St. Maarten’s recovery is strong, but structural vulnerabilities persist, UN says

GREAT BAY--A new United Nations Annual Results Report highlights St. Maarten’s strong recovery from recent shocks, while warning that the country remains highly exposed to climate risk, tourism dependence, income inequality and long-term structural vulnerabilities.

The report, prepared by the United Nations Office of the Resident Coordinator for Trinidad and Tobago, Aruba, Curaçao and St. Maarten, reviews development progress and UN cooperation with the Caribbean constituent countries of the Kingdom of the Netherlands.

For St. Maarten, the report notes that the country’s development path continues to be shaped by the compounded effects of Hurricane Irma in 2017 and the COVID-19 pandemic. Hurricane Irma caused damage estimated at approximately 260 percent of GDP and destroyed or severely damaged more than 90 percent of buildings on the island, making it one of the most severe disaster impacts recorded in the Caribbean.

Reconstruction has been supported through the St. Maarten Reconstruction Trust Fund, administered by the World Bank, which has financed more than US $600 million in recovery and resilience-building projects through 2025.

The report also points to the major economic impact of the COVID-19 pandemic, noting that St. Maarten’s GDP contracted by more than 22 percent between 2020 and 2021 as global travel came to a standstill. The economy rebounded strongly in 2022, with growth reaching 13.9 percent, driven by the rapid return of cruise tourism and the recovery of stay-over arrivals.

While that rebound reflects the resilience of the tourism sector, the UN report states that it also reinforces St. Maarten’s continued dependence on external demand conditions.

Tourism remains the dominant driver of the economy, accounting for approximately 70 to 80 percent of GDP and the majority of employment. The report says this high level of concentration makes St. Maarten especially vulnerable to changes in global travel demand and climate-related disruptions.

Despite relatively high income levels, with GDP per capita estimated at around US $29,000, the report notes that income inequality remains pronounced, with a significant share of national income concentrated among higher-income households.

Migration is also identified as a major factor shaping St. Maarten’s demographic and economic structure. According to the report, migrants account for a substantial share of the population and labor force, supporting key sectors such as construction, tourism and domestic services. At the same time, migration dynamics place pressure on housing, infrastructure and public service delivery, requiring continued policy attention to strengthen social cohesion and equitable access to services.

Climate risk is described as the most significant long-term threat to St. Maarten’s development. The report notes that the island’s location in the hurricane belt exposes it to recurrent and increasingly intense storm events, with average annual losses from climate-related disasters estimated at 4 to 6 percent of GDP.

These risks have direct implications for infrastructure resilience, fiscal sustainability and long-term growth. The report states that sustained investment in climate adaptation and disaster risk reduction will be essential.

The report also links St. Maarten’s fiscal outlook to these structural vulnerabilities. Public debt increased significantly after Hurricane Irma and the pandemic, reflecting reconstruction needs and revenue losses. While the debt outlook is expected to improve gradually over the medium term, the report says maintaining sustainability will depend on continued fiscal discipline, stable tourism revenues and effective management of climate-related contingent liabilities.

According to the UN, strengthening fiscal buffers and improving access to concessional and risk financing instruments will be critical to improving resilience.

The report’s St. Maarten SDG mapping identifies four major bottlenecks: social vulnerability and human capital gaps, governance and institutional constraints, economic fragility and recovery, and climate risk and environmental pressures.

Under social vulnerability, the report points to the high cost of living, pressure on the health system, learning losses, skills gaps, youth unemployment, informality, gender-based violence and social exclusion.

Under governance, the report identifies fiscal constraints, debt sustainability concerns, institutional capacity limitations, data and monitoring gaps, and limited access to concessional finance.

Under economic fragility, the report highlights over-reliance on tourism, limited diversification, constraints faced by micro, small and medium-sized enterprises, and infrastructure gaps.

Under climate and environmental pressure, the report points to hurricane exposure, coastal erosion, flooding, water stress, waste management challenges and the loss of marine and terrestrial biodiversity.

The report identifies several priority accelerators for St. Maarten’s development path, including diversification of the economy, innovation and digitalization, stronger disaster risk management and climate adaptation, investment in health, education, skills and inclusion, stronger governance and public financial management, and the mobilization of partnerships and innovative financing.

The United Nations also highlights areas of support relevant to St. Maarten, including institutional strengthening, data and analytical support, justice sector reform, migration governance, disaster risk management and climate resilience.

In 2025, the report notes that UN expenditure in St. Maarten was largely concentrated on peace, justice and rule of law priorities, with the St. Maarten Rule of Law Facilities project accounting for US $6.47 million in expenditure. Excluding that project, St. Maarten’s executed UN resources amounted to US $158,000.

The report further notes that UNESCO established a Cultural Emergency Response Sub-Hub in Philipsburg in June 2025 to strengthen disaster preparedness for cultural heritage assets across St. Maarten and neighboring territories. This initiative is intended to improve coordination among heritage organizations and disaster management agencies before, during and after crises.

Looking ahead, the UN states that St. Maarten’s future development will depend on reducing vulnerability while supporting more inclusive growth. This includes investment in climate-resilient infrastructure, integrated disaster risk management, economic diversification beyond tourism, stronger social protection and labor market inclusion, and improved access to innovative financing.

The report concludes that St. Maarten’s recovery shows resilience, but that long-term progress will require sustained action to strengthen institutions, protect communities from climate and economic shocks, and ensure that growth benefits more people across society.

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