Aruban Prime Minister Evelyn Wever-Croes provided clarity on what will happen with debts incurred by the three Dutch Caribbean countries to cope with the COVID-19 crisis that are due in October (see related story) after she and Finance Minister Xiomara Maduro visited The Hague. These are not going to be forgiven, but can be refinanced.
However, this won’t be at zero interest like the liquidity support was. The Netherlands wants a higher rate than the 2% to 3% it pays. While the exact amount is not yet known, Aruba has started exploring other alternatives on the international market.
There was no mention of potential terms, which is an important aspect. In how many years any new loan needs to be serviced obviously makes a big difference.
St. Maarten with 294.4 million Netherlands Antillean guilders owes less than a third of what Aruba (Afl. 915.5 million) and Curaçao (NAf. 911 million) do. However, considering the local economy’s size this constitutes a significant burden.
There is seemingly little choice but creating enough room in – still balanced – government budgets to cover payments going forward. In addition, the resilience of both public and private sectors must be improved to better withstand similar external shocks in the future.
Doing these things at the same time is a tall order, mind you, especially since supply issues and inflation caused in part by the war in Ukraine following the pandemic worsened an already bad situation. Under the current circumstances, to generate more revenue for the national treasury without this becoming counterproductive, strengthening the dominant hospitality remains essential.
As all involved should realise, that will take investments and funding, including more for marketing and promotion. One simply can’t have the cake and eat it too.
