Extension of COVID-19 pandemic-related loans for Curaçao, Aruba and St. Maarten due April 10 (see related story) is good news. The Kingdom Council of Ministers RMR understood that the Dutch Caribbean countries are unable to start paying these back, as they have not sufficiently recovered yet from the COVID-19 crisis that included travel bans, testing and quarantining mandates, lockdowns and other restrictions on movement, which severely impacted their tourism economies.
A positive development is the islands apparently doing well enough again in terms of public finances not to need liquidity support for both the first and second quarters of this year. However, all three have significant deficits on their 2022 budgets and probably will require more during the last six months also due to the low season.
It does not mean either that they can get away from the “country packages” of restructuring measures to be overseen by the proposed Caribbean Body for Reform and Development COHO. These were agreed on with the Netherlands as condition for monetary assistance already received.
Another requirement of a 12.5 per cent (12.6 per cent for Aruba) cut in benefits for civil servants and at government-owned or -funded entities is something the three Dutch Caribbean countries feel should now – at least gradually – be eliminated. A lot will no doubt depend on results of the coming months, when the war in Europe and its global effects could play a negative role too.
Nevertheless, the 18-month extension on its loans totalling 292.4 million Netherlands Antillean guilders in any case affords St. Maarten some welcome breathing room. Prudence remains the order of the day though, especially since the Committee for Financial Supervision CFT earlier this month warned that restoration of cruise and stayover tourism during the second half of 2021 was not reflected in tax earnings and urged better fiscal compliance.
In addition, if government continues to work with The Hague and make the necessary adjustments to get through this still-difficult period ahead successfully, it is not unthinkable that the previously mentioned amount in debt could be forgiven, as Member of Parliament (MP) George Pantophlet has been calling for.
