There was actually some good news from the Central Bank of Curaçao and St. Maarten (CBCS) to report this week. It was announced that St. Maarten will be receiving NAf. 10 million in dividends following the approval of the bank’s 2015 financial statements.
The income is one of the benefits of remaining part of a monetary union with a shared Central Bank and joint Antillean guilder. The Government in Philipsburg also receives proceeds from the one per cent licence fee that resident account holders are charged every time they take up US dollars on the Dutch side.
However, if the people involved didn’t have to pay that levy the money would go back into the economy, proponents of dollarisation argue. In addition, there would be no need for a big, costly Central Bank, but rather a small “lean and mean” agency to supervise the local financial sector and serve as monetary council.
Some see as perhaps the biggest advantage a lack of monetary financing, so that governments can in principle spend only what they earn. Taking into account the budgetary difficulties confronted since 10-10-10 they might have a point.
Of course, if only one country opts for dollarisation, maintaining the union would appear to make little sense. While some in Curaçao do favour switching to the US currency, it’s a politically more sensitive issue there.
The recent problems at CBCS certainly should not be used as excuse to now suddenly want to get out, but with the US dollar already the preferred currency in St. Maarten it does seem like something still worth considering in the long run. Although he has been and continues to be the subject of much controversy, the fact that CBCS President Emsley Tromp as “guardian of the Antillean guilder” also believes in dollarisation nevertheless says a lot.
Source: Daily Herald
Still worth considering