Emphasis on political and fiscal stability

St.maarten – Governor Drs. Eugène Holiday put the emphasis on the need for political and fiscal stability yesterday morning in his address at the opening of the 2016-2017 parliamentary year. “Stability is a necessary condition to facilitate public and private investments that are required to strengthen economic growth to meet the socio-economic needs of our people.”

The governor noted that the opening of the parliamentary year takes place thirteen days before the elections and that a new parliament will be installed on October 31. A new Council of Ministers will be formed based on a majority in the new parliament. “Between now and the installation of a new Council of Ministers the government is to continue to take care of the interests of the people,” the governor said, adding that his address will provide an outline of the policy challenges and opportunities for the upcoming year. Last year, the governor outlined the priorities of the government’s policy-intentions for the next twelve months.

The numbers do not look to pretty: the economy is expected to expand by 0.7 percent this year, slightly better than the 0.5 percent in 2015. The governor put his finger on the root cause of the sluggish economy: “The slow growth can in large part be attributed to domestic political fragility and the tempered economic developments in our main trading partner and tourism market, the United States.”

Inflation remains low at 1 percent this year (0.3 percent in 2015). “This reflects low United States inflation and low international energy prices,” the governor said.

Nevertheless, the pressure on social, healthcare and pension systems is increasing, the governor pointed out. This is due to population growth caused by immigration and the ageing of the population.

Unemployment is trending downwards to around 8.7 percent this year, but youth unemployment remains high.

“Low growth coupled with tax compliance issues have left government revenues under pressure, resulting in reduced fiscal space,” the governor said.

Drs. Holiday also addressed political stability, especially legislative reforms to address ship-jumping. A constitutional amendment proposes “to exclude Members of Parliament who declare themselves independent from the political party with which they were elected to parliament from participating in the process to appoint ministers.”

The government has made adjustments to its original draft to address concerns from the Council of Advice and the Kingdom Council of Ministers. “Government intends to present the draft constitutional amendment to parliament for approval within short,” the governor said. “Government considers resolving the issue of ship-jumping of paramount importance for the long-term stability of our country.”

A second constitutional amendment will enable students living abroad to take part in local elections.

To create sustainable budgetary conditions, the government has tightened spending controls, improved the quality and timelines of the budget for greater accountability and prepared plans to invest in the strengthening of the tax administration and collection, the governor said.

Source: Today SXM Emphasis on political and fiscal stability