The St. Maarten Hospitality and Trade Association (SHTA) has a point (see related story). More than doubling the licence fee for foreign exchange transactions by it claims 170-180 per cent to solve the Girobank crisis in Curaçao is extremely ill-advised.
Although the troubled commercial bank was under supervision of the Central Bank of Curaçao and St. Maarten (CBCS) it was not active in St. Maarten. There are thus probably few local large accountholders at risk of becoming victims.
More importantly, while the Netherlands Antillean guilder may rule the streets of Curaçao, in practice it’s the US dollar for St. Maarten. The existing one per cent licence fee is seen here as a penalty for using the predominant currency.
Whether SHTA’s call on the current and future finance ministers to take a stand against the plans reportedly now being made in Willemstad has any effect remains to be seen. Keep in mind that revenues from the levy would go up for both governments.
How much is not entirely certain, because it can also drive business, for example, to the French side, like what happened in the past with a gasoline excise tax hike. As argued by the employers’ organisation, the added cost will be passed on to the consumer and reduce spending power with the island’s recovery from devastating Hurricane Irma still fragile.
If the measure is needed it should be limited to Curaçao where the problem occurred. In case that’s not possible they must think of something else rather than jeopardise the continued revival of the island’s tourism economy that is already hard enough.
Sharing a monetary union does not mean the illnesses and remedies for its partners are always the same. While Curaçao has recorded continued economic decline, St. Maarten again experienced at least a bit of growth, which – also in the interest of the joint balance of payments – is something to be treasured instead of undermined.