Country’s liquidity position is ‘decent’

Country’s liquidity  position is ‘decent’

Prime Minister Silveria Jacobs


PHILIPSBURG--St. Maarten’s current liquidity position is “decent,” but the country needs to continually assess and once it collects whatever outstanding is owed, St. Maarten will be able to make it through this quarter, says Prime Minister Silveria Jacobs.

  Jacobs provided the information during the live Council of Ministers press briefing this week in response to a question on how government plans to fill the gaps, as it will not be receiving liquidity support for the second quarter of this year.

  “I would pray and hope we never need liquidity support again and we can move towards standing on our own feet financially as well as continue to make the necessary reforms to ensure that we can maintain the liquidity we need to be able handle our own bills. That is what we are doing,” she said. “We are in a decent space right now and I would just say if you do owe government, take a step forward and help us to meet our obligations.”

  She said weekly updates are received on the country’s liquidity position. "We are currently in a decent liquidity position to be able to handle our obligations,” Jacobs said. “We have also been paying some arrears that we have lagged on in the past, which I am very happy that we can do.”

  She said the decision-making regarding liquidity support in the Kingdom Council of Ministers is based on advice from the Committee for Financial Supervision CFT, which looks at the country’s budget and its expenditures over the past years and, based on how much the country actually spends on a regular basis and how much it has in income currently, had determined that liquidity support was not needed.

  “So, when people say we are not getting liquidity support … it does not mean that we are not able to carry our burden,” Jacobs made clear. “When that determination is there, what we as a government have to do is assess the payments that have to be made and prioritise them. That’s what we have been doing. We ensure that our employees are paid, that our subsidy recipients are paid and the incidentals are dealt with based on priority.

  “Part of the reforms is to ensure that there is a proper basis for payment. Sometimes you make an ad hoc decision to pay for certain things. If the law provides, there is a [due diligence regulation – Ed.] that determines that there should be a bid, for instance, so if, after the fact, it is determined that a bid wasn’t used, there is difficulty in being able to pay the person even if you have the liquidity, because the legal basis isn’t there.

  “So, we have to be very diligent and, of course, part of that falls within the Department of Facility Services to be able to ensure that no bills are being incurred outside that would then come to that department to be paid where the proper process or procedure wasn’t followed. “

  She said government has to be diligent and efficient in its spending, while seeking ways to increase its income.

  “As has been said over the years, we have money on the road so we have to start collecting that money and if the CFT is saying, ‘You have money on the road for two years that you haven’t collected, you have to start collecting that,’ then that is the responsibility of this government.

  “What we are seeking to do is to ensure that we can collect what is to be collected. The actions are being taken by the relevant departments to get those invoices out because in some cases, the invoices were never issued. So, once that is done, we can make the necessary collections [and] we can definitely make it through this second quarter,” she assured.

  Government has to continue to assess. “We are still dealing with rising cases [of COVID-19] here. There are rising cases around the world. It can also come back to haunt us down the road and have a negative effect on our tourism. That still remains our main pillar, so we will continue to monitor that."

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