The Board of financial supervision Curaçao and Sint Maarten (Cft), for the last time with Age Bakker as its chairman, spoke with the Council of ministers and members of Parliament about Sint Maarten finances. Insight in the current financial state of affairs due to IT problems in the financial administration is lacking. The annual report for 2016 has yet to be composed which means there is still uncertainty about the expected positive result of ANG 26,4 million. Furthermore, no progress report has been submitted to Cft for 2017 yet. Immediate action by government is necessary to have comfort that Sint Maarten still meets the requirements of the targeted instruction.
Based on the preliminary fourth quarter report, Sint Maarten expects a budget surplus of ANG 26,4 million for 2016. That surplus would be sufficient to compensate according to plan for deficits accumulated in previous years. The Cft stressed that Sint Maarten should expeditiously compose the annual accounts for 2016 and have them audited by the accountant. The current numbers are preliminary and, due to the ongoing IT problems, possibly subject to change. The annual accounts should provide more certainty regarding the result of 2016. “It is important that Sint Maarten government takes immediate action to provide the necessary information about the execution of the budget”, Age Bakker stated during the meeting with the Council of ministers.
In its advice on the 2017 budget, Cft concluded that the budget was in line with the targeted instruction. However, Cft also stressed the importance of closely monitoring the budget since it relies heavily on incidental income. Due to the IT problems, Sint Maarten was also unable to provide the report over the first quarter of 2017. Without the quarterly reports, Sint Maarten government nor the Cft will be able to adequately monitor whether the budget income has been realized. Therefore, assessing whether the execution of the budget remains in line with the targeted instruction is difficult. This also has effects whether or not a future request for a loan could be approved by Cft.
A request for a ANG 30,0 million loan for capital investments was received on the 12th of April and was approved by Cft. ANG 21,6 million of the requested amount was already budgeted for, so ANG 8,4 million needs to be formally incorporated in the budget through a budget amendment. Since amending the budget is a lengthy process, Sint Maarten government decided to already request for ANG 21,6 million through the Central Bank of Curaçao and Sint Maarten. The loan will provide an economic impulse for Sint Maarten. Cft discussed with the minister of finance plans to modernize and upgrade the tax office. It was agreed that a draft business plan will be presented to Cft shortly in support of a request for a loan. Cft will look at the request in a constructive manner and base its opinion on an expert second opinion.
During its visit, Cft also spoke about the ongoing reform of both the retirement system and healthcare system. On April 13, Cft advised Sint Maarten to establish and implement the necessary legislation for the reforms by the end of 2017. Taking the recent progress into account, this will be possible for the reform of the retirement system. The national ordinance regarding the National Health Insurance however, will also have to be finalized this year, after which actual implementation will take place.
During the meetings with government it was emphasized that financial management is far from being up to standard. The government intends to invest in IT solutions which should help modernize financial administration. In addition to the meetings Cft had with the Council of Ministers and Parliament, Cft also met with Governor Holiday, the Sint Maarten Hospitality & Trade Association and APS. A visit was paid to one of the projects partly financed by the pension fund, the Rain Forest Adventure. The project will add to the tourist attraction packages offered in Sint Maarten. Age Bakker thanked all parties for their cooperation these past several years and looked back at a successful last visit to Sint Maarten as chairman of the Cft. “Much has been accomplished in the past years and I am confident that Sint Maarten can combine financial discipline and a healthy economic environment which is attractive for foreign investors.”