Ile de Saint-Martin: business on the Dutch side, decline on the French side

Oyster-Pond: In this postcard bay, yachts are reflected in the turquoise waters that overlook beautiful villas nestled in the heart of lush vegetation. It could be paradise if this Caribbean marina were not the subject of a terrible territorial dispute. Indeed, it is exactly on the border that divides the island of Saint-Martin, a confetti the size of the island of Ré piqué in the north of Guadeloupe: on the one hand Saint-Martin, an overseas community belonging to France, and on the other the other side Sint Maarten, an autonomous area dependent on the Netherlands. According to legend, it is precisely from this point that the French and Dutch runners set out in 1648, responsible for following the coast, one north and the other south, with their meeting point having to mark the other side of the border . Doped with red wine or rum, it depends on the versions, the vicious tricolor athlete would not have hesitated to take side roads, allowing France to conquer a wider area. But in their joy at the division of this island, the French and Dutch representatives forgot to agree on the course of the border at Oyster-Pond.

About three hundred and fifty years later, the two administrations are still clashing on this issue, and the Saint Martin authorities have shunned the communal celebrations since France took the risk of controlling a site in the disputed part. It must be said that these few centimeters change everything. In the north, Saint-Martin is a miniature reproduction of the French model and must apply our law and standards without necessarily having the means: the island has no prison or prud’hommes! In the south, Sint Maarten fervently puts the principles of Anglo-Saxon laissez-faire into practice, without having to worry about European rules (its status exempts it from that) and protests from the Netherlands. Between these two systems at the antipodes, a theoretical border, without customs controls, because since the partition of the island, the principle of free movement of goods and people prevails. Does this remind you of anything? “Here is the European Union ahead of its time,” notes Daniel Gibbs, deputy to Saint-Martin and president of the community, half fig, half grape.

> French Saint-Martin – Dutch Sint Maarten, the administrative differences:


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The Dutch side attracts investors and tourists

Suddenly, his territory faced the full competitiveness of its neighbor, and we can’t say it succeeded. The GDP per capita is almost double the other part (14,700 against 26,021 euros), the unemployment three times higher (30.5% against 11.5%), and the crime rates would even make the bosses of the Marseilles underworld can make you faint. Every year there are 220 armed robberies per 1,000 inhabitants, compared to 64 in Guadeloupe and 14 in the Bouches-du-Rhône. When you travel around the island, the difference in dynamics is obvious.

On Dutch soil, 2.4 million tourists come every year to happily spend their dollars in duty-free shops, promiscuous bars and casinos where appropriate clothing is far from compulsory… attracts… 24 times fewer travelers! On the coast of Marigot, the capital, visitors don’t rush to walk the aisles of the souvenir market or shop in the luxury stores. “It’s infuriating, because we have many assets and a real authenticity,” laments Stéphanie Caliste Manette, author of “Boosting tourism in Saint-Martin”, scanning the bay of the capital.

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But now the beauty of the landscapes is not enough to be competitive, especially against a neighbor who is not very inclined to control the underground economy and money laundering activities. “It is clearly more attractive to invest there,” says Paul van Vliet, associate partner at PwC Dutch Caribbean. Firstly, because the Batavian territory does not care much about granting social rights to its workers. The minimum wage is very low there, the paid vacations half as generous as on the other side (15 days a year at 30) and the 35 hours unknown to the battalion. The costs are also lower. Fipcom, the local Medef, did the calculations. Based on 176 hours worked per month, a minimum wage with premiums is 968 euros on the Dutch side and 2,160 euros for French people! The Polish plumber can change his clothes: in Saint-Martin the competition is much fiercer and lives on the sidewalk across the street. Let’s add that even though taxes are less heavy there than in mainland France, Saint-Martin puts a lot more pressure on its taxpayers. There is no real estate tax on Sint Maarten and certain large projects can benefit from a complete exemption.

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> Company figures on both sides of the island:


Sources: IEDOM, Chambers of Commerce and Industry of Saint-Martin and Sint Maarten, FIPCOM, Sint Maarten Department of Statistics. – ©S. Frances / France only.

French standards weigh on companies

As if that weren’t enough, French people have to endure standards that are stricter than their lucky neighbors. Unimaginable on their part, for example to have tourists jostling for their lives on a beach at the end of the airport runway to watch the planes skim over the ground. The Dutch, on the other hand, are content to put up a “Danger of Serious Injury or Death” sign that doesn’t make anyone flinch. Almost everything is like that. “On the same boat, their rental companies can place 120 people and ours no more than 28”, annoys Bulent Gulay, president of the Métimer association, which brings together professionals of the sea. Hoteliers are required to use refractory plates that cost an arm and a leg, while their Dutch competitors can use basic linen. “So to be profitable, we need to fill our rooms to 60%, compared to 40% for our competitors, says Philippe Thévenet, president of the Saint-Martin hoteliers association. The same gloom at restaurants, which can’t serve meat from the United States (cheaper), or in the construction industry, where standards increase construction costs by 30%. As a result, there were three times as many building permits among the Dutch in 2015 (219 as against 73).

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With exactly the same population, Saint-Martin, for example, manages to house far fewer companies than its Batavian neighbor: barely 7,000, of which only half are actually active, compared to 11,000. “And many of them struggle to survive,” added Michel Vogel, president of Fipcom. Fair return, the assistantship, he, is doing well: at the latest scores, one in five inhabitants of the French part was a beneficiary of the RSA, and this service alone swallowed 12% of the operating budget of the area! An aggravating circumstance, the benefits paid are often not even spent on the French side, because many Saint-Martinois, attracted by a favorable exchange rate (with the Dutch the official currency is the dollar), prefer to make their purchases from the other side of the border. According to the authorities, some RSA beneficiaries would also work there discreetly to complete their benefits completely illegally. “They often have night jobs in casinos or bars, because the French government can only carry out its checks during the day,” Paul van Vliet denounces.

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Budget in red for Saint-Martin

The most irritating thing is that many residents of the Dutch side do not hesitate to come to Saint-Martin – and sometimes even settle outright – to take advantage of the generosity of its social model. Like the metropolis, this little slice of France has a quality health and education system that it would be a shame not to use. Ultimately, as we can see, this Caribbean island is a good example of the international division of labor. On the one hand we have companies, dynamics and jobs. On the other hand, the burden, the weight and the services. No wonder that Saint-Martin, whose governance is very unstable – eight presidencies have succeeded each other since 2007, three of which have been declared invalid by the Council of State – is struggling to balance his budget!

Regularly in the red since the mid-1990s, finances were further plagued by the status change in 2007. Detached from the department of Guadeloupe and transformed into an “overseas collectivity”, the area saw its debt rise from 14% to more than 50 percent. % of GDP. It must be said that the receipts have great difficulty getting into the treasury, because even more than on mainland France, fraud and evasion are a national sport here. The residents also blame Paris for not compensating for the transfer of skills.

> Saint-Martin receives little money from the state compared to other Dom-TOMs:


So what to do? Close the borders? Unbelievable, because most Saint-Martinois have relatives on both sides. Crop the social model? Not only would that make a devil’s mess worse than in Guyana, but it’s not sure that would be enough to clear up the situation. “In order for Saint-Martin to become as competitive as its neighbour, the rules of the game would have to converge, which would be a huge sacrifice,” said Gilles Genre-Grandpierre, from Iedom, a subsidiary of the Banque de France’s overseas departments. -TOM. So give Saint-Martin European OCT (Overseas Countries and Territories) status, like Saint Martin? This would certainly enable him to get out of Brussels’ grip, warns Loïc Grard, professor at the University of Bordeaux and author of a report on the matter. According to him, France would rather have an interest in gently negotiating derogatory treatment in Brussels for its overseas possessions. “If all goes well, she should be able to get enough adjustments to make things better,” he says. “There’s no need to break the house, we just need more leeway,” said Daniel Gibbs, the community president. Instead of grabbing the checkbook every time there is a flare-up and immediately forgetting the difficulties of these areas, Paris would do well to think about it.

So what to do? Close the borders? Unbelievable, because most Saint-Martinois have relatives on both sides. Crop the social model? Not only would that make a devil’s mess worse than in Guyana, but it’s not sure that would be enough to clear up the situation. “In order for Saint-Martin to become as competitive as its neighbour, the rules of the game would have to converge, which would be a huge sacrifice,” said Gilles Genre-Grandpierre, from Iedom, a subsidiary of the Banque de France’s overseas departments. -TOM. So give Saint-Martin European OCT (Overseas Countries and Territories) status, like Saint Martin? This would certainly enable him to get out of Brussels’ grip, warns Loïc Grard, professor at the University of Bordeaux and author of a report on the matter. According to him, France would rather have an interest in gently negotiating derogatory treatment in Brussels for its overseas possessions. “If all goes well, she should be able to get enough adjustments to make things better,” he says. “There’s no need to break the house, we just need more leeway,” said Daniel Gibbs, the community president. Instead of grabbing the checkbook every time there is a flare-up and immediately forgetting the difficulties of these areas, Paris would do well to think about it.

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