Aruba as an International Financial Center? A diversification strategy for the economy of Aruba

Feliciano, Cheryl S. (2010) Aruba as an International Financial Center? A diversification strategy for the economy of Aruba.

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Abstract:The purpose of this study was to investigate the extent to which Aruba meets the key factors of an international financial center (IFC). The attempt of diversifying Aruba’s economy by becoming an IFC is not a new one; in fact this has been an attempt of more than two decades. However from early stages of this assignment it became clear that becoming an IFC in the traditional sense would not be a possible option for Aruba. The literature review made distinctions between IFCs and offshore financial centers (OFCs), indicating that Aruba’s efforts should be directed in the latter category. Therefore this assignment’s objective is an effort to understand the shortcomings of Aruba’s current situation, by assessing it against key factors of OFCs. To fully comprehend the reasons for the shortcomings a deductive approach was taken. The first step was to identify key factors through a literature study, which resulted in the identification of five key factors. These were consequently assessed against Aruba’s current situation, resulting in the detection of Aruba’s shortcomings with regard to the key factors. To gain further insight into these shortcomings, a cause and effect analysis was executed. The analysis revealed common denominators present in Aruba’s current situation which result from several faulty mechanisms present that prevent Aruba from meeting all the key factors of an OFC today. The analysis revealed common denominators which frequently presented themselves throughout the analysis of each shortcoming. The frequency in which these appear confirm their role in the shortcomings and represent problems that exist in Aruba’s current situation. The common denominators identified were namely, government agencies that mainly focus on own objectives, shortage of qualified personnel on various fields, a lack of knowledge when it comes to future developments due to a lack of planning. In turn these point towards a combination of Aruba’s history and culture which resulted in the way things are done today. However, the scope of the assignment only permits and offers solutions regarding Aruba’s OFC. Therefore, remedies suggested focus on meeting the key factors of an OFC, instead of attempting to solve all problems in Aruba’s current situation. With its existing products and services in combination with stakeholders taking part of the existing process, Aruba already has a basis for its further development as an OFC. Therefore the first step would be to develop and execute a strategic plan, focusing on objectives considered to be important. These objectives include, increase the availability of professionals to fulfill the need on various fields, enhance the communication and collaboration between stakeholders to avoid the loss of information and other essential resources and transparency with regards to objectives to minimize trust issues between stakeholders. These objectives are considered essential in addressing the shortcomings identified in order to fulfill all the key factors of an OFC. The limitations that presented themselves during the assignment were the lack of data concerning some aspects of the key factors in Aruba’s current situation. Therefore some of the aspects that initially formed part of the key factors could not be assessed. However the remaining aspects of the key factors give sufficient depth to represent Aruba’s shortcomings. Overall the thesis offers remedies which can be utilized to improve Aruba’s current situation towards the key factors of OFCs. Additionally recommendations are made for the future development of Aruba’s OFC industry. These remedies and recommendations can be useful for the stakeholders involved, shedding light on their particular role in the industry’s further development.
Item Type:Essay (Master)
Clients:
DEACI, The Department of Economic Affairs, Commerce and Industry of Aruba
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:Business Administration MSc (60644)
Link to this item:http://purl.utwente.nl/essays/60081
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