A conclusion was recently drawn in Willemstad that – after 13 years of existence – the Committee for Financial Supervision CFT had failed. Main point is that Curaçao’s national debt went up from 1.3 billion to 4.2 billion Netherlands Antillean guilders during that time for an increase of NAf. 3.9 billion, equivalent to NAf. 300 million annually.
That argument would normally be more than valid, but there are extraordinary circumstances to consider. The crisis in neighbouring Venezuela leading to a shutdown of the Isla refinery and border closure, followed by the COVID-19 pandemic, and their impact on the economy as well as public finances must be considered.
St. Maarten found itself in a similar “double jeopardy” position due to the widespread devastation caused by Hurricane Irma in September 2017. Borrowing from the Netherlands with CFT’s approval started already then to make budgetary ends meet, and continued with the pandemic.
During the latter this money enabled both the public and private sectors to keep going so most could maintain their job and/or income, just like in the European part of the kingdom. Many cannot even imagine what life would have been like back in those days without that liquidity support.
In addition to the Dutch-sponsored post-Irma Trust Fund, these loans were highly necessary to survive and people should be thankful The Hague made the related resources available, even though they might disagree with the way in which it was done. To blame CFT for allowing such under emergency conditions at the time therefore seems a bit far-fetched.
CFT is probably never going to win a popularity contest among local politicians, who often see it as a form of undesired control by the Dutch government. However, the committee did recently advise against The Hague’s proposal for Curaçao and St. Maarten to borrow another 600 million euros to safeguard the pension rights of 30,000 ENNIA policyholders, precisely because this would raise the debt norm too much.
One could thus say CFT fulfilled its gatekeeper role in that sense.
