Aruba gets away without instruction

Aruba gets away  without instruction

Dutch State Secretary for Kingdom Relations and Digitisation Alexandra van Huffelen and Aruba interim Minister Plenipotentiary Ady Thijsen spoke to the media after Friday’s Kingdom Council of Ministers meeting. (Otti Thomas/Amigoe photo)

THE HAGUE--The Kingdom Council of Ministers RMR on Friday did not give Aruba an instruction for its 2022 budget. Unexpected financial windfalls and further cuts by the Aruba government have limited the budget deficit to 112.7 million Aruban florins, lower than the required Afl. 131 million.

  Therefore, the RMR didn’t consider it necessary to give Aruba an instruction. But the Kingdom government does require that Aruba will comply with the financial supervision norms next year and that it will have a budget surplus.

  “I am happy that we didn’t get an instruction,” Aruba interim Minister Plenipotentiary Ady Thijsen told the media after the meeting. “Aruba is acting in a responsible manner where its finances are concerned, so an instruction would not have been right. However, the RMR does expect a budget surplus in 2023. The Aruba government has all confidence that this will be achieved,” he said.

  “It is good that that the Aruba government at the last moment had a number of financial windfalls and that this caused this year’s budget deficit to stay under the agreed upon limit. That prevented an instruction,” said Dutch State Secretary for Kingdom Relations and Digitisation Alexandra van Huffelen   

  The focus now needs to be on 2023, said the state secretary. “It is of importance that the necessary reforms are implemented to ensure that Aruba’s debts decrease and that a budget surplus is realised. That creates room to invest in new developments,” she told reporters.

  In a press release on Friday, Van Huffelen said that the concerns about Aruba and its people were certainly not gone. “We see that Aruba keeps having enormous debts, more than 90% of the Gross Domestic Product. The percentage should be half of that. Almost 19% of the budget goes towards paying interest. Consequently, that money cannot be spent on education, healthcare or eradicating poverty, things that are so important for the people on the island,” she stated.

  The Aruba Committee for Financial Supervision CAFT on July 13 this year advised the RMR to give Aruba an instruction, because the country was not giving follow-up to the CAFT recommendations for a proper, healthy 2022 budget with a deficit that was too large.

  The Aruba government countered that the special circumstances, such as the rising energy and food prices, the shortage of products and the aftermath of the COVID-19 pandemic needed to be taken into account. The RMR gave the CAFT and Oranjestad time to continue talks, and decided in its meeting of September 30 to defer giving an instruction.  

  Van Huffelen emphasised that the role of the CAFT remained important, even though the advice of the committee was not followed this time. “The CAFT gives recommendations and suggestions to improve the country’s finances. That remains important. I think it is wise for the Aruba government to listen to these advices, because these can be used to help accomplish a budget surplus,” she said.

  The state secretary also relayed the decision of the RMR to the Aruba government by letter on Friday. In that letter, she emphasised the importance of a healthy, balanced budget linked to a responsible execution of the budget and adequate financial supervision via the Kingdom law Aruba Financial Supervision, the RAFT.

  The financial supervision norms are conditions for negotiations about the refinancing of the liquidity support loans that were issued during the pandemic. Repayment of the loans is officially due next year, but it is already known that the three Dutch Caribbean countries will have difficulty paying back the several hundred million at this time.     

  Earlier, it was agreed in the RMR that Aruba would stick to the regular budget regulations, which state that the country needs to have a budget surplus of 1% of the GDP. Aruba will not be able to get liquidity support in 2023, it was stated in the Dutch government press release.

  “To be able to build a country and to keep the trust of the financial markets, it is imperative to have a solid budget. With a national debt of now Afl. 5.8 billion, Aruba is leaving an enormous burden for future generations. That is why it is so important that the budget complies with the agreements and that there is money for the things that Arubans want for their country,” said Van Huffelen.

The Daily Herald

Copyright © 2020 All copyrights on articles and/or content of The Caribbean Herald N.V. dba The Daily Herald are reserved.

Without permission of The Daily Herald no copyrighted content may be used by anyone.

Comodo SSL

Hosted by

© 2024 The Daily Herald. All Rights Reserved.