Loan conditions for St. Maarten could be much worse

Dear Editor,

  I regularly read on social media that persons believe that other countries receive loans without conditions whilst we in Sint Maarten are challenged by onerous conditions of the Dutch aid.

  Not only is this not true but the conditions attached to loans and investments by many countries are the subject of interesting and devious sad histories that have dramatically impacted the lives of millions in developing countries.

  The stories typically start with a government requiring to cover deficits or obtain capital for a popular investment. The funds turn out to be available, but the conditions are often onerous and extensive. The government typically publicizes the loan, boasts to the population about the great things that will be achieved through the loan but strategically refrains from informing the public of the onerous conditions.

  Some years later when the investment projects do not produce or the deficit is not corrected by cost reductions the people get to find out that what they thought were investments that were owned by the people turn out to be taken back by the investors because the properties had been pledged under the previous loans. Famous examples are a major port in Sri Lanka and the airport in Zambia. The awareness of this happening has fortunately increased and there is a greater awareness of this happening.

  The transparency we enjoy in the Dutch Kingdom and the structure that avoids hidden debt and collateralization is a huge improvement on this often-experienced risk that has been seen in developing and deficit-challenged countries all over the world and certainly in the Caribbean.

 

Robbie Ferron