THE HAGUE--Dutch State Secretary for Kingdom Relations and Digitisation Alexandra van Huffelen denied on Thursday that pressure was put on Aruba, Curaçao and St. Maarten to accept the conditions that were attached to the liquidity support loans during the coronavirus COVID-19 pandemic.
She did so in her reply to written questions by the Party for the Animals PvdD about the decrease of the labour benefits cut in Aruba and the related decision-taking by the Kingdom Council of Ministers RMR. The PvdD insinuated in its written questions that the Dutch Caribbean countries were forced into accepting the conditions to get the Dutch loans.
“Let me make clear that no force or abuse was made of the circumstances during the time of the loan agreements. The countries were hard-hit by the COVID-19 pandemic. The incomes of the countries drastically decreased, while the largest part of the expenditures remained the same, the countries wished to implement support measures for the private sector and the costs of healthcare sharply increased,” stated Van Huffelen.
The state secretary explained that seeing this financial-economic situation, the countries required immediate financial assistance. Agreements were made, whereby the Netherlands set conditions, including labour benefits cuts.
Van Huffelen remarked that the Council of State in its advice agreed that it was common practice to attach conditions to the loans. This is also done by the International Monetary Fund (IMF) and the European union (EU).
The condition with regard to the labour benefits cuts had a direct effect on the countries’ liquidity problems and actually did help to reduce the shortages, stated Van Huffelen. At the time, Aruba had already proposed a 12.6% labour benefits cut. Curaçao had previously decided to cut the costs of the government apparatus by 10%.
St. Maarten had already implemented a 10% cut of the ministers’ salaries after Hurricane Irma, and in May 2020, the St. Maarten Council of Ministers decided to increase this percentage to 20. “The RMR wanted to offer the loans to the countries on equal conditions,” Van Huffelen said, justifying the 12.5%.
The state secretary pointed out that the cost of personnel often comprised a large part of government expenditures. The reduction of personnel costs through salary cuts is fairly common internationally. This is often applied in IMF programmes when a country has to borrow money from the IMF because of liquidity problems.