Minister of Home Affairs and Kingdom Relations Raymond Knops (centre) speaking with journalists John Samson of NTR Caribbean Network (left) and Otti Thomas of the Amigoe newspaper after Friday’s Kingdom Council of Ministers meeting. (Suzanne Koelega photo)
THE HAGUE–The Netherlands remains committed to helping the Dutch Caribbean countries, but not unconditionally. “We will not abandon the countries. But that is something else than saying, we will pay all your bills,” said Minister of Home Affairs and Kingdom Relations Raymond Knops on Friday. The countries can get loans, but will have to make sacrifices as well.
In the coming weeks, the Kingdom Council of Ministers will take decisions on the extent of acute liquidity that will be provided to Aruba, Curaçao and St. Maarten in the form of loans. In the next two weeks at least, on April 3 and April 9, the Kingdom government will gather prior to the regular Dutch Council of Ministers meeting to discuss the situation in the Dutch Caribbean countries.
“We will see how we can accommodate the requests for assistance by the countries and under which conditions,” said Knops after Friday’s meeting of the Kingdom Council of Ministers. He explained the requests will first be assessed by the Committee for Financial Supervision CFT after which the Kingdom government handle the proposals.
On Friday, the Kingdom government approved a deviation of the budget norm compliance as stated in the Kingdom Law Financial Supervision for Curaçao and St. Maarten, and the Aruba Financial Supervision Law.
The Kingdom Council of Ministers decided this based on the advice of the CFT. The financial supervision laws for the three countries allow a temporary division under exceptional circumstances. A similar exemption was made for St. Maarten after Hurricane Irma late 2017 when complying with the balanced budget requirement proved impossible.
A distinction will be made between the short term and the middle-long term. On the short term, the countries require acute liquidity support, which will be provided in loans. On the middle-long term, the countries will have to carry out a reform exercise, cut expenditures and increase revenue.
Sacrifices will need to be made and the governments have to become leaner and meaner. Broad reform is necessary to prevent the countries from again ending up so vulnerable in the next crisis, be it caused by a ruthless virus such as this one or, in the case of St. Maarten, a major hurricane.
All countries within the Kingdom are dealing with the same crisis, caused by the COVID-19 virus. But the difference is that the Netherlands in the past years has tightened its belt, implemented drastic austerity measures and increased taxes.
“Our point of departure is that, naturally, we are willing to help others, especially in acute situations, but that is not unconditional, because it concerns Dutch taxpayers’ money. In the past years we too have asked our people to make sacrifices. We too have to take this out of our capital position and our national debt will grow,” said Knops.
The Minister noted that the debt quota of the individual Dutch Caribbean countries is high. “Whether you are big or small, you have to make sure to keep your debt quota under control. That you have solid government finances. These things are especially important if you want to cope with a situation such as this one.”
Knops said that the need to start preparing for broad reform was discussed with the Prime Ministers of Aruba, Curaçao and St. Maarten during a video-conference on Thursday. Diversification of the economy is something that the countries need to work on as well. “The islands depend too much on one sector, tourism, which has now collapsed. Don’t only focus on tourism. Diversify and make sure that when something like this happens again, you are more robust.”
The Kingdom is committed to provide assistance, not only financially, but also in areas like medical care and Defence. “We will look at the entire picture on how to assist. We will not abandon the countries, but that is something else than saying we will pay all your bills in the coming months.”
Source: The Daily Herald https://www.thedailyherald.sx/islands/countries-can-get-loans-but-sacrifices-must-also-be-made