Introductory remarks by the Minister of Finance SXM meeting Committee of Finance August 14 2018



AUGUST 14, 2018

Honourable Mr Chairman, honourable members of the Committee of Finance,
The honourable people of Sint Maarten, good afternoon!

1. I am honoured to appear before you today, to discuss an essential item on the agenda of this committee, namely the effects of Hurricane IRMA on the General Pension Fund of Sint Maarten, APS, and the fast-track approach, adopted by APS after IRMA, to contribute towards the revitalization of the economy of Sint Maarten, as pursued by the Government.

2. Mr Chairman, depending on which source one follows, it has been estimated that IRMA caused over US$ 1.8 to 2 billion dollars in economic damage on Sint Maarten. Consequently, even with a Trust Fund sponsored by the Netherlands, in the amount of 550 million euros to finance the National Recovery and Resilience Plan, as well as the damage pay-outs by insurance companies and investments made by citizens and local corporations, one thing is sure, we still have an enormous financial shortfall of several hundred million US Dollars for the reconstruction of the Sint Maarten’s economy and infrastructure over the next few years.

3. Given the fragile situation of Sint Maarten’s economy, we must applaud those investors that believe in Sint Maarten and the resilience of our economy, especially the local institutions. That is why, as a former member of this house, I was very much encouraged last October, when I learnt that APS would embark on a fast-track project implementation program, to contribute to the reconstruction of Sint Maarten in the coming years.

4. By putting its shoulders under the reconstruction of the economy of Sint Maarten, through a speedier process for third-party project approval and the shortening of the duration of projects it undertakes, and because of its capital base, APS can play an essential role in stimulating the economy of Sint Maarten.

5. Not only will there be an acceleration of project implementation, but this would also have a positive effect on various economic sectors and the labour market in Sint Maarten in the post-IRMA period. These measures will, in turn, be favourable for the future financial position of the Government, because of the collection of wage and profit taxes connected to the increased economic activities. As a result, the Government’s deficit, which grew post-IRMA, will decrease over time.

6. However, fast-tracking has to consider the external and internal limitations imposed upon the Fund. In fast-tracking their projects, the APS is, for instance, dependent on the ability of the Government, to issue the necessary building and other permits on time. Furthermore, as future recipients of pension payable by the APS, we all want to ensure that, as a Pension Fund, the APS continues to adhere to the applicable Good Governance principles and standards, in safeguarding the pension entitlements of its members.

7. Therefore, even when projects are expedited, because of Sint Maarten’s current situation post-IRMA, APS must continue to have due regard for the long-term interest of the participants of the fund, when making its investments. When I became Minister of Finance, I quickly visited APS to be informed of the state of affairs within the Fund, how it fared post-IRMA, and what contributions it was making since IRMA, given its promise to fast-track its large projects to help in the reconstruction of Sint Maarten’s economy.

8. I was delighted to hear from the APS, that they have identified, and are very much ‘in control’ of the challenges to the Fund, which are mainly of an external nature. These challenges include the outstanding arrears of the Government to the APS, and the ongoing discussion on the division of assets with the pension fund in Curaçao, as well as the need for pension reform in Sint Maarten, due to the consequences of an ageing population. Addressing these challenges will protect the future financial position of the Fund.

9. Despite these challenges, Management and the Board of APS have demonstrated that they are committed to the fast-track implementation strategy, with due consideration of the Fund’s primary responsibilities and interests. I was particularly happy to learn that APS was considering the implementation of a new Sint Maarten Investment Bank, which could become a game changer through the attraction or facilitation of the necessary funds to accelerate the economic development of Sint Maarten into a regional powerhouse in the years to come.

10. Mr. Chairman, APS’ commitment to implement the necessary projects, especially their focus on different economic areas varying from the construction sector, to housing, to the tourism sector, and the healthcare sector, gives me additional hope, that we have people and institutions on this island, that are willing and able to take on the challenge of revitalizing the economy of Sint Maarten, in a sustainable way.

11. That is why, I readily accepted the invitation from the Secretary-General on your behalf, to join you and your members here today, together with the representatives of APS, to present the members of your esteemed committee with the necessary information on the projects thus far undertaken by APS and their contribution to the further development of Sint Maarten.

12. Mr Chairman, may I suggest that the representatives of APS make a presentation on the way the Fund has fared since IRMA occurred, and share information on which projects they have been pursuing to actively contribute to the reconstruction of the economy of Sint Maarten? After the APS presentation, I am at the members’ disposal to consider any questions they may have for the representatives of APS or myself.

Thank you, Mr Chairman!

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