations. Nevertheless, it is the goal of stakeholders to have the recovery of tourism-

related business commence on November 11, 2017. Presenting the island to the world on St. Maarten’s Day, is emblematic of the determination and resilience of the country.

In the short-term business recovery, will include:

- Partial return of the cruise tourism

- Facilitating the return of loyal timeshare owners

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- Optimization of available condo/villa inventory (i.e. via Airbnb,

internet sales etc.)

- Facilitation of a rapid recovery of the marine trades - Immediate introduction of the Qredit program

Cruise tourism: The harbor facility is intact and can receive cruise ships as of the writing of this interim report. However, the cruise lines will only adapt their itineraries

to include Sint Maarten if certain conditions are met:

• A safe and secure onshore environment

• An extensive cleanup campaign • Availability of electricity, water and internet • An enjoyable shopping experience

• Availability of excursions, recreational activities and entertainment

In view of the above, and because the French Side’s damage excludes most

French shore excursions, a comprehensive approach for the Dutch Side recovery is envisioned. The concept consists of utilizing Philipsburg as the prime shopping experience, and identifying several beaches on the Dutch

Side to be used for excursions (including entertainment and recreational activities). In December, the Flying Dutchman project of the Rainforest group will go online and can be included to enhance the cruise tourist

experience. Security:

The unfortunate events directly following the storm, i.e. looting and violence, have resulted in a heightened sensitivity among business owners. A spate of criminal incidents in Philipsburg through the year, and the higher

risk for criminal incidents during the Christmas Season exacerbates the unease felt by business operators. As such, an enhanced presence of law enforcement is desired in the areas frequented by tourists for the remainder

of this season. Given the capacity challenges of local law enforcement, the KPSM wish to maintain the additional manpower provided in the immediate emergency phase, and where possible, have it augmented. The use of

mobile police units to increase the visibility of law enforcement is an option that needs to be explored.

Cleanup campaign: Despite the physical damage to the island, the recovery of the tourist industry, whether cruise, stay-over, or yachting, demands a certain level

of cleanliness. At the very least, those areas where Sint Maarten intends to receive guests, and routes leading to entertainment locations, must be as

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clean and sanitary as possible. Unsightly garbage collection sites and malodorous household garbage can seriously damage the image of the

island. In a world where communication is dominated by social media, bad news travels far and fast.

An intensive cleanup campaign needs to be planned and carried out in all districts using all available resources. Recovering Sint Maarten’s business activity is of importance to the entire community. Tourism is the main pillar

of the economy. An appeal to the public to request their participation in this effort.

A campaign to get the public involved includes providing them with time to participate in the CLEAN SINT MAARTEN WEEK!

Electricity, running water and telecommunication: For the shops and entertainment services to function properly, hygienically and safely, it is imperative that the areas where the tourists congregate

and concentrate have electricity, running water and internet connectivity. Sint Maarten must provide a high standard of service to our guests. This will reinforce that Sint Maarten is back in business and is a resilient

destination. The utility companies NV GEBE, Telem and UTS, must be included in the

preparation and coordination of the November 11th campaign. Shopping experience:

Philipsburg will be the prime shopping experience for the short-term business recovery effort targeting the cruise industry. Rapid restoration of the shopping facilities must be pursued. Because the official kick-off date

for the return of the cruise lines is November 11th, St. Maarten’s Day, the city must be appropriately and festively decorated. Sint Maarten flags and colors need to be displayed prominently and proudly by all businesses. This

will enhance the tourist experience. If the Sunset Beach Bar area can be restored and its entertainment function

revitalized in time for the event, this area can be used as well for events. Excursions, recreational activities and entertainment:

With the limited options of the French Side, Dutch Side businesses should strive to initiate alternative onshore excursions, recreational activities and entertainment. Beaches on the Dutch Side that are attractive for tourism-

related activities and entertainment include: Great Bay Beach, Kim Sha Beach, Sunset Beach, Mullet Bay Beach, Cupecoy and Orient Bay. The activities on the beaches must be organized in a controlled fashion to

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prevent a free for all, that can mar the visitor experience. A variety of recreation and entertainment options need to be offered.

The development of tourist attractions on the selected beaches can have the added benefit of creating jobs. Given the expectation of rising

unemployment, spin-off effects will be appreciated. Additionally, accelerating the implementation of the Rainforest Flying

Dutchman projects on the Emilio Wilson Estate, and developing an excursion at the Festival Village (A carnival experience), need to be pursued.

The W-NRP recommends assigning a multi-sectoral group to further detail and coordinate the implementation of the proposals. A project manager is

needed to lead and coordinate the operation. Facilitating timeshare owners:

Irma has made about 80% of the hotel and timeshare rooms unavailable. The time needed to adequately repair and or reconstruct those rooms is expected to take at least a year. Experience has shown that timeshare

owners remain very loyal to the destination, and are prepared to visit, stay and participate in the recovery even when the circumstances are far from ideal. However, some form of quality control of the available rooms and

amenities should be organized to prevent misleading potential visitors and causing destructive negative feedback about the island’s recovery.

Facilitating marine industry: The marine industry contributes 15% to the GDP of Sint Maarten. This segment of the local tourism market is very self-sufficient. Crew and

cruisers generally use on-board facilities and require little if any supplemental accommodation. Representatives of the Marine Trade have indicated that in the near-term their primary need is access to the island

for the survey and salvage of sunken vessels. Given the highly competitive nature of the yachting sector, Sint Maarten needs to support the rapid recovery of the local marine sector.

Facilitating micro-, small and medium enterprises: Entrepreneurship is the hallmark of a vibrant economy. Micro, Small and

Medium Enterprises (MSME’s) account for 80% of all businesses on the island. The best ideas often are derived by individuals or small businesses. During the startup phase, small businesses often cannot meet the lending

requirements of traditional financial institutions. To stimulate the power of entrepreneurship, funding is necessary. Based on the Ministry of Economic Affairs’ Economic Development Plan, the Department of Economy,

Transportation & Telecommunication, seeks to stimulate SME’s.

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To this end, contact was made with the non-profit foundation Qredits. This foundation offers unsecured micro and small business loans to qualified

individuals while the risk is carried by Qredits. Qredits has a special position in the financial market. They are not a bank,

but a foundation and are therefore do not seek to make a profit, but to have others make a profit.

The initiative was set to start in October 2017. Given the need for support to the business community, the program should be supported with financing from reconstruction funds to deal with the additional demand

created by the recovery efforts.

5.1.2 Business recovery infrastructure restoration: stronger and better

The crucial physical infrastructure for doing business, but also for social

development of the island includes: • Airport • Port

• Telecommunication • Electricity and water production/distribution

Airport: PJIA sustained a great deal of damage with the passage of hurricane Irma (see chapter 4.3.2). To facilitate the return of residents as well as visitors,

amongst others the timeshare owners mentioned earlier, management will give priority to critical operational systems and measures to meet the standards necessary for reopening of the airport for international

commercial flights in the near-term. The ability to resume commercial operations will not automatically lead to a restoration of pre-Irma flight schedules. In fact, several major airlines

will only resume regular flight service when load factors return to nominal levels. Demand for the destination is contingent on a rapid recovery of the stay-over inventory and normalization of other services.

The situation presents an opportunity to improve connections through other destinations. Winair, the local carrier, can develop the connecting routes

and maintain accessibility to Sint Maarten. Once the island is fully restored, connections will enhance and supplement direct flights to the island. A prerequisite for the development of airline connections is the attainment of

the so-called category 1 status for the airport. Sint Maarten’s civil aviation department requires support to achieve this

goal. Category 1 status will allow Winair to fly to more lucrative destinations and make connections thereby enhancing the airline’s possibilities for

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sustainability. The upgraded status can also generate more revenue for the airport mitigate the negative financial impact due to the hurricane.

The civil aviation department needs technical assistance and to achieve the category 1 status for the airport.

Port: The damage sustained by the port is no impediment for receiving cruise and cargo ships. The Port is therefore open for business.

Telecommunication: Both the Telem Group of Companies and UTS sustained extensive damage

to their infrastructure. Services are recovering rapidly though with service gaps: connection failures, dropped calls, line static etc. It is expected that the companies will restore their services to pre-hurricane levels by the end

of the year. To ‘build back better’, the telecommunication sector needs to conduct a

detailed assessment of the reason for the failure of their infrastructure, and determine what measures are needed to prevent service-disrupting damage due to storms.

International communication needs to be robust on an island. There is currently insufficient redundancy particularly with the absence of the SMPR-

1 undersea fiber cable. Immediate action needs to be taken in the near-term to increase the international communication connections on Sint Maarten. Furthermore, consideration should be given to consolidating the

local and international networks, under management of a single company. This would enhance efficiency and streamline investment in innovations to keep pace with the changes in technology.

Electricity and Water infrastructure: In chapter 4.3.1, we outlined the damage to NV GEBE’s infrastructure. We

also suggested what needs to be done to achieve an improved infrastructure in future. From the nature of the damage, it is clear that NV GEBE must prioritize the placement of the existing overhead electrical

distribution network underground. Approximately 20% of the network consist of overhead transmission cables. In addition, transformer houses must be better protected. Restoration of power, even in areas with

underground cables was hampered by damage to transformers. Protection must also be improved for the power generating plant. The roof

of the plant was damaged during Irma and hurricane Maria inflicted additional damage to the engines. The company’s business continuity plans need to include the availability of sufficient spare supplies to replace

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essential damaged engine parts. Before the hurricane, NV GEBE was already experiencing some difficulties in the supply of electricity.

Going forward, it is important that the problems are analyzed and that effective measures are taken. The transition to environmentally neutral

power generating equipment, and the introduction of renewable power sources needs to be prioritized. Consumers need to also be incentivized towards energy efficiency and adopting clean energy options for their

homes and businesses. Water:

The distribution network for water is primarily underground except for the water tanks. The damage to the water tanks led not only to limitations in the water supply in several areas, but also to contamination of the water

supply. The connections of the water tanks to the underground network, and connections to the home are vulnerable. These connections need to be protected against hurricane damage.

5.1.3 Business recovery: reconstruction

Stay-over tourism represents a significant segment of the tourism sector. Accommodations (hotel, timeshare, condo, villa) is a major part of the

tourism infrastructure. A first assessment of the situation after the passing of hurricane Irma indicates that about 80% of the inventory is out of commission. Major resorts will be not operational for a year or more

depending on the extent of the damage. While it is in every operator’s interest to build back better, additional costs exceeding the insurance proceeds can lead to complications. Financing the difference in a

challenging business environment (limited or no guest receipts) will be difficult. Limiting the period in which no revenues are generated is in the best interest of the operator and the community.

5.1.4 Economic recovery fund (ERF)

The business sector of Sint Maarten is in urgent need of financing at favorable terms to rebuild. The establishment of an economic recovery fund

that issues concessional financing7 (loans at favorable terms and/or rates) could meet this need.

7 Concessional financing, sometimes called "soft loans", are granted on terms more generous than market loans either

through below-market interest rates, by grace periods or a combination of both.

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The structure of the ERF will need to be detailed, however, the W-NRP believes that an ERF must have a revolving character. As loans are repaid,

the money can be made available for financing an emergency fund. The workgroup recommends the following:

- Facilitate a more rapid recovery by means of grants to finance the innovations required to achieve a faster pace of construction;

- Stimulate ‘building back better’ by means of concessional

financing8 for (a part of) the higher costs of strengthening/improving facilities;

- Provide a profit tax exemption or reduce the rate for five years

for companies that maintain full staffing at their pre-Irma salary levels;

- Establish an Economic Recovery Fund.

5.1.5 National Tourism Organization

Sint Maarten as a tourism product is down, but not out. Just as was the case after hurricane Luis, tourism activity is actively being pursued, albeit at reduced levels. In first instance, marketing and PR is needed to inform

international stakeholders about the progress (and rapid recovery). This represents the return on investment of the business recovery effort. Large marketing investments are not needed in the initial stage; however, the

destination needs to prepare to roll out a massive marketing campaign once the tourism infrastructure is renewed and restored. In fact, the opportunity to rebrand the destination, re-imagine a unique and authentic visitor

experience, must start immediately. The National Tourism Organization must become operational as it is best

suited to the task of preparing the destination for the its rebirth. Reconstruction funds should be earmarked for a marketing fund. This fund would disburse funds based on specific goals and targets, and remain

accountable for performance.

8 Concessional financing, sometimes called "soft loans", are granted on terms more generous than market loans either

through below-market interest rates, by grace periods or a combination of both.

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6. Community Recovery

Destruction of utilities, schools, and the product and services that people consider part of normal life takes time to restore. However, the rebuilding process itself provides an enormous boost to morale among the citizens

and contributes to recovery. The community of Sint Maarten have proven, time and again, that it is resilient. With history as our guide, building back a better and stronger Sint

Maarten should not prove impossible, however, assistance will be needed.

6.1 Housing

Residential recovery is of paramount importance after Irma. Shelter is a

basic human need, however, providing an adequate home can be a complex process, both in time and in money. To meet the needs of the community, multiple factors require study; social, economic, cultural and

environmental. Initial assessments indicated that more than 80% of homes were damaged to some extent, with many destroyed or uninhabitable. A distinction must be made between urgent shelter requirements and

planning and rebuilding safer houses, and more resilient communities.

6.1.1 Emergency Housing

Emergency shelter for those with the highest need, i.e. the homeless, must

be safe, adequate, connected to sanitation and services, affordable and most importantly, temporary. The shelter is meant as a stopgap measure until a permanent solution can be found.

It is important to complete the intake and assessment process to determine precisely how many persons need of temporary shelter. Furthermore, the

situation of the individuals must also be understood. Are there young children, single mothers, the elderly etc.? The emergency shelter will then need to accommodate their unique needs.

Tent cities and container villages have been used in the past with varying success. A major objection to tents and containers is the lack of privacy

and comfort and the lack of dignity of a person having their own place. The W-NRP recommends the acquisition of so-called ‘flat-pack’ shelters or fully equipped container homes.

This shelter solution comes, as the name implies, flat-packed, making them easy to transport.

IKEA in collaboration with the UN, has designed such a shelter (The Better Shelter) which can be easily assembled. The Better Shelter is a temporary 17.5 m2 lightweight, modular emergency shelter. It meets the basic needs

for the activities of basic living, for privacy, security and familiarity. It is a

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safe base offering a sense of peace, identity and dignity. The shelter can easily be dismantled, moved and reassembled and adapted to different

needs and areas of use. Five people can sleep comfortably inside and most importantly, the homes have solar paneled roofing, allowing inhabitants to generate their own electricity, extinguishing the need for candles or

kerosene lamps, or the need to include the shelter on the NV GEBE grid. The roof also helps to deflect solar reflection by 70%, keeping the interior cool during the day and warmer at night.

This better shelter solution is also sustainable inasmuch as the units can be re-used. Also, these shelters can also be deployed as part of the self-build

program, allowing persons to shelter near their damaged home during construction.

Shipping containers have been used for everything from off-the-grid getaways to temporary shelters. Made from the thousands of surplus containers that sit on docks around the world, these homes can be an eco-

friendly alternative to traditional building materials. Shipping containers are liked for their durability and, in some cases, their portability—although this can cost a lot of time and money. Several companies sell shipping

container homes that can be delivered and assembled in as little as 10 weeks. Containers typically come in two sizes, either 20 feet by 8 feet or 40 feet

by 8 feet. The smaller of the two equals about 160 square feet of living space, whereas the larger container gets you 320 square feet.

An estimated 500 emergency homes/shelters are required in the immediate term.

6.1.2 Self-build/repair housing

Sint Maarten is presented with an opportunity and responsibility to rebuild/repair safer homes after hurricane Irma. The first task is to identify measures that make construction better and safer, and to get these

measures adopted in building regulations and practices. In addition, communication will be an important tool in increasing the awareness of citizens of building better.

Persons who have homes that have been damaged, can be best served if they are allowed (and assisted) to rebuild. There are an estimated 900 such

cases. The W-NRP strongly recommends including those with the greatest need in the solution. In other words, house-owners should be included in building process itself. This can avoid tensions or conflict in future.

The W-NRP is proposing that building housing on Sint Maarten after Irma

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become a ‘people-owned process’. Recovery after this disaster can occur

faster and be more successful if community members can make decisions about, and lead, the repair. Reconstruction funds would be deployed in engaging, training and assisting home owners in the community to rebuild

their own homes. A pragmatic approach can include phased grants or financing in kind

(materials), technical/construction assistance, and structural inspections, to ensure that housing will be built back better.

With use of the emergency shelters located on or near the properties of owners, the self-build/repair program can commence before the end of the year. Eligibility requirements and identification of home owners needs to

carried out.

6.1.3 Community Housing

A key function of community housing is to provide accommodation that

is affordable to people on low incomes or who have no home. For the recovery of the housing sector on Sint Maarten, the W-NRP recommends a mixed-development housing program. This approach includes rental

housing (subsidized for lower income groups), and affordable ownership housing (financing accessible to middle income groups). In addition, rent- to-own options will need to be included. Community housing is meant to be

affordable housing, because, everyone deserves to own their own home, if they so choose.

The number of persons who qualify for community housing on Sint Maarten must be definitively established, however, estimates are available. The Sint Maarten Housing Development Foundation (SMHDF) reports that over

2,000 persons have registered. In addition, the Ministry of Public Housing estimates that there is a need for 5,000 homes.

Part of the 5,000 homes, includes replacement of sub-standard housing, referred to as shanty-towns, found in many places on the island. These structures need to be replaced. Hurricane Irma has laid bare, just like

hurricane Luis did, the shacks and sub-standard living circumstances that most of those shanty-towns represent.

In the spirit of ‘build back better’, the W-NRP recommends that the shanty-towns are halted and replaced with housing that meets building standards. In the Netherlands, this sort of operation is called district or neighborhood

restructuring. Spatial planning will be used to ensure that the homes are properly positioned and have the required facilities.

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Replacing sub-standard structures can be achieved by means of public-

private-partnerships. Furthermore, according to the Ministry of Public Housing, there is a significant unserved demand for single family housing. Several generations of families currently live in overcrowded homes

because of the lack of affordable options. Their level of income, or income uncertainty, makes financing or renting a home, impossible.

A study is needed in the near-term to determine the exact demand and criteria for community housing on Sint Maarten. The ratio of rental units to homes for sale, needs to be determined after market analysis.

6.2 Health

Every citizen is entitled to the highest attainable standard of physical and mental health, including access to medical services. Medical facilities capable of meeting the needs of Sint Maarten must be achieved as soon as

possible.

6.2.1 Facilities

The planned new general hospital to replace the St. Maarten Medical Center

(SMMC) has become a greater priority since the passage of Irma. The SMMC has been damaged necessitating the evacuation of patients.

The new project needs to move forward, however, changes will be necessary based on lessons learned from Irma. With winds exceeding 185 miles per hour, hurricane Irma serves as a

benchmark for hurricane resistant construction. Building plans for the new general hospital required resistance for category 5 storms to a maximum of 160 miles per hour. That must be improved. Re-engineering the plans

will add approximately US$ 25 million to the US$ 75 million construction cost.

Financing of the project was initially through USZV, however, the financial impact on the Fund in the aftermath of the storm, may make this commitment less viable. The costs due to the expected increase in

severance pay (cessantia) on SZV will not become evident until 2018, but the projections are that tens of millions of Guilders will be required.

Alternative funding for the general hospital is therefore preferred, either in the form of soft loans, grants or a combination thereof. Absent concessional financing or grants, guarantees issued to support USZV-financing can be

considered. The Minister of Health seeks to find support to secure the viability of this critical project from reconstruction aid. A modern general hospital will not only serve the people of Sint Maarten, but provide service

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to surrounding islands, including Saba and St. Eustatius. Diversification of

the economy can be achieved with the completion of this project.

6.2.2 Mental Health Foundation

Prior to the storm, this MHF was faced with challenges. The facility did not

fully meet the growing mental health needs of the population. A larger purpose-built facility to house persons in need of mental healthcare is necessary. Such a facility must support both outpatient and

institutionalized persons.

6.2.3 Water distribution

Water quality needs to be assured for the people of Sint Maarten. Initial

assessments show that both the tanks and the distribution network are compromised. To ensure proper quality for the community of Sint Maarten, the distribution network needs to be upgraded and replaced. The water

distribution network must become hurricane resistant. In addition, there is a need to build capacity to monitor and measure water quality at various points along the distribution network. Financial assistance will be required

to achieve the upgrade of this critical community service.

6.2.4 Sanitation & Waste Management

Processing of household- and commercial garbage, particularly from

restaurants and consumers of organic items, must be prioritized. The interruption in garbage retrieval directly following the storm caused a backlog in waste. Public health risks can arise due to direct contact with

waste accumulated in the streets, and indirectly from vectors such as flies and rodents. Moreover, hygienic conditions are a prerequisite for the business recovery

initiative related to the return of cruise tourism. It is important that the extent of the waste generation, the locations, and

type of waste are continually assessed. Additional resources to allow the increase of garbage pickup activities in the various districts needs to be identified, particularly prior to the November 11, 2017, resumption of cruise

tourism. Requests for such support need to be prepared.

The large amount of debris due to destruction caused by hurricane Irma also presents opportunities for Sint Maarten. Debris may include valuable

material such as concrete, steel, car wrecks and timber, as well as organics for composting. Processing of waste of all types should be evaluated as a source of income from recycling, as well as waste-to-energy incineration.

Government has conducted extensive studies in this regard, however, a

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system has not (yet) been operationalized. Sint Maarten post-Irma, must avoid the growth of the Pond Island landfill, or creating new unsightly

landfill sites. An improved tourism product requires that this challenge is addressed.

Current proposals need to be re-evaluated to address the situation post-Irma and the ‘build back better’ principle of the national recovery. Funding for the establishment of a modern waste management system and facility

should be considered for the reconstruction.

6.3 Employment & training

Due to the loss of a large segment of the tourism infrastructure, specifically hotels, unemployment is likely. Initial estimates show a 12% displacement

in employees in the first month after the storm. The challenge for displaced workers is how to deal with earnings losses. One solution is a program of wage subsidies. Such a program is meant to make up part of the difference

between a worker’s ‘new’ wages and the earnings prior to the job disruption. Many of the major employers on the island, have suggested retaining employees at either lower wages or reduced working hours.

6.3.1 Train to work

A second option involves investing in the employees by means of providing new skills through retraining. Retraining can provide some displaced

workers with new skills that are in greater demand which can reduce their earnings losses. For example, retraining hotel staff to fill construction jobs. During the reconstruction phase of the recovery, construction is expected

to become a leading economic activity. This expectation is supported by the historical data from the post-hurricane Luis situation.

Local vocational training institutions such as the NIPA, can be equipped to provide the required training. Furthermore, in keeping with the principle of ‘build back better’, certification needs to be included in the training

programs. Training should not be limited to the construction sector. Providing training

opportunities in more technically oriented fields such as education, law enforcement, telecommunication, aviation and healthcare can support recovery initiatives in other sectors. The University of St. Martin can play a

leading role in this regard. Educating the domestic work force reduces the need for foreign workers and supports efforts to reform immigration policy on Sint Maarten. In addition, efforts to diversify the economy will also

benefit from a training and certification program. To achieve a high level of effectiveness of such programs, it is

recommended that aid be made contingent on performance and linked to

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job placement. For example, training programs can be provided in stages, whereby eligibility for each successive stage (towards full certification and thus employment) is contingent of successful completion of classes. The

goal is to target retraining expenditures toward training-ready displaced workers. Institutions that enroll these workers under the proposed program will need to report periodically to the funding agencies regarding courses

taken, those successfully completed, certificates or degrees received, and the field of study.

The W-NRP recommends that a program is developed based on collaboration with the labor department, private sector, the education department and the funding agency. Suitable candidates and sectors need

to be identified and training-ready workers selected. Important is that training is tied to real job opportunity. It is pointless to imbue a person with a new skillset that cannot be put into practice.

To ensure progress toward the goals, the recovery strategy calls for a system of monitoring. This ensures the establishment of baseline

information, identification of program targets, and the tracking of financial results and performances. More detailed issues and mitigation strategies for education and the other policy responsibilities of Ministry of Education,

Culture, Youth and Sports, will be addressed in the after further consultations and design (issue- strategy-actor) before the end of October.

6.3.2 Labor Reform

The Ministry of Labor in collaboration with the labor unions and business representatives (tripartite meeting) were in advanced consultations regarding comprehensive labor reform for Sint Maarten. Agreement was

reached on replacing the antiquated system of severance pay with a modern unemployment fund that would guarantee benefits to those displaced from their jobs. An unemployment insurance fund will be based

on regular payments from employers and in so doing, act as a social safety net for the unemployed worker. The benefits can be tied to training to increase the chance of worker returning to the work force.

To complete this initiative, legislation needs to be completed and expertise is required. Creating this improved social benefit will serve to make the

process of terminating employment more transparent. Moreover, the legislation would also foresee in portability of pensions for employees thereby enhancing labor market mobility.

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6.3.3 Foreign labor

The need for foreign labor will likely not disappear in future, however, the policies can be modernized and adapted to the realities of the market. Pre-Irma statistics indicate that 60% of the foreign labor force are unskilled and

most work in the hospitality industry. Only 7% of the foreign labor work in technical or skilled jobs. Sint Maarten strives for a stronger and sustainable

recovery. Quality must be incorporated in services, products and people. Employment should therefore be tied to education. Foreign labor must meet standards for the professions they seek to take on Sint Maarten. The

permitting process must therefore change to meet the criteria. A humanitarian voluntary emigration policy is under review by the Ministry

of Justice and the Ministry of Labor. The economy is expected to contract due to the loss of tourism activity. Unemployment will increase. For those foreign workers who do not find alternative employment, emigration to

their home country can be stimulated to ease the social impact on the community during the recovery period. The ministries need expertise to further evaluate the efficacy of the program, and if viable, to continue to

the operational phase.

6.4 Education

The need to restore educational facilities after Irma is as an opportunity.

The Ministry of Education has developed a mid-term resilience plan designed to identify issues as well as mitigation strategies to further implement sustainability measures during the recovery and redevelopment

in the education, culture, youth and sport sector.

6.4.1 Multi-purpose hall

In the keeping with the principle of building back better, multifunctional structures are needed. The Ministry of Education, Sports and Culture seeks

to institute a policy that requires, at a minimum, that each district/community have access to a sport facility. This policy seeks to secure and promote the overall well-being of the community. In addition,

art and creative facilities and programs will be offered in the multi-purpose buildings, to promote athletic and artistic development in a safe and local

setting, accessible for all generations. The development of the creative industries should be recognized as an alternative economic growth sector just like the education sector that on average contributes 6% to the GDP.

In Sint Maarten, some schools have been designated as shelters. The W-NRP recommends that schools are used as shelters only as a last resort.

After a disaster, resumption of educational services can be hampered if shelters are needed for a longer timeframe. Community centers are probably more suitable as shelters.

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However, if schools are to be used as shelters, the facilities need to be upgraded to meet the function as a shelter (sanitation, etc.).

The reconstruction of damaged school facilities on the island should include a multi-purpose (sport) hall that capable of being used for other functions, and that can be easily prepared in the time of storms to house vulnerable

persons, or alternatively aid and support staff. These spaces can also be extended to other community users such as elderly or migrant programs and for temporary daycare facilities.

Schools that can benefit from the addition of the multi-purpose hall will be identified in a later stage of the recovery process at the completion of the

damage assessments. In the interim, the focus on the community and the role educational facilities can play, will be expressed by means of temporary learning spaces such as the donated mobile classroom Pavilion tents. These

Pavilions will be placed in areas that maximize accessibility and minimize traffic and congestion. Where needed, school bus transport will be made available. Due to all clean up and reconstruction activities, transportation

of families should be limited to a minimum to prevent hazardous situations and busy traffic.

6.4.2 Renewal of the learning environment

Twenty-first century learning will be imbedded in the overall education and learning system as educational is built back better. The ministry envisages a comprehensive approach that includes the use of internet connectivity,

information technology (ICT) and training of staff, educators and students. The philosophy of learning cities, a UNESCO strategy and program, will be further promoted by the Ministry of Education, Culture, Youth and Sports.

To strengthen the opportunities for children and youth, especially where families’ psychosocial well-being and living situations are seriously affected,

it is important to provide inclusive and a more broad-based education, including the needs of special needs students. Incorporation of these principles in the immediate curriculum is a priority to provide better basic

education (4-6 years high school). Accessibility to care and well-being services and strategies remain

important, especially at the schools and other early stimulation, daycare and youth facilities. To secure children’s daily nutrition intake, the school meals and feeding programs will be promoted. Public-private partnerships

for example ‘adopt a school’ would be needed.

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All facilities will experience scarcity in resources, therefore the overall cooperation in sharing of resources is needed. ICT strategies and investments, whether in hard or software or in trainings, need coherent

utilization.

6.5 Maintenance of Law and Order

The need for security is mentioned as a prerequisite to recovery in every

section of this interim report. Security, and more importantly, being safe in one’s environment, is essential to the future of Sint Maarten. Most of Sint Maarten’s population respects the rule of law. After the passage of

hurricane Irma, a criminal element upset the normal order. Law enforcement has since been dealing with the perpetrators of looting and violence in a firm and definitive manner. The community expects these

persons will be subject to the full measure of the law. Improvement of the law enforcement resources, physical and human, was

already the subject of a phased plan for justice. The plan included strengthening (training and equipment) and growth (more officers) of the police, and improvement of the prison (expansion of staff and training).

The education of law enforcement at Sint Maarten’s Justice Academy should proceed with all haste so that sufficient number of law enforcement professionals are available.

Improvements to the prison are no longer sufficient. Instead, a modern facility that meets international standards and can withstand future storms,

is required. The phased plan for the strengthening and upgrading of justice on Sint

Maarten includes short-, medium- and long-term initiatives that, with few amendments, can be executed in the benefit of the recovery of Sint Maarten.

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7. Government Recovery

7.1 Institutional Strengthening

Government must develop the appropriate capacity and be sufficiently equipped to exploit the opportunities for sustainable economic growth and recovery. Proper institutional frameworks can lead to a governance

environment that is conducive to higher tax revenue, better employment opportunities, and community well-being.

Elements that support the public sector’s ability include a modern fiscal infrastructure and management information systems.

7.1.1 New Tax system

Taxes are important tools of government regulation. A regulatory system requires implementation as well.

The need to improve the tax administration of Sint Maarten is well

documented. An analysis of the causes and recommendations for improvement can be found in the strategic report “Improving efficiency and increasing compliance”. In addition, the Ministry of Finance has developed

a business case for a ‘smart, state of the art’ tax administration. An administration with 21st century information technology, with which the tax payer can fulfill all his duties over the internet. It is a system that is

consumer friendly and will allow for one-stop customer service. Both quality and quantity of the human resources are addressed in the plan

for a new tax administration. The staff will also be housed in a new office complex, designed for effectiveness and efficiency. No longer will the tax process be strewn across the island in buildings that are not connected.

Moreover, the new approach includes broadening the taxpayer base by simplifying the regime, abolishing undesirable regulations and a shift from direct to indirect taxes.

Given the economic situation facing the island post-Irma, the introduction of the new tax administration cannot be delayed. Improving service to the

client, through efficiencies and simplified fiscal regimes, will result in improved compliance.

7.1.2 Data

One of the key limitations facing the national recovery planning process is

access to statistical data from both public and private sectors. Identification of damage and quantification of the losses is an ongoing process. Data is needed to support evidence-based proposals and to articulate the scope of

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the assistance required to expedite recovery. Prior to hurricane Irma, the availability of information was limited in scope.

Government must introduce business intelligence (BI) in support of a national statistical system. The technologies, practices for the collection,

integration, analysis, and presentation of information will support improved policy development and decision-making. The creation of a centralized database system, and the development of data policies that facilitate

smooth data exchange, while securing the integrity and confidentiality of data, is essential to the process.

7.1.3 Human Resource Development

Throughout the interim report, needs have been identified for training and technical expertise. For example, Sint Maarten’s civil aviation department (section 5.1.2). The W-NRP recommends that the human resource

development needs are assessed.

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8. Conclusions & Recommendations Since the approval of the plan of approach on September 20, the W-NRP

has worked on preparing an interim report. This report provides a review of the situation on Sint Maarten following the passage of hurricane Irma. It outlines the impact by listing priority areas for the reconstruction and

recovery. The interim report is, however, not comprehensive. It cannot be, given the paucity of information currently available from the affected sectors. Damage assessments are, at best, preliminary, and needs cannot

(yet) be identified with any specificity. However, the W-NRP has developed an impression of the scope of the challenges facing the island.

8.1 Conclusions

8.1.1 Emergency Phase

The immediate emergency caused by hurricane Irma is no longer acute. Relief efforts and emergency actions will likely be suspended in the near-term. This does not mean that needs do not exist. Persons who are

permanently displaced due to the destruction of homes continue to require emergency shelter, food and water, and possibly financial aid and mental health support for the foreseeable future. Residual needs from the

emergency phase will need to be communicated to the W-NRP. The needs can then be addressed in the NRP.

8.1.2 Communication

Planning depends on the availability of information. Definitive damage and needs assessments must be completed by October 31, 2017. This will allow the W-NRP to develop more accurate calculations to present to funding

agencies. In addition, the information will be useful in terms of preparing economic impact assessments, that are critical for drafting supportive and/or mitigation policies and programs.

8.1.3 Carrying capacity

Resources required for recovery will exceed the financial carrying capacity of the island. The initial damage assessments bear this out. Moreover,

based on the principle of ‘build back better’, the reconstruction requires that the community adapt to the new normal of bigger and stronger hurricanes; a situation that is challenging, financially and otherwise.

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8.2 Recommendations

8.2.1 Priorities

The W-NRP recommends the following approach in establishing priorities:

Sustainable economic development The recommended measures for economic recovery (chapter 5: business recovery) are geared towards creating sustainable economic development.

The W-NRP recommends jump-starting cruise tourism in Q4, in an attempt to ignite a full economic recovery within a year. In so doing, an opportunity

is created to improve the tourism product. The new and improved product, in turn, can strengthen Sint Maarten’s position in a highly competitive regional market.

Sustainable economic development requires securing and strengthening of the strategic infrastructure in the mid- and long-term. These priorities

include: - Port (section 4.3.2 and 5.1.2) - Airport (section 4.3.2 and 5.1.2)

- Telecommunications (section 4.3.6 and 5.1.2) - Electricity and Water (section 4.3.1, 5.1.1 and 6.2.3)

In addition, building codes will be subject to review to determine whether

the current requirements are sufficient to guarantee category 5 resistance of the structures on the island (Build Back Better).

Education Education is a prime building block for the economy, both now and in the future. For example, our main economic pillar, tourism, demands the

human touch, and, more often than not, that human element is knowledge-based. The rapid recovery of the educational sector is therefore critical, as it forms the foundation for both the economy and the community (section

4.5 and 6.4). Maintenance of law and order

Maintenance of law and order demands ensuring security in the short-term. Both residents and visitors need reassurance that law and order has been restored. Additionally, in the mid- to long-term, law enforcement must be

supported by means of an expansion in the quantity of law enforcement officials, and the quality of law enforcement agencies on Sint Maarten (sections 4.5, 5.1.1 and 6.5).

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Social infrastructure The prime challenge on the social front after hurricane Irma, relates to

providing the community with housing. One aspect to this initiative is the repair and rebuilding of the existing housing stock damaged by the storm. The other aspect involves replacing the sub-standard housing on the island.

In the short-term, emergency housing must be provided. For the mid- to long-term, an integrated community housing program, including public-private partnerships needs to be developed.

Anticipating and addressing the rise in unemployment is a priority as well. While the exact number of unemployed is not yet known, measures must

be taken in the near-term to accommodate displaced workers. Programs must be developed that will integrate persons seeking employment as part of the economic recovery of the island (sections 6.3.1 – 6.3.3.).

Managing the increase in solid waste caused by the storm debris is also urgent, and spans the entirety of the recovery cycle. In the short-term, the

large debris needs to be removed from districts (cleanup of the island-section 5.1.1). Thereafter, the material must be processed and recycled, particularly metals and timber. In the long-term, action must be taken to

reduce the landfill area. A waste management system is required (section 6.2.4).

A modern general hospital to replace the St. Maarten Medical Center (SMMC) is a priority. Alternative funding for the general hospital in the form of soft loans, grants or a combination thereof (reconstruction aid), is being

sought to secure this critical project (section 6.2.1). Institutional strengthening

As part of government recovery, improvements will include tax reform, organizational restructuring, human resource development, and upgrading of systems. Enhancement of the financial resilience of government is

necessary so that in times of national distress, government can act in a substantive way to effectively deal with crises (chapter 7).

8.2.1 Financial resources

The financial resources potentially available for recovery include: insurance payments, loans (soft or commercial), funding from the Netherlands’ reconstruction fund, funding from other international institutions (EU, UN

etc.), and funding from the public budget. Ways of bridging the public budget gap must be identified (sections 2.3.1 and 4.6).

Establishment of an Economic Recovery Fund (section 5.1.4) is

recommended. Entities responsible for the island’s critical infrastructure

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could engage in more rapid reconstruction and recovery if concessional financing is available.

Absent accurate assessments of the damage or the costs to rebuild/improve, it is not (yet) possible to accurately establish the size of

the funding needed to execute the recovery. However, the W-NRP understands the need to provide a “ball park” figure.

The following is an approximation based on the initial impressions of the damage and the funding necessary for the recovery of Sint Maarten:

amount of damage – {insurance payments + contribution business and individuals} = reconstruction fund

The expected insurance payments are expected to total US$ 785 million. The investment individuals and businesses are likely to make to ‘build back better’, is estimated at US$ 200 million. Given the current estimated

damage of US$ 1,8 billion, a funding gap of US$ 815 million remains. Without external financial support, government must provide funding to

strengthen security, cleanup the island, repair and upgrade schools, construct community housing and facilitate fiscal incentives to stimulate the economic recovery. Funding on such a scale will create structural

budget deficits for the foreseeable future. The alternative to public financing (and the resultant budget deficits), is a slower recovery spanning several years, and the potential for unacceptable social and economic

consequences. With a national budget of NAf 478 million (US$ 266 million) for 2017, Sint

Maarten’s ability to contribute is limited. Due to the expected loss in revenue for the remainder of the fiscal year 2017, government expects a budgetary shortfall of approximately NAf 156 million. As such, a temporary

exemption from the requirement to maintain balanced public budgets would be necessary for government to fund various recovery initiatives. Such an agreement would have to be reached with the Kingdom Council of Ministers

in keeping with article 25 of the Kingdom Law Financial Supervision for Curaçao and Sint Maarten.

8.2.2 Implementation organization

The W-NRP believes a dedicated organization is necessary to implement the NRP once the plan is formally approved and funding options are identified. In the development of the NRP, the work group has tried to

remain pragmatic and, where possible, apply structures and practices that have worked in the past, i.e. after hurricane Luis.

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The Office for Recovery and Reconstruction (ThORR) should be established by no later than December 2017. ThORR will be tasked with managing the

implementation of the initiatives, projects and programs, defined in the NRP. In addition, ThORR will liaise with the Dutch reconstruction

coordinator to ensure that projects meet the conditions and criteria imposed by the reconstruction fund.

Managing the projects will be a team of technical experts (project managers) selected based on the required skillset of the portfolio of projects. ThORR will be managed by an experienced program manager who

will coordinate the activities of the office and report to the Council of Ministers on the progress of the NRP-implementation. A reporting system will be developed to facilitate the work and to ensure that there is

transparency and accountability for the funds that are invested.

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List of abbreviations

ATC Air Traffic Control Facility BBB Build back better BI Business Intelligence

CBA Charlotte Brookson Academy CBCS Central Bank of Curacao and Sint Maarten ECLAC Economic Commission for the Caribbean and Latin America

ERF Economic Recovery Fund GDP Gross Domestic Product GEBE Gemeenschappelijk Energiebedrijf Bovenwindse Eilanden

ICT Information Technology KPSM Korps Politie Sint Maarten NGO Non-Governmental Organization

NIPA National Institute for Professional Advancement NRP National Recovery Plan PJIA Princess Juliana International Airport

SECDA Stichting Early Childhood Development Association SML Sister Marie Laurence School SHTA Sint Maarten Hospitality Trade Association

SIMARC Sint Maarten Archeological Center SKOS Foundation Catholic Education Sint Maarten SME Small to Medium-sized Enterprise

SMMC Sint Maarten Medical Center SMMTA Sint Maarten Marine Trade Association SZV Sociale Ziektekosten Verzekering

TelEm Sint Maarten Telecommunications ThORR The Office of Recovery and Reconstruction UNDP United Nations Development Programme

UNESCO United Nations Educational Scientific and Cultural Organization

USM University of St. Martin

UTS United Telecommucation Services VROMI Ministry of Public Housing, Spatial Planning, Environment &

Infrastructure (volkshuisvesting, ruimtelijke ordening, milieu

& infrastructuur) W-NRP Workgroup National Recovery Plan