No time for balanced budgets

Extraordinary times call for extraordinary actions. The government of France is making 45 billion euros available to deal with the effects of the coronavirus. It would have been prudent and humane to allow the 14 African countries who are paying the French colonial tax to keep these funds to mitigate their own financial challenges attributed to this outbreak. We are talking about $550 billion that is taken out of these countries on an annual basis.

  The United Kingdom is providing 12 billion euros for similar situation.

  Our Prime Minister Silveria Jacobs said that the corona outbreak could impact St. Maarten worse than Hurricane Irma. This is very sobering news indeed. After the passing of Hurricane Irma insurance pay-outs helped businesses and persons who were insured, others used their savings, banks gave delayed mortgage and other payments to qualified businesses and or individuals. But this COVID19 falls under a completely different category.

  In my opinion, because of this dilemma where the budget is concerned, St. Maarten should not have to adhere to the entire article 100.2 of the Constitution which states, and I quote, “The annual budget and the long-term budget shall be balanced. If necessary in connection with the recovery of damage caused by exceptional events, including natural disasters, departures from the first sentence are possible in accordance with rules issued pursuant to a Kingdom Act or national ordinance.”

  It is no doubt that we are going to face serious financial consequences caused by COVID19, being that some 80 per cent of our income is tourism-based. The drastic drop in airlift, cruise tourism, our main economy drivers, are already being affected. Economic activities have been seriously disrupted.

  The reason for mentioning article 100.2 of the budget not being complied with has to do with the following: It will mean urgent financial expenditures that will have to be made by St. Maarten’s government on short notice will require based on this article the approval of the Kingdom Council of Ministers; it will mean complying with article 25 of the Kingdom Law to establish the Committee for Financial Supervision which means we have to get permission from the Kingdom Council of Ministers before incurring a budget deficit. This method will be a serious obstacle to government carrying out her social responsibilities as outlined in articles 18 to 21 of the Constitution.

  The Kingdom Charter, although applicable to all 4 countries, gives the Netherlands the authority to take unilateral and final decisions regardless of the consequences to St. Maarten and its residents. The process laid down in the Kingdom Charter articles 15 to 22 are a clear indication of such. The present experience with the Dutch-imposed condition of the World Bank is proof enough.

  This is no time for setting conditions or following laws that put the lives of our people at risk. I am not confident based on our present experience after the passing of Hurricane Irma in 2017 that the Dutch government will have a change of heart. While they might say they are facing similar or worse consequences, they have a surplus and we don’t. Conditions are attached to the 50 million liquidity funds. This COVID19 is not only a healthcare cost but it is affecting every aspect of society.

  President Trump said that they will have to help the airlines and the citizens with a relief package. The Federal Reserve has cut interests rates on several occasions within the last month. In essence the entire world will face serious financial, social and economic challenges.

  I am pleased that our Prime Minister has made contact with stakeholders. I am sure the Central Bank of Curaçao and St. Maarten, the Banker’s Associations of both islands, the Chambers of Commerce, foundations, unions, the Prime Ministers of the Dutch Caribbean countries and the Ministers of Finance and Economic Affairs of the countries are holding frequent meetings to address this disaster. It should be a collective effort.

  Again, please follow the prescribed instructions given by our Prime Minister because these are based on information from local, regional and international experts.

 

George Pantophlet