Curaçao: Nether-Netherlands by Richard Newton

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The ‘swinging old lady’ lets the Venezuelans in each morning. They arrive in wooden boats from the South American mainland, 35 miles away, and cast Curaçao a daily lifeline. Later in the day, the Queen Emma Bridge will swing open many more times as the oil tankers and cruise ships which are so vital to the economy of this Caribbean island slip in and out of port. But, it is the Venezuelans who meet Curaçao's most basic need. Without the supplies they bring, Curaçaoans would starve for fresh food.

Italian explorer Amerigo Vespucci was unimpressed when he set foot on the island in 1499. Finding its barren interior to be good for little more than cacti, he described it to his Spanish masters as ‘isla inútil’ - useless island. The passage of time has made a nonsense of that verdict. Although it is without natural resources other than salt deposits - even fresh water is scarce - modern Curaçao has achieved the highest standard of living in the Caribbean.

Much of Curacao's success can be attributed to its geography. In effect, this strategic island is a 40-mile-long storm barrier. Whilst the rugged northern coast absorbs a perennial battering from the sea, the southern shoreline is sheltered and calm, with sandy beaches and natural harbours. History has shown it to be an ideal staging post for intercontinental trade.

In 1634, recognising Curaçao's potential, the Dutch West India Company sent a battalion of soldiers to seize the island. It fell without a fight, inhabited, as it was, by a few hardy Spanish ranchers and an indigenous population of Arawak Indian fishermen (whose presence here can be traced back to 2450 BC; the earliest evidence of human settlement in the Caribbean). Under the leadership of Peter Stuyvesant, who was destined to become governor of New York, Curaçao evolved into the region's premier slave depot.

The effects of the slave trade persist. Eighty per cent of Curaçao's current population is of African descent, and the lingua franca is Papiamento, a lilting blend of European, African, and South American languages.

On foundations of slavery and smuggling, a city was built at the mouth of Curaçao's prime harbour. For a city constructed with tarnished money, Willemstad projects a surprisingly civilised air. Ornate buildings line both banks of Sint Annabaai, the canal-like channel leading into port.

Willemstad is the seat of government for the Netherlands Antilles, a disparate group of five islands linked by their colonial past. Curaçao and Bonaire are tucked close to the Venezuelan coast; Saba, Sint Eustatius and Sint Maarten lie 500 miles to the north-east. This scattered federation is an autonomous region of the Netherlands, with the mother country retaining responsibility only for the islands' defence and foreign affairs.

The Dutch influence runs deep. The first glimpse of Willemstad from Sint Annabaai jolts newcomers to a city half a world away. The undulating rooftops of the thin eighteenth century buildings leave you in little doubt: this is Amsterdam-in-the-Tropics. Pastel colours enliven the staid elegance of the Old World. Willemstad's vivid complexion - all blues, and yellows, and pinks - is the legacy of Albert Kikkert, who, as governor in 1817, complained that the glare from white buildings gave him a migraine and ordered his subjects to literally paint the town.

The bright facades of present-day Willemstad conceal the dark secrets of offshore finance. Curaçao provides a flag of convenience for numerous international banks and corporations, and the 'Dutch sandwich' - a complex money laundering scheme involving banks in Paris and Rotterdam - is one of the island's specialities.

According to one multinational bank’s money-laundering detective, it is relatively easy to slip large suitcases of cash into the island. The cash is paid into a local account and then invested in an offshore company via another bank in, say, Rotterdam. From there it is reinvested in a trail of other companies, ultimately ending up in an account in Hong Kong or Panama, by which time the tracks leading back to the original cash deposit are practically impossible to decipher.

Although a tightening of international regulations in recent years has had an impact on Curaçao's status as a financial haven, shady deals continue to be conducted here. Curaçao corporations control a third of all foreign-owned farmland in the United States and have provided the backing for numerous Hollywood blockbusters.

Whilst offshore finance has boosted Curaçao's coffers, it is not the most important source of income. After the abolition of slavery in 1863, the island's economy balanced precariously on the manufacture of Panama hats and on the wages sent home by Curaçaoans employed elsewhere in the Caribbean. Then, in 1915, Royal Dutch Shell established a refinery in Willemstad to process Venezuelan crude oil, and the island acquired a new vocation.

Oil tankers now loom off the southern coast like rusty islets, awaiting their turn to squeeze through Sint Annabaai to one of the largest oil terminals outside the Middle East. The black sludge from Venezuela is processed into a variety of petroleum products. Imports and exports flowing through the sprawling Willemstad refinery account for eighty-five per cent of Curaçao's GNP.

Tourism is the island's second biggest earner, coexisting uneasily with the oil industry. For the burgeoning tourist resorts lining the southern beaches, the perpetual procession of oil tankers is a constant concern. One spill would change everything.

For now, each Willemstad day is drowsily ticked away by the metronomic movements of the Queen Emma pontoon bridge, which spans Sint Annabaai. In the coolness of early morning, the Venezuelan ketches tie up close to the town centre, tip their sails across the sidewalk to provide shade, and establish a floating market.

Initially, the streets belong to the islanders. By mid-morning, affluent cruise ship passengers join the scene, briefly trawling the designer boutiques and duty free shops before sailing on to Aruba or Bonaire. At dusk, the Venezuelan flotilla departs and pink-faced beach tourists shuffle into town. The beat of the nightclubs pulses into the early hours.

Few visitors venture inland to experience the tough reality of this seemingly benign island. Away from the palm-swaying coastline, Curaçao remains as Amerigo Vespucci found it: starkly arid. Lying outside the hurricane belt, it receives little rain and must rely on the largest desalination plant in the world to quench the thirst of its population of 150,000. The parched earth is so unyielding that it even affects the dead, who must be interred above ground.

An unlikely side effect of the harsh conditions has been the evolution, from an original crop imported from Seville in the sixteenth century, of a sour orange called laraha. The rind of this shrivelled fruit is used in the production of the famous Curaçao liqueur, which is exported worldwide. Curaçaoans have always known that success can be distilled from the most unpromising of ingredients.