Circular business strategies and supply chain finance in the Aruba waste sector : a case study of a small island jurisdiction

Abstract

This paper focuses on possibilities and obstacles for a circular economy in the waste management sector in Aruba. The authors describe the Aruban economy and the consequences of its SIDS characteristics. The article defines concepts in the field of circular economy and presents a conceptual model for research in this area. Based on multimethod research, the paper argues that small and medium-sized firms (SMEs) in the waste sector in Aruba determine their financial needs partly on the opportunities offered by the international market and price developments. Financing often takes place from own resources or via a local bank. No examples of circular chain financing were identified. Chain cooperation takes place with partners within the existing holding or with international partners, whereby performance and hedging contracts are concluded to guarantee quality and delivery and to mitigate business risks such as price fluctuations on the world market. During the research, it became obvious that limitations resulting from Aruba’s small scale and ‘islandness’ – such as the limited goods flow, limited quantities of feed waste materials and financing facilities offered by the local banking sector, as well as insufficiently stimulating legislation and regulations, coupled with faltering knowledge circulation and social awareness – seriously hamper the development of circular entrepreneurism in Aruba. The article offers policy recommendations to mitigate the bottlenecks for sustainable development in Aruba.