Journal Issue

Kingdom of the Netherlands—Aruba: 2013 Article IV Consultation

International Monetary Fund. European Dept.
Published Date:
August 2013
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Rebuilding Fiscal Space1

A. Background

1. Aruba’s fiscal position has deteriorated substantially in the aftermath of the global financial crisis. The overall deficit that averaged around 3 percent of GDP during 2005-07 almost doubled during 2009-12. Tax revenues (excluding the one-off oil refinery tax settlement payments) remained broadly stable at around 20 percent of GDP, although the cut in turnover tax (BBO) rate substantially weakened indirect tax revenues. Grants started to decline in 2009 and came to a halt in 2011. While the fiscal deterioration was largely due to the increased levels of government expenditure, especially the current spending, the loss of grants also played a role. Although all categories of current spending grew, public sector wage related costs were the main driver of the rise, followed by spending on goods and services. Meanwhile, capital spending remained broadly unchanged at relatively low level of 1½ percent of GDP.

Aruba Fiscal Balance

(Percent of GDP)

Sources: Aruban authorities; and IMF staff calculations.

Government Current Non-Interest Expenditure

(Percent of GDP)

Sources: Aruban authorities; and IMF staff calculations.

2. The expansionary fiscal stance was accompanied by a fast rise in public debt. While the pre-crisis debt levels hovered around 45 percent of GDP and even declined in 2007-08, the estimated public debt ratio at end-2012 stood at 67 percent of GDP. The post-crisis increase in public debt largely reflected sharp economic contraction in 2009-10, but, for the last two years, higher primary deficits and interest costs were the largest contributors to the increase in the public debt-to-GDP ratio. In 2012, a part of financing came from the use of government deposits which substantially eroded fiscal buffers.

Goverment Debt-creating Flows

(Percent of GDP)

Sources: Aruban authorities; and IMF staff calculations.

3. Without additional reforms, the average deficit observed during 2009-12 is likely to persist in the medium term bringing the public debt level above 80 percent of GDP in 2018. In addition, the fiscal impact of aging population, affecting both pension and health related spending, and commitments under the public-private partnerships (PPP) pose significant risks to the sustainability of public finances in the longer term.

4. Very high levels of public debt can be detrimental to economic growth. This is not only because of financing risks, but also because of the drag that debt imposes on the economy by crowding out private investment and limiting fiscal space. Theoretical literature suggests a nonlinear relationship between public debt and growth, and some empirical studies find that public debt beyond certain thresholds can have negative effects on economic activity (e.g. Caner et al., 2010).

5. The detrimental effects of very high levels of public debt have been examined also for the Caribbean region. Greenidge et al. (2012) find that at 55-56 percent of GDP the debt’s effect on economic growth turns from positive to negative. Although such thresholds are estimated to be higher for developed economies (80-90 percent of GDP) and emerging market countries (60-80 percent of GDP), for small island economies like Aruba, a lower threshold seems appropriate given higher risk premia on interest rates (compared to advanced economies) and lower potential growth (compared to emerging market economies).

B. Addressing Near-Term Challenges

6. The near-term challenge is to implement a credible fiscal consolidation to avoid a high debt-low growth environment faced by many other Caribbean countries. The Aruban authorities have already announced intentions for fiscal consolidation in their Financial Economic Memorandum of December 2012. In particular, their medium-term outlook envisages a balanced budget by 2016 which they plan to achieve mostly based on expenditure measures, including restraining public sector wage related expenditure; however, the measures are yet to be defined and legislated.

7. Our analysis shows that a more ambitious consolidation based on both expenditure and revenue measures is needed to address sustainability risks. Specifically, reaching a balanced budget in 2015 and ensuring surpluses of 1 percent of GDP on average thereafter will bring the public debt down to below 60 percent of GDP in 2018, an adjustment that seems appropriate for the medium term. Such an adjustment will, first of all, create fiscal space to address risks related to contingent liabilities, particularly growing ageing and health care related costs. It will also lower financing risks for the government, boost the economy’s resilience to shocks, and improve its growth prospects. All these are important factors given Aruba’s vulnerability to shocks evidenced by volatility of output and fiscal stance in the recent past.

Scenario Analysis of Fiscal Deficits

(Percent of GDP)

Sources: Aruban authorities; and IMF staff calculations.

Scenario Analysis of Public Debt

(Percent of GDP)

8. When planning a fiscal consolidation, its impact on the economy, including through composition of the adjustment, should be an important consideration. A review of various studies on the size of fiscal multipliers suggests that a plausible range for spending and revenue impact multipliers could be 0.5-1 and 0.1-0.5, respectively, and lower than that for small island economies like Aruba.2 Estimates of expenditure and tax multipliers are not available for Aruba, but given the highly open economy, the fiscal multipliers are unlikely to be large. Moreover, credible consolidation could well improve investor confidence and result in better financing terms. Regarding the composition of the adjustment, it should consist of both expenditure and revenue side measures.

9. Another important consideration is the presence of fiscal responsibility frameworks which can contribute to successful fiscal consolidations. Such frameworks can ensure discipline when implementing and sustaining spending cuts. There is evidence that around a quarter of successful major debt reduction episodes achieved through fiscal consolidation were preceded or accompanied by the introduction of fiscal rules and that consolidation efforts were more successful with expenditure-based rules (Amo-Yartey et al, 2012). In a welcome move, the Aruban authorities have recently initiated work on the introduction of a fiscal council and fiscal rules. In particular, they are considering both a debt rule and a nominal expenditure ceiling which seem appropriate for Aruba. In this regard, an important first step would be the strengthening of fiscal institutions by building adequate capacity for reporting. It is also important to put in place proper monitoring and corrective mechanisms for the effective implementation of fiscal rules.

10. A large part of the fiscal consolidation should come from expenditure reduction, but revenue measures are also needed. Expenditure cuts should focus on public sector wage bill, as well as on improved spending efficiency, including rationalization of transfers and subsidies. At the same time, Aruba needs to undertake measures with a view to boost revenues from indirect taxes.

  • Public sector personnel cost. At above 11 percent of GDP, compensation of government employees is the largest component of government spending. Adding wage subsidies to the picture brings wage-related spending close to 15 percent of GDP. Given the recent performance of the economy, a substantial divergence has emerged between growth in public wage costs and the growth of the economy. Wage-related spending is also high as a percent of total revenues. Targeting a gradual reduction in wage related costs to their 2009 level can create savings of around 2 percent of GDP by 2018. In order to make consolidation durable, this should be achieved through a combination of a permanent reduction in the number of government employees (which grew by 3 percent in 2012) and a review of the wage compensation policies in the public sector.

Compensation of Government Employees 1/

(Percent of GDP)

Sources: CBA; IMF WEO database and staff calculations.

1/ The numbers for Aruba exclude wage subsidies.

Government Wage Bill as a Share of Total Revenue 1/


Sources: CBA; IMF WEO database and staff calculations.

1/ The numbers for Aruba exclude wage subsidies.

  • Other current spending. Spending on goods and services should decline in line with the reduction in the number of public sector employees and a further reduction should be targeted with efforts focusing on raising the efficiency of public spending. Also, transfers and subsidies, especially transfers to the health care system, will need to be contained and reduced. Altogether, restraining these categories of spending can produce savings of around 2½ percent of GDP.

  • Capital spending. Government capital spending levels are relatively low in Aruba and it would be difficult to achieve savings from this spending category as bringing it further down can have a negative impact on publicly provided infrastructure and, hence, on economic growth.

Government Capital Spending

(Percent of GDP)

Indirect Tax Rates 1/


Source:s KPMG Corporate; and Indirect Tax Survey 2012.

1/ VAT or turnover taxes.

  • Revenue measures. While overall tax revenues in percent of GDP seem to be broadly in line with those of regional peers, the authorities should consider raising more revenues from indirect taxes. The introduction of a VAT is one potential measure. Simulations based on rather conservative assumptions on coverage and collection efficiency suggest that a VAT with a standard rate of 15 percent (and a lower rate for the tourism sector) could yield around 6 percent of GDP in revenues; however, its implementation would require proper preparation. More feasible near-term measures could include: (i) raising the BBO rate back to its original level of 3 percent which would provide additional 2 percent of GDP in revenues; and (ii) increasing excise taxes and import duties to levels that would produce an additional 1 percent of GDP in revenues.

  • Other savings. A steadfast implementation of the above measures will result in gradual improvement in the government fiscal balances which in turn can generate savings from lower interest expenditure to the tune of 1 percent of GDP by the end of the consolidation period when compared to the scenario with unchanged policies.

C. Addressing Challenges Related to Ageing

11. The fiscal impact is likely to be significant in Aruba if trends of rapid ageing identified in the 2010 Census continue. With ageing population, public spending on pension and healthcare is expected to increase.3 Demographic projections suggest that the share of old people will increase substantially over the next two decades reaching almost 24 percent in 2030. As a result, the old-age dependency ratio (people aged 60 and over to those aged 16-59) will rise markedly by 2030.

Aruba: Population Projections and Dependency Ratios

Share in Total Population (percent)Dependency

Age 0-15Age 16-59Age 60 & over
Sources: Aruba’s Central Bureau of Statistics (CBS); and IMF staff calculations.

12. Aruba’s old age pension (AOV) and general health insurance (AZV) schemes’ finances will come under increasing strain. The AOV balance turned negative already in 2009 and its reserves have been used to cover the shortfall; however, the reserves are projected to run out in 2014.4 Our projections, which assume unchanged pension parameters and costs growing at the inflation rate, suggest that the AOV’s deficit will reach close to 3 percent of GDP by 2030. Regarding the AZV, over the last six years its operations were balanced by annual transfers from the central government which amounted to around 2½ percent of GDP in 2012. AZV projections suggest that health care costs will be increasing reflecting inflation and ageing related cost pressures. This means that, absent any changes to the system, government transfers to AZV will have to increase, while regional comparison shows that Aruba’s public spending on health care is already one of the highest.

Pension-related balance and AOV reserves

(percent of GDP)

Source: Aruba SVb, CBS; and IMF staff calculations.

13. The old-age pension and health care schemes will be an increasing drag on the budget, and, if left unchecked, could threaten the long-term sustainability of government finances. Aruba, hence, needs to initiate immediate measures targeting improvement of the financial situation of the AOV and AZV. Also, since AOV reform can affect long-term growth through changing the labor force participation rate, Aruba should consider it as part of structural reforms aimed at boosting its potential growth. Possible reform measures could include5:

  • Raising the statutory retirement age: A gradual raise in the retirement age will strengthen old-age pension finances through more years of contributions and fewer years of pension benefit payments. It will also contribute to increasing the labor supply, consumption and, hence, can boost economic growth.

  • Increasing the old-age insurance contribution rates: A consideration should be given to increasing the current rates, especially that for employee contribution which, at 3½ percent, appears to be on the low side. This should, however, be considered in the context of overall level of labor taxation, including income taxes and all types of social security contributions, which, if very high, could have adverse effect on labor supply.

  • Reducing the replacement rate: One way to slow down the increase in pension costs may be through lower pension benefits. This can be achieved by changing the indexation approach or linking the pension benefit to demographic factors such as the increase in life expectancy. The recent introduction of mandatory general pension will most likely lead to a higher replacement rate for overall pensions in the longer term and help reduce the pressure on AOV to increase pension benefits.

  • Increasing revenues and containing costs of the health care system: More revenues could be raised by increasing contribution rates (currently at 9 percent for employers and 2.5 percent for employees) and costs can be reduced by shifting part of the burden to beneficiaries through introduction of copayments and deductibles (currently, the government pays for 100 percent of the cost).

14. Given the current level of payroll taxes and replacement rate in Aruba, the pension reform should focus on increasing retirement age. The current retirement age for the AOV beneficiaries is 60 years which is relatively low compared to many regional peers where it has been raised to the range of 62-65 years. Our simulations suggest that raising the retirement age can be a highly effective measure to contain pension spending. These simulations are for illustrative purposes and, the shorter the transition period to higher mandatory retirement age is, the larger will be the positive impact of such reforms on AOV finances.

Pension Spending Under Illustrative Reform Scenario(Percent of GDP)
No change4.46.0
Increase retirement age to 63 by 20204.44.7
Increase retirement age to 65 by 20204.43.9

D. Conclusions

15. Strong fiscal management is required to avoid excessive debt and to create sufficient space for addressing shocks and risks from contingent liabilities. In the context of the fixed exchange rate, fiscal policy is the main stabilization tool and has a role to play in boosting the economy’s potential growth. At the current juncture, and given fiscal multipliers are unlikely to be large in Aruba, all these objectives call for fiscal consolidation without delay.

16. While consolidation should focus on expenditure reduction, generating higher revenues should also be part of the policy mix. Restrained public sector wage bill, improved spending efficiency, including rationalization of transfers and subsidies, and containment of aging-related spending are obvious targets for consolidation. At the same time, Aruba should consider tax measures with a view to boost revenues from indirect taxes.

17. Immediate measures targeting improvement of the financial situation of the old-age pension and general health care schemes are needed. Such measures could include a combination of changes to the retirement age, contribution rates and generosity of pension and medical benefits. Given the current level of total contributions and relatively moderate replacement rate, reforms should primarily rely on changing the retirement age and shifting part of the medical costs to beneficiaries.

18. Adopting a well-designed and effective fiscal responsibility framework will contribute to successful fiscal consolidation. Well-designed fiscal rules and monitoring mechanisms to ensure transparency and timely implementation of the budget can help deal with discretionary policy making arising from political expediency. In this regard, the authorities’ intention to introduce a framework consisting of fiscal rules and a fiscal council is a welcome move.


    Schipke, A., Cebotari,A., and Thacker,N. (editors), 2013, “The Eastern Caribbean Economic and Currency Union—Macroeconomics and Financial Systems,”Washington: International Monetary Fund.

    Amo-Yartey, C., Narita,M., Nicholls, G., Okwuokei, J., Peter, A., and Turner-Jones,T., 2012, “The Challenges of Fiscal Consolidation and Debt Reduction in the Caribbean,”IMF Working Paper No. 12/276 (Washington: International Monetary Fund).

    Caner, M., Grennes,T., and Koehler-Geib,F., 2010, “Finding the Tipping Point – When Sovereign Debt Turns Bad,”World Bank Policy Research Working Paper 5391.

    Central Bureau of Statistics of Aruba, 2011, “Census 2010 Paper: Ageing on Aruba,”Oranjestad.

    Eelens, F., 2012, “Population Projections 2010-2030,”Oranjestad: Central Bureau of Statistics of Aruba.

    Clements, B., Coady,D., Eich, F., Gupta, S., Kangur, A., Shang, B., and Soto,M., 2012, “The Challenge of Public Pension Reform in Advanced and Emerging Market Economies,” IMF Ocassional Paper No. 275 (Washington: International Monetary Fund)

    Coenen, G., Erceg,C., Freedman, C., Furceri, D., Kumhof, M., Lalonde, R., Laxton, D., Lindé, J., Mourougane, A., Muir, D., Mursula, S., de Resende, C., Roberts, J., Roeger, W., Snudden, S., Trabandt, M., and in’tVeld, J. (2012), “Effects of Fiscal Stimulus in Structural Models,”American Economic Journal: Macroeconomics 2012, 4(1) 22-68, January2012.

    Greenidge, K., Craigwell, R., Thomas, C., and Drakes, L.2012, “Threshold Effects of Sovereign Debt: Evidence from the Caribbean,”IMF Working Paper No. 12/157 (Washington: International Monetary Fund).

    Kester, G. and Belgrave, A.2011, “Fiscal Multiplier in Microstates: Evidence from the Caribbean,” Published online: 7 December 2011 # International Atlantic Economic Society.

Table A1.Aruba: Indicators of Tourism Activity, 2005-12(Millions of Aruban florins at current prices; unless otherwise indicated)
Total revenue1,9601,8962,1622,4132,1842,2362,4152505
(percent change)4.0-
(percent change, in real terms)0.6-6.614.011.6-
Stay-over visitors (thousands)733694772827813825869904
(percent change)0.6-
Tourist nights (thousands)5,6955,4715,8806,2656,1736,4666,6866,907
(percent change)1.0-
Average stay (nights)
Expenditure per tourist
(Aruban florins)344347368385354
Hotel occupancy rate (percent)83.474.874.672.57274.174.978.8
Cruise tourists (thousands)553591482556607569600582
(percent change)-4.17.0-18.515.49.1-6.25.4-2.9
Sources: CBA, Quarterly Bulletin; Aruba Tourism Authority; CBS; Aruba Hotel and Tourism Association; and the Cruise Tourism Authority.
Table A2.Aruba: Components of GDP, 2005-12(Percent of GDP)
Gross domestic product100.0100.0100.0100.0100.0100.0100.0100.0
Private absorption84.788.187.786.985.387.688.685.9
Private investment 1/32.033.631.331.728.527.227.123.7
Government absorption24.724.222.923.627.228.927.329.9
Investment 2/
Net exports 3/-9.4-12.3-10.6-10.5-12.5-16.5-15.9-15.8
Export of goods and services68.565.966.167.763.861.067.865.4
Import of goods and services77.978.176.878.276.377.683.781.2
Source: CBS.
Table A3.Aruba: Real GDP, 2005-12(Millions of Aruban florins at constant 1995 prices)
Gross domestic product2,9753,0083,0683,0732,7252,6272,7252,692
(percent change)
Private absorption2,8662,9612,9682,8772,5932,4822,5722,453
Private investment 1/1,1231,1501,1701,181972866892765
Government absorption677712728739779756721783
Investment 2/4044465963564475
Net exports 3/-568-665-627-542-647-612-568-544
Export of goods and services2,1642,1032,2102,2471,9301,7331,9831,878
Import of goods and services2,7322,7682,8382,7902,5772,3452,5502,422
Source: CBS.
Table A4.Aruba: Contributions to Real GDP Growth, 2005-12(Percent)
Private absorption12.83.20.2-3.0-9.2-4.03.4-4.4
Private investment 1/
Government absorption-
Investment 2/-
Exports less imports 3/-9.6-
Real GDP growth2.
Memorandum item:
Nominal growth rate4.
Table A5.Aruba: Changes in Consumer Price Index, 2006–12(Annual percentage change)
Total index3.65.49.0-
Food and non-alcoholic beverages5.213.711.24.6-
Alcoholic beverages and tobacco0.911.23.54.6-
Clothing and footwear1.
Household operation1.
Recreation and culture3.
Restaurants and hotels3.
Miscellaneous goods and services2.1-
Aruba (excl. energy-related components)
Aruba (excl. energy- & food-related components1.
United States3.22.93.8-
The Netherlands1.
Real exchange rate index (1995=100) 1/105.4108.0113.4111.3111.8113.1111.5
Sources: CBA; CBS Aruba; CBS Netherlands; CBS Netherlands Antilles; Bureau of Labor Statistics.
Table A6.Aruba: Legal Minimum Wages, 2006-12(Aruban florins per month)
Construction and industry1,3601,4601,5051,5431,5431,5431,605
Household personnel635681702720720720749
Source: Aruban Department of Labor.
Table A7.Aruba: Operational Budget of the Social Insurance Bank (SVB), 2006–12
(Millions of Aruban florins)
Total contributions187.5203.8226.9223.1198.2221.7247.8
Total benefits199.9202.8223.4233.6242.4259.5274.4
Administrative and interest costs-10.3-10.2-10.8-11.6-13.5-13.1-13.9
Administrative costs-11.0-10.7-11.6-11.4-13.2-12.8-13.9
Interest costs0.70.50.7-0.2-0.3-0.20.0
Overall balance-22.7-9.3-7.4-22.1-57.7-50.8-40.5
Old age and widowers and orphans insurance
Administrative and interest costs2.
Administrative costs-2.0-2.1-2.3-2.7-3.5-3.3-3.7
Interest costs4.
Sickness and accident insurance
Administrative and interest costs-12.8-12.7-13.3-12.7-13.8-13.7-10.6
Administrative costs-8.6-8.2-8.9-8.4-9.4-9.2-10.6
Interest costs-4.3-4.5-4.4-4.3-4.4-4.50.0
Severance insurance
Interest revenues0.
Administrative costs-0.4-0.4-0.4-0.2-0.3-0.40.4
(Overall balances, percent of GDP)
Total contributions4.
Total benefits4.
Administrative and interest costs-0.2-0.2-0.2-0.3-0.3-0.3-0.3
Administrative costs-0.3-0.2-0.2-0.3-0.3-0.3-0.3
Interest costs0.
Overall balance-0.5-0.2-0.2-0.5-1.3-1.1-0.9
Old age and widowers and orphans insurance
Administrative and interest costs0.
Administrative costs0.00.00.0-0.1-0.1-0.1-0.1
Interest costs0.
Sickness and accident insurance
Administrative and interest costs-0.3-0.3-0.3-0.3-0.3-0.3-0.2
Administrative costs-0.2-0.2-0.2-0.2-0.2-0.2-0.2
Interest costs-0.1-0.1-0.1-0.1-0.1-0.10.0
Severance insurance
Interest revenues0.
Administrative costs-0.01-0.01-
Memorandum items:
Number of beneficiaries per category
Old age and widowers and orphans insurance15,19316,35517,11317,88018,68419,64720,626
Old age14,11214,58215,31216,08116,88517,77518,756
Widowers and orphans1,0811,7731,8011,7991,7991,8721,870
Sickness and accident insurance33,90131,68235,82035,32129,61530,37028,798
Severance insurance1214718741442512451
Number of insured per category
Old age and widowers and orphans insurance137,146138,206140,242132,312130,004132,088133,826
Old age68,57369,10370,12166,15665,00266,04466,913
Widowers and orphans68,57369,10370,12166,15665,00266,04466,913
Sickness and accident insurance65,82067,88168,96564,80465,93667,26269,736
Severance insurance 1/35,84937,14237,78835,45236,07736,82537,993
Source: SVB.
Table A8.Aruba: Financial Balance of AZV, 2006-12(Percent of GDP)
Other Costs0.
Transfer from Central Govt2.
Primary Transfer2.
Additional Transfer0.
Sources: Aruban authorities; and IMF staff estimates.
Table A9.Aruba: Non-Oil Balance of Payments Summary, 2005–12(Millions of Aruban florins)
Current account-349-612-249-209-4722-365-8
Merchandise trade balance-1,325-1,396-1,392-1,498-1,351-1,256-1,543-1,491
Exports of goods111138133162160214245260
Imports of goods1,4361,5331,5251,6601,5111,4701,7881,751
Exports of services2,3322,3392,6292,8622,7312,7672,9973,140
Imports of services1,0571,2041,1951,2281,1831,1671,2931,378
Of which: Travel and tourism (net)1,5601,5151,7221,9711,7521,8021,9372,017
Income and current transfers-298-352-291-345-244-322-526-279
Current transfers-158-162-143-140-120-116-117-114
Financial and capital account20459730255525-10023896
Financial account171559269274-36-11523294
Direct investment20151322634993-54330177
Portfolio investment41-851097682219258
Loans to general government-6-25-22-45-20-24-18-18
Banking sector (net increase in liabilities)-195485-26-42-8-3327
Other 1/-46102-129-80-75-51-66-350
Capital account333834281611562
Errors and omissions104114245882596331
Change in reserves (-=increase) 2/40-99-77-403-611965-119
Sources: Central Bank of Aruba; and staff estimates.
Table A10.Aruba: Non-Oil Balance of Payments Summary, 2005–12(Percent of GDP)
Current Account-8.4-14.7-6.0-5.0-1.10.5-8.8-0.2
Merchandise trade balance-31.8-33.5-33.4-35.9-32.4-30.1-37.0-35.7
Exports of goods2.
Imports of goods34.436.836.539.836.235.242.942.0
Exports of services55.956.163.068.665.566.371.875.3
Imports of services25.328.828.629.428.428.031.033.0
Of which: Travel and tourism (net)37.436.341.347.
Income and current transfers-7.2-8.4-7.0-8.3-5.8-7.7-12.6-6.7
Current transfers-3.8-3.9-3.4-3.4-2.9-2.8-2.8-2.7
Financial and capital account4.914.
Financial account4.
Direct investment4.812.
Portfolio investment1.0-
Loans to general government-0.1-0.6-0.5-1.1-0.5-0.6-0.4-0.4
Banking sector (net increase in liabilities)-
Other 1/-1.12.4-3.1-1.9-1.8-1.2-1.6-8.4
Capital account0.
Errors and omissions2.
Change in reserves (-=increase) 2/1.0-2.4-1.9-9.7-
Sources: Central Bank of Aruba; and staff estimates.
Table A11.Aruba: Bank-Like Institutions—Balance Sheet, 2005–12(Millions of Aruban florins, end of period)
20052006200720082009 1/201020112012
Cash and due from banks64.348.533.843.759.
Commercial 2/117.1103.9144.5167.1162.3150.1151.0112.3
Individuals 3/296.1316.1329.9328.4323.9319.1318.3318.6
Other assets114.4108.4119.9124.5138.8149.4147.0153.3
Total assets603.9600.6656.1689.3709.0689.7710.4674.4
Capital and liabilities
Other liabilities73.935.734.835.037.231.432.531.3
Capital and reserves 4/206.8210.4235.5249.5270.5287.1300.8317.4
Total capital and liabilities603.9600.6656.1689.3709.0689.7710.4674.4
Source: Central Bank of Aruba.
Table A12:Aruba: Life Insurance Companies—Balance Sheet, 2005–11(Millions of Aruban florins, end of period)
Real estate14.010.310.310.
Time deposits53.764.872.693.7119.2115.199
Mortgage loans72.959.172.689.797.7102.8110.3
Other loans39.941.350.944.045.151.657.9
Fixed assets0.
Due from affiliated companies19.422.520.022.372.749.954.3
Current assets58.564.565.1100.347.1116.0122.0
Total assets451.5492.3550.1618.1708.2789.8842.5
Capital and liabilities
Technical provisions364.6400.9444.3500.6531.4586.6631.2
Long-term liabilities0.
Due to affiliated companies5.05.46.516.817.738.136.3
Current liabilities22.119.023.430.443.839.338.0
Capital and reserves59.867.075.169.2114.3124.8135.9
Total capital and liabilities451.5492.3550.1618.1708.2789.8842.5
Source: Central Bank of Aruba.
Table A13:Aruba: Pension Funds—Balance Sheet, 2005-11(Millions of Aruban florins, end of period)
Real estate10101010131313
Time deposits3641361718168
Mortgage loans14151616181822
Other investments23272829272037
Fixed assets0000000
Current assets21151617203316
Total assets213235255215241263274
Capital and liabilities
Technical provisions182195216194209224247
Long-term liabilities0000000
Current liabilities2224222
Capital and reserves30373618303824
Total capital and liabilities213235255215241263274
Source: Central Bank of Aruba.
Table A14.Aruba: Construction Indicators, 2005–12
Number of construction permits granted1,5841,3031,151962857899786837
Office buildings15222513910910
Stores and shopping malls2534291611231112
Total value of construction permits (Afl. million)283.2525.7447.6670.5343.2488.8299.9442.7
Office buildings10.139.240.911.
Stores and shopping malls17.478.264.429.510.259.522.919.5
Total cement imported (x 1,000 Kg)88,71978,41378,58267,04052,22437,14952,14348,766
Number of electrical installations approved2,7632,4632,1382,2722,0211,5061,5241,598
Sources: Department of Public Works; Department of Technical Inspection; CBS.
Table A15.Aruba: Utilities, 2005–12
Quantity (x 1,000 m3)11,39911,47411,75011,44511,38311,04710,46510,631
Value (Afl. million)82.995.9102.3122.9103.3114.3117.1114.7
Connected premises34,90535,98936,82437,99238,85739,42440,16241,338
Quantity (x 1,000 KWH)759,336761,362781,073764,291773,909789,581771,841759,386
Value (Afl. million)228.2262.8279.3344.1283.4339.1370.6396.6
Number of users36,73737,63038,49539,20739,74340,23840,83741,276
Quantity (x 1,000 pounds)19,13319,27519,97920,48620,51120,39920,88520,773
Value (Afl. million)11.812.615.018.320.520.222.825.0
Commercial users11,71711,88812,62412,99012,85713,05713,39213,894
Utilities index138.9139.4142.9140.1141.1142.6139.2138.3
Sources: WEB Aruba N.V.; N.V. ELMAR; Arugas N.V.
Table A16.Aruba: Housing Mortgages, 1996–12(Millions of Aruban florins, end of period)



Life insurance

Source: Central Bank of Aruba.

Prepared by Vahram Stepanyan. The author is grateful to Aruban authorities for providing data and for helpful discussions.

See, for example, Coenen et al. (2012). For Caribbean countries, some studies show multipliers in the range of 0.1-0.2 (Schipke et al., 2013; Guy and Belgrave, 2011).

Our analysis is based on the medium growth scenario of the CBS’s latest population projections.

Pension reform measures draw on the analysis by Clements et al (2012).

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