Aruba may be congratulated with its second tranche of liquidity support from the Netherlands to deal with the COVID-19 crisis (see related story). Not that there is anything to celebrate in the middle of an unprecedented pandemic.
Severe austerity measures being taken by the Dutch Caribbean country will affect many persons in the public sector. The business community has already taken a huge blow, making payroll support to a maximum of 60 per cent funded from the received soft loans indispensable to prevent widespread closures and mass layoffs, with all possible social consequences.
The Wever-Croes Cabinet realises full well that it will be some time before the island’s one-pillar tourism economy even partly recovers. Continued financial assistance has thus become a matter of short-term survival for the population and conditions set for such by The Hague must be met.
The Council of Ministers reduced their salary by 20 per cent and Parliament by 25 per cent. Government-owned company directors are also taking a pay cut of 20 per cent and their personnel one of 12.5 per cent, along with employees of subsidised entities.
St. Maarten is in pretty much an identical position and has come up with a “solidarity initiative” to lower salaries of ministers and parliamentarians by 10 per cent, while a motion was passed to cut another 5 per cent. The latter also mentions comprehensive spending cuts and a 20 per cent reduction in material cost of the Council of Ministers and Parliament.
Other savings are reportedly being worked on but have yet to be specified. It seems obvious more will be needed, however, to achieve the same kind of swift approval Aruba just did.
