~ Interim NRP sees US $815m funding gap ~
POND ISLAND–Government “cannot agree to have the Dutch Government take over a responsibility that belongs to St. Maarten,” Prime Minister William said in response to the Dutch beefing up border control as a prerequisite for recovery aid.
“Current arrangements, among which the flex pool with the Royal Marines, ensure a joint and efficient border control,” said Marlin in a letter dispatched to Dutch Minister of Interior Affairs and Kingdom Relations Ronald Plasterk on Friday. Therefore, there is “no need to introduce new measures.”
“Should this be necessary and needed, support is welcomed. Support should, however, be done within the limits of the existing legal regulations, considering the statutory powers and responsibilities of Country St. Maarten,” Marlin said in response to an October 13 letter from Plasterk outlining the conditions the Dutch Government wants met before recovery funds are released to St. Maarten’s Government.
Marlin said Plasterk, in his October 13 letter, had expounded on the willingness of the Dutch Government to assist, “while elaborating on the conditions that, according to the Government of St. Maarten are unrelated to either the recovery or the reconstruction.”
“The actual details on the financing are, however, lacking in his letter,” Marlin further stated.
Based on the lack of details, Marlin said in his response: “It is essential to know what the detailed specifications of the financing entail, among which: what is the total amount that will be made available, for which specific purposes the available funds can be used, which part is a grant and which part is a loan.”
Government “remains resolute in her position of open communication between the two countries,” said Marlin, adding that the recovery and reconstruction are “of such importance” that government is “prepared to send a delegation” to the Netherlands “in the near future for administrative deliberations.”
Marlin concluded his letter with: “At the end of the day it is about the process for a better future of our country taking into consideration the needs of our population.”
While the debate rages on about whether the Dutch conditions are acceptable, the interim report of the National Recovery Plan workgroup states that there is an estimated funding gap of US $815 million. This is based on information available on damage assessment.
The report states that insurance payments are expected to total US $785 million. The investment individuals and businesses are likely to make to “build back better” is estimated at US $200 million.
“Given the current estimated damage of US $1.8 billion, a funding gap of US $815 million remains,” according to the report.
“Without external financial funding, Government must provide funding to strengthen security, clean up the island, repair and upgrade schools, reconstruct community housing and facilitate fiscal incentives to stimulate the economic recovery,” the report further added. “Funding on such a scale will create structural budget deficits for the foreseeable future.”
The alternative to public financing (and the resultant budget deficits) is a slower recovery spanning several years and the potential for unacceptable social and economic consequences, the report cited. With a national budget of NAf. 478 million (US $266 million) for 2017, St. Maarten’s ability to contribute is “limited.”
Due to the expected loss in revenue for the remainder for the fiscal year 2017, Government expects a budgetary shortfall of approximately NAf. 156 million, according to the report. “As such, a temporary exemption from the requirement to maintain balanced public budgets would be necessary for Government to fund various recovery incentives.”
Such an agreement, the report pointed out, would have to be reached with the Kingdom Council of Ministers in keeping with Article 25 of the Kingdom Law on Financial Supervision for Curaçao and St. Maarten.
The Dutch Government, to date, has provided emergency response aid in the form of equipment and manpower at no cost to the local Government. However, going further, The Hague wants concrete assurances for the shelling out of funds for the rebuilding of the country following from the devastation of Hurricane Irma on September 6. Aside from more say in border control, the Dutch have called for the implementation of the long-talked-about Integrity Chamber.
The St. Maarten Government sent a copy of the interim report to the Dutch government.
On October 1, Government requested an extension from the Dutch Government on the deadline for establishing the Integrity Chamber, because October 31 was “no longer realistic due to the catastrophic impact of hurricane Irma and the necessary shift in priorities first towards emergency, followed by recovery.” The Dutch have not yet responded to this deadline extension request.
Although the deadline was “not a realistic and feasible deadline,” Marlin said Government “will remain committed to finalising the process as soon as possible.”
The draft legislation on the Integrity Chamber was approved by the Council of Ministers the weekend before Irma struck and forwarded to the Council of Advice for its input.
Government considers it “self-evident that there are conditions related to the Dutch financial contribution in terms of checks and balances.”
Marlin said this aspect was added in an October 11 letter to Dutch Prime Minister Mark Rutte. That letter pointed to the preparatory work Government has put in place “to ensure an effective recovery and reconstruction by means of a programmatic approach” as outlined in the interim report from the National Recovery Plan workgroup.
Establishing an Office for Recovery and Reconstruction tasked with managing the implementation of the initiatives, projects and programme, combined with “a system of controls that will include public tenders, monitoring and evaluations to ensure proper spending of Dutch funds” were proposed to the Dutch as guarantee of transparency and accountability, Marlin said.
It was even proposed to have the Dutch Audit Chamber audit the projects funded with Dutch financing, according to Marlin’s press statement.
Also in the letter to Rutte, Marlin called for the local and Dutch Governments “to jointly discuss the coordination of priorities of the recovery and reconstruction of St. Maarten and the Dutch preparedness for (financial) assistance.”