St. Maarten and the Netherlands having reached agreement after all regarding continued coronavirus-related financing (see related stories) is a reassuring thought going into the Christmas holidays of an extremely difficult year. Without such, the immediate socioeconomic future would have realistically looked very grim.
A third tranche of 61.2 million Netherlands Antillean guilders in pending liquidity assistance is to cover the period through December 31 including payroll and income support. This prevents widespread business closures, mass layoffs and raging unemployment, with government unable to meet its obligations and abject poverty as result.
The Kingdom Council of Ministers also agreed to extend a NAf. 49.9-million bullet loan that was due and issue one of 15 years, 0 per cent interest and a three-year grace period. In addition, considering the estimated cash shortfall an advance of NAf. 8.7 million for the first six weeks of 2021 will also be granted on the fourth tranche of soft loans.
A decision about the latter is to be taken on February 12, again with possible new requirements. Some of the conditions set by The Hague so far have no doubt been experienced as tough, but under these unprecedented circumstances there is no feasible alternative.
It is a matter of survival until the dominant hospitality industry fully recovers, including the part catering to cruise tourism. That probably will not be the case before the end of next year.
But the goal is clearly to take structural measures that make public finances healthier and the private sector more resilient. This translates to – among other things – lowering cost but also making available a maximum 15 million euros for better financial management and modernisation of the tax office, obviously to enhance fiscal compliance and increase revenues.
Another 2.7 million euros will go to further strengthen border control by the Royal Dutch Marechaussee and Customs, while 30 million euros is to be invested in a new prison. That will address a huge adequate-detention-facilities problem plaguing the country already for some time to the point where high bills are paid to house inmates in the Netherlands or on one of the other islands.
All this comes at a price, of course, especially for local politicians, who apart from seeing their own salaries cut must accept a leading role of the Caribbean Reform and Development Entity COHO, which – no matter how you look at it – will have a big say in how the money is ultimately spent. In that sense, the people’s elected representatives and ministers they appointed need to simply “take one for the team.”
