Immigration-dependent extensive growth in small island tourism economies The cases of Aruba and Sint Maarten

Aruba and Sint Maarten are two countries within the Kingdom of the Netherlands, situated in the Caribbean. Both have embarked on a dedicated tourism-driven and highly immigration-dependent development model starting in the 1970s and 1980s, making them typical examples of ‘Small Island Tourist Economies’ or SITEs. This article focuses on one aspect of the quality of their development, which is whether this high-volume strategy has resulted in increased productivity. To that end, the development of several tourism volume indicators is compared to real gross domestic product (GDP) growth. Using real per capita GDP as an indicator, an assessment is made of labour productivity growth. Production volume has increased enormously through foreign investments and immigration, while productivity has remained stagnant. Given the intrinsic limitations of the two island territories, to achieve a sustainable strategy, Aruba and Sint Maarten need to limit production volume while attracting more productive investments and develop their human resources.