Curacao’s Other Problem (And an Opportunity for Development)

The Caribbean island of Curacao made international headlines in May due to the situation of its oil refinery, Isla Curaçao B.V., which is operated by the Venezuelan state-run oil company, Petroleos de Venezuela SA ( PDVSA). PDVSA has a contract to operate the refinery until 2019 and unfortunately Venezuela’s crisis has hit PDVSA and, naturally, Isla. The situation reached a boiling point in May when ConocoPhillips “seized products” that belonged to PDVSA after the company (Conoco) won court orders allowing it to do so.

Isla is critically important to Curacao’s economy and population, however, there are two ongoing developments that also deserve greater analysis, both for positive and negative reasons. Namely, the well-known international shipyard group Damen Group is currently upgrading and expanding the island’s shipyard. That’s the good news. On the other hand, Curacao, like the rest of the region, is receiving a steady influx of Venezuelan citizens, which is upsetting the very delicate socio-economic balance of an island with around 160 thousand citizens.

While it is part of the Kingdom of the Netherlands, Curacao enjoys a high degree of autonomy over its domestic politics, and the leadership in Willemstad will need plenty of statesmanship and forward thinking to successfully address the island’s mounting challenges.

The Good News: An Expanding Port

Damen took control of Curacao’s port in September 2016 via a concession agreement with Curaçaose Dok Maatschappij N.V. (C.D.M.). The facilities, renamed Damen Shiprepair Curaçao (DSCu) on February 2017, are currently able to repair and provide maintenance to vessels, but Damen wants to further improve and develop the infrastructure to become a default stop for vessels traveling the Caribbean Sea and also for regional navies and coast guards. The island’s location is helpful towards achieving this goal as it is located just north of Venezuela and not far from Panama – then again, even an upgraded DSCu will have to compete with other more established port facilities in the region, particularly the Cartagena port in Colombia.

In order to expand the DSCu’s capabilities, Damen sent two floating docks that arrived to the island in late April. According to Maritime Executive, “the larger of the two is a Panamax-class dock measuring 230 meters by 45 meters for tankers, box ships and other large vessels, while the smaller dock measures 108 meters by 23 meters and is ideal for all kinds of tugs, work boats and offshore support and anchor handling vessels.” The article also quotes DSCu’s managing director, who explained that “even now our sales team is in discussions with a number of companies regarding a wide variety of vessels ranging from a local research vessel to tugs, small cruise ships and OSVs. We also plan to support regional naval vessels including those of the Royal Dutch Navy and with the support of a Damen Services team the yard will provide maintenance and repair services to Damen-built tugs and workboats operating in the region.”

Indeed, several Greater Caribbean states utilize Damen naval platforms, like The Bahamas, which purchased a number of Damen vessels as part of Nassau’s Sandy Bottom Project to improve the capabilities of the Royal Bahamas Defence Force. Additionally, regional shipyards have constructed vessels based on Damen models, like Mexico’s ASTIMAR for the Mexican Navy. Hence, DSCu could very well become a major maintenance and repair shipyard for regional warships, coast guard boats, not to mention civilian vessels that cross the Caribbean on any given day.

The Bad News: A Growing Migration of Venezuelans

An ever-growing number of Venezuelan citizens have migrated to countries like Brazil, Colombia, Peru and the U.S., in the past couple of years as the situation in their country worsens, and the Caribbean island has also received a number of them.

Unfortunately, there is no exact number of how many Venezuelans have arrived on the island, as the Curacao government has not issued statistics to give an idea of how big (or small) the problem is. An article in a Dutch newspaper stated that “between five and ten thousand Venezuelans” may be on the island, but a reliable source in Curacao explained to the author that this estimation sounds exaggerated. (Then again, according to a 19 May article by the Curacao Chronicle, Aruban Prime Minister Evelyn Wever-Croes similarly said that “there are already about 5,000 refugees who reached the island [Aruba] via plane or boat.”) Thus a problem that hinders this analysis is understanding how many Venezuelans are on the island nowadays, though it is safe to argue that just a few thousand individuals can drastically alter the social and economic fabric given Curacao’s small area (171 square miles) and its population of around 159 thousand as of 2016, according to the World Bank.

A major concern is how will Curacao bear the cost for providing refugees and migrants with basic assistance. According to Lesley Fer, Risk Management & Disaster Policy Director for Curaçao, “the government will have to pay about 250 guilders per day per refugee. This is for basic costs such as food and housing, which also includes medical care, education and employment.” Willemstad is looking to external donors, namely The Hague, for financial support to expand infrastructure and be able to help the accepted refugees – this will probably strain relations between the island and the kingdom.

Unfortunately, people have perished as they tried to reach Curacao, as a boat carrying refugees capsized in January, killing at least four. Since they do not have legal documentation to stay on the island, Venezuelans could also be abused, and there are many reports that Venezuelan women are working in the island’s brothels. Finally, as we have witnessed in Europe with the flow of North African and Middle Eastern refugees, this sudden influx of Venezuelans may promote hate crimes in the island.

As the economic and political crisis in Venezuela continues, we can expect more Venezuelans to go abroad in search of a better life. Curacao will likely remain an objective, thus it is critically important for Willemstad and The Hague to come up with a humane and comprehensive immigration policy.

Final Thoughts

While the international media focus is, understandably, on the future of PDVSA and its impact on the Isla Refinery, the two other issues discussed in this commentary are important because of their potential consequences, both positive and negative.

For example, if Damen can upgrade and expand the infrastructure of DSCu, the shipyard could become a new source of income for the island. On the other hand, we can expect a greater number of Venezuelans risking their lives to reach the island in the near future as the situation in their homeland continues to deteriorate. These individuals must be treated in a humane and respectful manner while also taking into account Curacao’s limitations.

The views expressed in this article are those of the author alone and do not necessarily reflect those of any institutions with which the author is associated.