Aruba Prime Minster Evelyn Wever-Croes.
ORANJESTAD/THE HAGUE--Ministers and their advisors, Members of Parliament (MPs), and directors of government-owned companies in Aruba will, in total, hand in twenty per cent of their salary, which is more than the ten per cent in the other two Dutch Caribbean countries.
Aruba Prime Minister Evelyn Wever-Croes informed the labour unions this week that the government will reduce its salaries from May to December. Ministers, MPs, advisors and directors of government-owned companies will take a pay cut of 20 per cent.
Civil servants and employees of government-subsidised foundations and government-owned companies will see their salaries reduced by 12.5 per cent, while the pensioners who resort under the general pension fund APFA will contribute 4.5 per cent.
Pensioners will keep their monthly allowance, but will see their year-end bonus cut by 50 per cent. Only pensioners from before 2014 receive a year-end bonus. This benefit was eliminated for those going on pension after 2014.
The measures to reduce the government revenues are necessary in order for Aruba to come into consideration for a long-term loan from the Netherlands. Aruba needs this funding from the Netherlands to finance its support programme for dismissed persons and for companies that are losing most of their income due to the coronavirus crisis. Financing from the Netherlands is also needed so civil servants can continue to be paid.
The Aruba government met twice with the labour unions. And – even though there was no general consensus on the cost-cutting measures – the majority of the unions supported the proposal, some under certain conditions.
One of these conditions was that the government will implement stricter price control for basic foods and talk to the harbour authorities and the import companies to reduce the cost of getting food to the island. At the request of the unions, the government made an agreement with the local banks that they will take into consideration the fact that most clients will have a lower wage, on a case-by-case basis.
Government entities also have to contribute and drastically cut cost. A norm will be implemented whereby directors of government-owned companies can earn a maximum salary of 130 per cent of that of the prime minister. This is a structural measure. The pay of members of the supervisory boards of directors will be reduced by 20 per cent. Several board members have already indicated that they will hand in their entire allowance.
The cost of advisors needs to be cut. The Wever-Croes government has already drastically reduced the number of advisors at the offices of the ministers since it took over from the previous AVP government in 2017. This measure already saves Aruba florins Afl. 27 million on a yearly basis. Ministries have been asked to reduce their expenditures to a minimum. Afl. 9.6 million has been saved in travel cost, advice, office supplies, car leasing, fuel and other expenditures.
Together with the cuts to the Social Crisis Plan of Afl. 10 million, the combined measures are yielding Afl. 91 million in savings. Further cost-cutting will take place in the coming weeks and months. Wever-Croes said there is “very little manoeuvring room” if Aruba wants to come into consideration for Dutch financial aid.
Wever-Croes announced this week that she has established an Economic Recovery and Innovation Committee which will be coming up with recommendations as to the emergency and stimulus measures needed to mitigate the adverse economic consequences of the corona crisis and to reactivate the economy.
The committee – which will also draft a national recovery and innovation plan for Aruba – will consist of a steering group and three sub-committees. The steering group will include representatives of the private and public sector and will be supported by a high-level think tank consisting of former governors and former members of advisory bodies.
The prime minister indicated that there is a lot of interest from the community to participate in the committees. “Everybody who wants to participate, will be involved. Politicians who are active in the Parliament and outside Parliament have said that they want to help.
“The task that lies ahead of us is enormous. We will build a foundation for a new Aruba. This needs to be a broadly supported and solid foundation and needs to have integrity norms as its basis. Future generations will hold us accountable for what we do now. It has to be done the right way,” she said.