Oranjestad – Aruba is facing great challenges, but there is willingness to make the agreements made between the governments of Aruba and the Netherlands a success. Whilst preparations are being made for the Ordinance to enter into force the latest on August 1st, the Board of financial supervision paid a visit to Aruba. According to Cft Chairman Age Bakker, this is a good opportunity to build a good basis for the future work relation. As long as the Ordinance by means of which the CAft will be established has not yet entered into force, the Cft will execute the supervisory tasks according to the agreements made at the end of December 2014.
On Monday June 29th the Board visited Aruba. The Board spoke with the Governor, the Advisory Council, the Prime Minister, Minister of Finance and the Permanent Commission for Financial Economic Affairs and Administrative Organization of the Aruba Parliament. During the visit the agreements made between the Netherlands and Aruba on May 2nd (Ordinance CAft) and the advice of June 4th concerning the adopted budget 2015, the first quarter execution report, the progress report 2014-2018 and the loan petition were discussed.
Trust
The factual recommendations the Cft presented in December 2014 and April 2015 have been adopted up to a limited degree. This means that it is not necessarily certain that the deficit in 2015 will result in 3.7% of the Gross Domestic Product (GDP). The increase of the BAZV with 1% grants trust. The announcement the Minister of Finance made in his reaction to Parliament on May 8th 2015 that the government is willing to take additional measures in case the deficit standard of 3.7% is at risk, enforces this impression.
Risks
The Cft identified the risks in the progress of the measures that are intended to bring the budget in order again and to make the structural growth of the expenditures controllable. The Cft advises to make a swift start in preparing the 2016 budget, so the constitutional deadline can be met and the risks can be handled as soon as possible. On the short-term a process will have to be designed to reduce the structural growth of the expenditures. Reducing the expenditures requires a joint effort of the entire Council of Ministers of Aruba.
Loans
In the meanwhile, the Aruban government has taken a domestic loan and is in the process of closing off an international one. The income of these loans is entirely destined for the repayment of existing loans and related interest costs. With the emission of these loans the lending ceiling has been reached for 2015. The use of the budget should be monitored closely in order to avoid additional deficits. For as far the government is contemplating not to borrow in dollars, it is important that the necessary measures are taken to cover currency risks according to the advice of the Central Bank of Aruba of May 21st, 2015.
College Aruba financieel toezicht (CAft)
The CAft wil be supervising independently and will consist of Mr. Age Bakker, Chairman and member on behalf of the Kingdom, Sybilla Dekker, member on behalf of the Netherlands and a yet to be nominated member on behalf of Aruba. Aruba will nominate a member for the next meeting of the Kingdom Council of Ministers. The Ordinance on financial supervision should enter into force at the latest on August 1st, according to the agreements made between the government of Aruba and the Netherlands. The CAft expects to be able to present itself in September of this year. Till that time the necessary preparations will be made, including finding an office on Aruba as well as attracting additional workforce to further expand the expertise regarding Aruba.