The Dutch government, under the budget Kingdom Relations, intends to spend in total 376.3 million euros for the Dutch Caribbean in 2022, of which the largest part, 201.5 million euros, is allocated to debt reorganisation and loans.
Also earmarked in the draft 2022 Kingdom Relations budget are: 80.4 million euros for strengthening the constitutional state, 65.4 million euros for promoting the social-economic structure, 4.9 million euros for the hurricane reconstruction of St. Maarten, 21.7 million euros on the government apparatus, 42.4 million for the BES Fund for Bonaire, St. Eustatius and Saba, and 2.4 million euros for “undivided” expenditures.
Liquidity support to the Dutch Caribbean countries Aruba, Curacao and St. Maarten for reform and development after and during the COVID-19 pandemic plays a major role in the Kingdom Relations budget because it concerns large amounts that the Dutch government is loaning at zero-per-cent interest to the countries.
“Due to the one-sidedness of the economies, the rigid labour market, structural reforms that fail to materialise and the absence of an effective and efficient public sector, the economic situation in Aruba, Curacao and St. Maarten has been vulnerable for a good while,” it was stated in the policy agenda document that was attached to the 2022 Kingdom Relations budget.
The budget policy of the Dutch Caribbean countries has been a challenge for years, as a result of which the national debts of the countries increased a lot in the past 10 years, and more than doubled for Curacao and St. Maarten.
“Because of the COVID-19 pandemic, the situation in all three countries has further deteriorated. Tourism, the largest source of income, came to a standstill, the economy shrunk, unemployment increased a lot and there is a worrisome increase in poverty.”
The Netherlands has provided both medical assistance and food aid to Aruba, Curacao and St. Maarten since the start of the pandemic. The Hague also assisted with the continuity of intercontinental and inter-insular transport for essential services during the pandemic.
Liquidity support loans were made available to the Dutch Caribbean countries under certain conditions, which have as objective to strengthen the countries’ resilience. The countries need to execute reforms and measures from the individual country packages.
The yet-to-be-established Caribbean Body for Reform and Development COHO supports this process and supervises the execution of the country packages. The Ministry of Home Affairs and Kingdom Relations BZK is making preparations for the establishing of the COHO. The measures and reforms in the country packages focus on several themes: the financial sector, financial management, public sector cost and effectiveness, taxes, economic reforms, healthcare, education and strengthening the constitutional state.
“The financial situation in Aruba, Curacao and St. Maarten is still worrisome. The national debts have been increasing and the countries are having trouble giving content to the conditions of liquidity support. The extent to which the countries execute the reforms in the country packages will have a big influence on the input and work aimed at strengthening the financial-economic policy, and on the financial management and supervision of the countries.”
As for the reconstruction of St. Maarten after the 2017 Hurricane Irma, it was stated that in 2021 decisions will be taken on the allocation of the remaining funding for reconstruction projects. Based on this, the last tranche for the St. Maarten Trust Fund will be transferred to the World Bank, which manages the Trust Fund.
The remaining means of 2020, in total 12.6 million euros, have been transferred to 2021 and 2022. Five million euros was transferred to 2022 because a number of projects were delayed as a result of the pandemic.
In total, four million euros in assignments was transferred to 2022. It concerns a two-million-euro assignment to the Royal Schiphol Group (RSG) to support the airport reconstruction. One million euros was transferred to 2022 for contributions to international organisations. These means are reserved to provide technical assistance to the St. Maarten Ministry of Public Housing, Spatial Planning, Environment and Infrastructure VROMI for the waste management project.
In 2022, the St. Maarten Trust Fund, which will be active until the end of 2025, will be completely focused on the execution phase. “It is expected that increasingly visible and tangible results will be achieved for the St. Maarten people. Naturally, the actions will be geared towards the realisation of the Dutch priorities: recovery of the airport, the waste management issue and good governance.”
The US $0.5 billion that the Dutch government allocated after Hurricane Irma is linked to certain conditions, including establishing the Integrity Chamber and strengthening border control. “The Netherlands will see to it that the conditions are lived up to during the reconstruction.”
The 2022 Kingdom Relations budget was presented to the Dutch Parliament on Budget Day, Tuesday, as part of the overall 2022 budget of the Dutch government. The budget chapters will be debated on in a series of meetings of the Second Chamber in the course of the next weeks. The handling of the Kingdom Relations budget is tentatively set for the week of October 11.
The Daily Herald.