Dear Editor,
The exchange rate between the US Dollar and our Guilder is fixed for years. For every US Dollar you can get approximately 1.80 Guilders in exchange (or a little less). This exchange rate between both currencies can only continue when the economy and the thereto related money flow is in a balanced pattern, meaning a certain balance between money coming into the Country, money going out of the Country, and the financial reserves of the Country (and the Central Bank of Curaçao and Sint Maarten). Or better in this case, two countries, Sint Maarten and Curaçao, because Sint Maarten and Curaçao have a monetary union.
This is nice as long as there is some balance and harmony in the economy. But the risk now is: Curaçao is not really doing well. It is not Curaçao to blame fully, because it has no influence on the outside negative developments (Venezuela) causing financial problems for Curaçao.
But it might cause the Central Bank of Curaçao and Sint Maarten to consider soon the need to change the exchange rate between our Guilder and the US Dollar. In such a case one dollar for example might be two guilders, instead of 1.80. More guilders for one dollar seems nice but it is not, because a lot of people get their salary paid in guilders. And if the price is in US Dollar or is based on the US Dollar (because a lot of import must be paid in US Dollars) you have to pay more guilders to get the product you want, meaning that the products get more expensive.
We have seen this scenario of devaluation happen in Suriname three years ago, and we could see that because of the new exchange rate between the Surinam Guilder and the US Dollar the products became way more expensive there (because imported goods are based on US Dollars), and we are not talking about a small percentage. It is one of the reasons we see way more people from Suriname trying to get a job over here than in the past.
Please decision makers of Sint Maarten, consider the pros and cons of us being in a monetary union with Curaçao, but consider also seriously the pros and cons to dismantle this monetary union, quit with the Guilder and dollarize as soon as possible.
Geert van der Leest
