The Committee for Financial Supervision (CFT) approving of St. Maarten’s intention to compensate for earlier deficits in its multi-annual budgeting (see related story) is significant. The same goes for reserving means to refinance a 73.5 million Netherlands Antillean guilders bond that expires in 2025.
All this is possible because government expects surpluses of respectively NAf. 4, 5 and 15 million in the next three years. It means the country may attract loans to fund investments.
The latter is obviously important, because it has been practically lacking since 2014, according to Finance Minister Ardwell Irion. During his presentation of the draft 2023 budget in March he mentioned a total of NAf. 91 million in capital expenditures for the Ministries of Public Housing, Spatial Planning, Environment and Infrastructure VROMI (48%), Finance (28%), Justice (13%), Education, Culture, Youth and Sport (EYCS) (7%) and General Affairs as well as the others (2% each).
To this must be added NAf. 4.9 million due to an amendment by United People’s (UP) party faction leader Rolando Brison adopted during the meeting to allocate NAf. 2.5 million for intellectual property tourism development and NAf 2.4 million for tourism product development. The current ambition is to invest 1% of gross domestic product (GDP).
CFT also advised including these multi-annual projections in negotiations with the Netherlands regarding repayment of the COVID-19 liquidity loans due in October. The implication is obviously that this should help secure a favourable arrangement.
A word of caution nevertheless seems in order. The calculations assume more income from economic growth, enhanced tax compliance and structural reforms in the so-called country package.
However, already in mid-May many of the related measures and legislation to be reflected starting from this year’s budget via amendments have not yet been realised. It’s one thing to discuss and plan, but quite another to execute in a prompt manner.
The time has come for decisive action.