Possible consequences

Possible consequences

Dutch State Secretary of Home Affairs and Kingdom Relations Raymond Knops struck a reasonably positive note while answering questions from the Second Chamber of Parliament in the Netherlands (see related story) about the vulnerability of recent agreements reached with St. Maarten regarding more liquidity support and accompanying restructuring measures guided by a Caribbean Body for Reform and Development COHO. The main issue was certain statements made in Philipsburg, particularly on the floor of Parliament, which would seem to indicate widespread opposition to the approach.

However, while he understood the concern based on those remarks, Knops pointed out that a large legislative majority backed the agreement as confirmed in writing by the chair. He reiterated that St. Maarten deserved the benefit of the doubt, but did warn that full commitment from both sides was needed to make it work, as receiving continued financing directly depends on implementation of the envisioned reforms and investments.

The underlying message is clear: This is very much a package deal. Any attempts to water down the execution is likely to have swift consequences including a stop to the soft loans and the few grants being provided.

That is also one of the reasons recent developments at Princess Juliana International Airport (PJIA) are extremely worrisome. The current conflict between the supervisory board of holding company PJIAH and the CEO of operating company PJIAE, who is backed by its own board, threatens to put at risk the involvement of Royal Schiphol Group, one of the conditions to use means from the Dutch-sponsored Trust Fund managed by the World Bank for the terminal reconstruction.

Wednesday’s letter (see related story) from a US investment banker who claims having been ready to refinance the airport’s debts and raise US $220 million to fund the rebuilding project since early 2019 shows the direction in which things might be going. If that is the case, what impact it will have on relations with the World Bank and indirectly the Netherlands remains to be seen, as well as possible consequences the actions – or lack of such – by those involved may ultimately have.