THE HAGUE – Curaçao, Aruba and Sint Maarten (CAS) are facing growing problems while they do not have sufficient execution power to handle the next crisis. The Venezuela crisis, the hurricanes and the corona pandemic have exposed and strengthened vulnerabilities, State Secretary Alexandra van Huffelen of Kingdom Relations writes in her outline letter to the Second Chamber of the Dutch Parliament.
She mentions poverty, education, economy, nature and climate as challenges to which a sustainable answer must be found. She wants to tackle this with due observance of the relations in the Kingdom. “The autonomy and responsibility of the countries are paramount.” But they cannot do it alone and that is why the involvement of the Netherlands is necessary.
The letter identifies six specific problem areas. First and foremost is the lack of government finances and implementation power. According to the state secretary, the foundation is not in order. “You cannot build a house on a foundation that is not strong enough.” The governments will have to deal with that themselves first. The Netherlands has provided liquidity support in the form of interest-free loans, but this has caused the debt ratio to rise enormously. Aruba was already very high and has now reached 114 percent, for Curaçao it is now 90 percent and for Sint Maarten 73 percent.
As is well known, to increase revenues for governments, tax administrations need to be modernized and compliance increased. “Recent efforts in Curaçao for this seem successful, but also show that such a process requires leadership and perseverance. A simplified tax system (with a broad base and few exceptions) can contribute to higher compliance.”
The second point was already known, namely promoting economic growth through diversification, among other things. In the meantime, it is important for the short term that tourism is recovering strongly. “The IMF concludes that new growth opportunities and broad structural reforms are needed to make economies less vulnerable and provide new growth opportunities.”
Strengthening the rule of law is the third important point. Van Huffelen makes a point of complying with human rights standards. This worries her deeply, she writes. “This shows that (partly due to the small scale of the countries) the responsibility for migration and human rights is an enormous task.” The detention conditions also require extra attention.
According to the minister, it is necessary to improve education in order to combat poverty, so that it is more in line with the labor market. “Poverty, lack of housing and opportunities on the labor market ensure that many young people do not return after studying in the Netherlands or the US. This is a great loss for the countries, because these people are desperately needed.” Van Huffelen is very concerned about the health care systems that seem to be becoming unaffordable. Expenditure growth will have to be severely curbed, because costs are high due to factors such as the aging population, obesity and diabetes. This calls for reforms. Finally, the State Secretary mentions the quality of life on the islands, which is under pressure due to climate change. Nature conservation and care for the environment are therefore very important. “I have seen during my trip that the governments are not yet sufficiently aware of this.”
Given their autonomous status, the CAS countries will initially have to tackle all of this themselves. Van Huffelen then wants to ‘effectively support it with knowledge and expertise’. She mentions three points of approach: cooperation based on mutual trust, assisting each other and being prepared for crises and strengthening the independence of governments.
“The governments in the countries will have to show commitment, decisiveness and leadership. They have to make choices that will sometimes be difficult and far-reaching.” The Netherlands wants to help formulate a feasible long-term vision. Naturally, the Coho plays an important role in this. As she said earlier, she is confident that the discussion of the Coho Kingdom Act in parliament and the Second Chamber will lead to success. The Netherlands then wants to make agreements about investments that help economic recovery. One of the concrete components of this is the opening up of Dutch subsidy and guarantee schemes, including the National Growth Fund.
Bron: CuracaoChronicle