Dear Editor,

Yesterday it was announced that a new Antillean currency will be introduced by the Central Bank of Curaçao and Sint Maarten, replacing the current Antillean Guilder in 2021. This measure is and execution of a 'decision in principle' already taken in 2010 (source: website radio station Dolfijn FM from Curaçao and Bonaire, www.dolfijnfm.com, October 15th, 2019).

The question, however, is if the world 10 years after this 'decision in principle' is still the same, justifying such an investment (because the introduction and change of the currency is a costly operation). It determines us to ask ourselves how the financial world nowadays is compared to 10 years ago, what the financial developments and circumstances are now and might be in the future, in the Caribbean and neighbouring regions. Is a new currency still the best option?

At least this is – again - a moment to reflect, evaluate and analyse the pros and cons related to other options. One option is just to quit fully with local currency, for example by just dollarize. I wrote about that already several times in earlier letters to the editor in The Daily Herald some months ago. In that perspective, somebody sent me the interesting text below, published July 15th, 2019 at www.stlucianewsonline.com. It can be used as tool to start thinking about the future; therefore, I publish it integral below

“The former governor of the Central Bank of Barbados, (CBB), Dr. Delisle Worrell, is urging regional countries to seriously consider using the United States dollar as their national currency, after initially arguing that Caribbean currencies served a crucial purpose when they were first introduced, but they have now become a nuisance in today’s digitized world.

Writing in the July edition of his Monthly Economic Newsletters, the economist said the one question which always surfaces in response to his call to retire all Caribbean currencies is about national sovereignty. “Most people seem to believe that sovereignty is “lost” with the retirement of the local currency. On the contrary, replacing domestic currency and deposits with US currency and deposits gives everyone in the country wider access to goods and services. “With domestic currency you can buy only local goods and services; with US dollars you can purchase from anywhere in the world, wherever you can get the best value for your money,” Worrell wrote, adding that the fact of the matter is that the US dollar is sovereign in international transactions “and there is nothing than can be done about that”.

He said even China, the world’s second largest economy, with 15 per cent of global gross domestic product (GDP) to the US’s 24 per cent, accepts payments in US dollars. “A Jamaican travelling to Haiti, a Guyanese to Suriname, a Dominican to Guadeloupe, a Trinidadian to Barbados, all take US dollars with them. All hotel rates and oil and commodity prices are quoted in US dollars.

“Ironically, having a domestic currency in today’s digital world may make a country more susceptible to US sanctions than a fully dollarized country would be,” he said, arguing that Washington’s sanctions against Cuba and Iran “are effective because Cubans and Iranians earn in a local currency whose value continues to fall because the country’s access to US dollars is limited. “The US reaps tremendous benefit from the fact that its currency is in universal use. Countries which have their own currencies all maintain a reserve of foreign exchange at their central banks with which to protect the value of domestic money. Those reserves are mostly held in US treasury securities, and constitute a loan to the US government.

“However, a country like Panama which has no currency of its own does not have that problem,” he noted. “The bottom line is that rather than impairing national sovereignty, replacing the domestic currency empowers the country and its citizens by giving access to the world’s goods and services, to the full extent of their incomes. Moreover, the country has no need to offer credit to the world’s wealthiest nation, in order to maintain the value of domestic financial assets.”

Earlier, Worrell had said Caribbean currencies should be replaced because the present world of commerce and finance bears no resemblance to the world for which Caribbean currencies were devised. “Up until the 1960s in most Caribbean countries, all retail transactions and many wholesale transactions were settled with notes and coins. The means of payment were always scarce in those days, because our countries are so distant from the European capitals that issued the world’s major currencies.” He said nowadays, currency notes and coin, mostly of uncertain value in terms of purchasing power of the everyday goods and services countries need to source abroad, are little used domestically.

“Mostly we use electronic transfers, cheques and credit cards. Since these are all computer records, it is immaterial how they are denominated, so long as both ends of every transaction match. There is no reason to link the denomination of the electronic transactions to the value of notes and coins.” He said replacing the Barbados dollar with the US dollar for all transactions, domestic and foreign, enhances the range of choice open to the country and its residents, in all international commerce. International transactions are conducted in US dollars or in currencies that are convertible to US dollars.

In contrast, with Barbados dollars you cannot buy or sell anything outside of Barbados, not even in nearby St. Lucia, much less in the rest of the world. The GDP of Barbados in 2018 was about US $5 billion, but the country had access to less than US $3 billion of international goods and services, because that was the total availability of US dollars and other foreign exchange from exports, tourism and other services, and foreign financial inflows.” (end quoted text)

Note that I am not saying dollarization is a must, because besides pros, there are also some cons to it, but again, please decision makers, use the current and foreseeable financial developments to rethink the earlier 'decision in principle' from 2010 and discuss critically if a new currency really is a sustainable measure. Now is the time to set a future proof course in favour of the development of Sint Maarten.

G.B. van der Leest

Dear Editor,

Ensuring that democratic freedoms embedded in our Constitution can be enjoyed by every single voter on our beautiful island is imperative. There is no justification whatsoever to allow anyone, regardless of their appointed or elected positions, to take our democracy and its processes hostage.

Dear Editor,

  Why are the residents of Dutch Quarter treated as though we pay less or no road taxes? The top layer of asphalt was removed from the main road I believe approximately nine years ago. This was when the drainage system and sidewalks were done.

  They began to work on the underground cabling this year, and now the road once again is left in an even worse state – piles of dirt in areas, making it a one-way; entire parts missing where you are driving on dirt; potholes that swallow your tires.

  The working-class people in this area are too busy to make an official complaint, so I am doing just that. I am officially complaining! Finish what you started! Public Works is not starting a project using our taxes and then leaving the people to endure such injustice.

  You would never see such deplorable roads in the “upscale” areas. We deserve good roads too!

Name withheld at author's request.

Dear Editor,

  Over the past months we have seen on the printed local and social media debates, comments, opinions and partial information on 3 major topics: Financing of the airport, U.S. Pre-clearance and lately the potential privatization of the Ports operation.

  SHTA as the largest representative of private businesses on-island has seen how our members have reinvented themselves, dug deep into their pockets, reinvested on the island since [Hurricane – Ed.] Irma without any governmental financial support or without seeing any economic stimulus plans, tax alleviation (like our French and BES Islands counterparts), or direct assistance to them.

  Most businesses, when planning to make substantial investments, borrow money or make other financial decisions, take the time to analyze how these decisions will affect the financial results of their operations. If I borrow funds how much will it cost me, can I repay the debt, would I have to increase my prices? What options of financing do I have available based on my credit rating and capacity to pay? In other words, businesses must evaluate all aspects of a transaction before they enter into one and before they decide if it is a good approach or not.

  Government officials and Government-owned companies are not exempt from going through the same evaluation process. Therefore, government officials, MPs, Ministers and others should base their opinions on the social, environmental and financial consequences of major decisions like financing of the airport, U.S. Pre-clearance and the potential privatization of the Ports operations.

  Government officials have an obligation towards the taxpayers of making sure they objectively evaluate what is best for the interest of the country. Once they have evaluated the pros/cons of each transaction they should be transparent about how they reach their conclusion and their decision to support a project/approach or not.

  On the topic of the financing of the airport the evaluation strictly from a financial aspect should be quite simple. Can we get a financing package that includes a major grant component, low interest refinancing that will trump this deal? Or are the non-financial conditions, e.g. having a Dutch imposed CFO, more oversight from the outside sources and less control, more important than the financial consequences?

  On the topic of U.S. Pre-clearance, SHTA without having access to any of the financial information or consequences of this decision can only evaluate the potential pros/cons of such idea as follows:

  Pros:

  * Ease of travel for passengers departing St. Maarten en route to the U.S.

  * Connection time with flights in the U.S. would be shorter.

  * Improvement to airport facility.

  * Economic impact. Approximately 25 U.S. CBP will be stationed in SXM. They will require housing and other living necessities, contributing to the economy.

  * Increased transit passenger traffic from neighboring islands.

  * Potential increase of more flights to SXM from the U.S. in non-international airports?

  Cons:

  * At this point getting the airport back to pre-Irma levels should be the priority.

  * No information has been made public to determine the cost of such facility. What would the capital investment required be to make this a reality? An ROI and cost/benefit analysis must be done before a decision is made on this topic.

  * Would the already high fees paid by travelers within their tickets be increased even more? The higher the airfare to/from SXM imposed on travelers that are price sensitive will force them to choose less expensive destinations in the Caribbean; e.g. Aruba, Bahamas, Dominican Republic, etc.

  * Since approximately 70 per cent of the traffic to PJIA is from the U.S., does this mean that 70 per cent of the airport has to be assigned to pre-clearance?

  * How would this affect the duty-free and other businesses already established? Or the services to those not traveling to the U.S.?

  When it comes to financing of the airport debt and U.S. Pre-clearance even without all the information there is something that we can ascertain, higher landing/departure fees that make the price of the airline tickets to SXM more expensive will be a deterring factor for future visitors to the island.

  On the other hand, the ease of pre-clearance, although nice to have, we seriously doubt would be a major decision for a potential tourist to the island. How many U.S. travelers before traveling to a destination use the departure process as decision-making factor? On the other hand, cheap airfare is proven to be a major decision-swinging point.

  In relation to the decision to lease out the operations of the Port, again the information is limited or outdated. What is the present financial situation of the Port? How would this transaction benefit the coffers of Government and affect every single resident? Would leasing out the facilities result in lease payments to the island to what level? Would the cost of goods incoming to the island increase based on new tariff’s imposed? What will happen with the Simpson Bay Lagoon Authority which is also an entity of the Port?

  In other words, at the end of the story is this a good financial decision for the taxpayer in the short and long term or what other considerations are affecting this decision-making process?

  Unfortunately, we can conclude that the general public does not have enough information and has not been provided any financial data or analysis by any of the parties involved to justify their positions in favor or against these transactions.

  Therefore, by means of this release, we request the officials in charge to put country before self, provide transparency, act with integrity and evaluate and approach all transactions with an objective financial evaluation process, making as much data public as possible.

St. Maarten Hospitality and Trade Association (SHTA)