The Dutch Government has offered St. Maarten a 50-million-Antillean-guilder loan with no payments in the first five years to shore up its liquidity position. Part of the deal is NAf. 21.7 million earmarked for capital expenditures in 2017 that will now be used to help cover the budget deficit.
In announcing the news, Financial Supervision Committee CFT Chairman Raymond Gradus emphasised how important it is to get the economy going again. Still, with most major resorts closed it will be difficult at best.
Hopefully the projects that are to be funded from the half-a-billion euros in recovery assistance made available by the Netherlands via the World Bank can indeed help compensate for the crippling blow Hurricane Irma dealt to the dominant stayover tourism industry, in terms of jobs, spending, earnings and stimulating business activity.
The reality is that things are likely to remain extremely tight for some time to come and Government will consequently have little room for investments of its own, starting with the “loss” of the earlier mentioned 21.7 million that wasn’t used last year. However, the Dutch rebuilding funds should allow the prevention of any infrastructural backlog as a result.
No matter how you look at it, the country’s public finances will have to be carefully managed in the near future, so any talk about reducing taxes right now ought to be accompanied by clear indications how the lost income may be recouped. After all, economic expansion at this moment is hardly an evident scenario.
The same goes for plans to construct community centres, sports halls, etc. announced at election campaign meetings in districts. These things might be possible as part of the World Bank programme, but probably not by the local Government alone.
Not promises but prudence is what will be required.
