Published On: Wed, Dec 23rd, 2020

Government bends over backwards for liquidity support

PHILIPSBURG / THE HAGUE – St. Maarten will receive the third tranche of liquidity support from the Netherlands – 61.2 million guilders ($34.2 million) – before the end of the year and the Netherlands will pay an advance of 8.7 million guilders (almost $4.9 million) on the fourth tranche in de beginning of 2021. The Netherlands will make €30 million ($36.6 million or 65.5 million guilders) available for the construction of a new prison and improvement of the detention situation on the island.

St. Maarten will also have €15 million ($18.3 million or 32.7 million guilders) at its disposal for the improvement of financial management and strengthening of the tax inspectorate, though this money will come from the World Bank Trust Fund. The Netherlands makes up to €2.7 million ($3.3 million or 5.9 million guilders) structurally available to the Royal Marechaussee and the Customs department for the strengthening of border control.

This brings the total of Dutch financial support for now to 174 million guilders ($97.2 million).

All this appears from a letter State Secretary, Drs. Raymond Knops (Kingdom Relations), sent to the Second Chamber on Tuesday.

In his letter Knops refers to the cumbersome negotiations with St. Maarten in last Friday’s meeting of the Kingdom Council of Ministers. In that meeting, Knops writes, “St. Maarten formally agreed to the content of the proposed COHO (Caribisch Orgaan voor Hervorming en Ontwikkeling – Caribbean Entity for Reform and Development) and for going along with the proposal that was submitted to the Council of State.”

Knops confirms in writing that these decisions have the support of Prime Minister Silveria Jacobs and from the chairman of St. Maarten’s Parliament, MP Rolando Brison: “Prime Minister Jacob has assured me in writing that a large majority of the Parliament has explicitly expressed support for the measures. This has been confirmed in writing by the President of Parliament.”

Knops also reacted to a question from Dutch MP Ronald van Raak about MP Christophe Emmanuel’s “Hitler-thinking” remark during a meeting of parliament’s central committee on Monday, December 15. “It is not up to me to dictate how parliamentarians in the kingdom weigh and choose their words. I consider especially the comparison between me and Adolf Hitler as the lowest possible level. This came from the only parliamentarian in St. Maarten who does not support the agreement.”

While Knops does not seem to be entirely convinced that the Jacobs-government will faithfully stick to the agreement he signed on Tuesday morning, he notes that “St. Maarten deserves the benefit of the doubt.”

The agreement Jacobs and Knops signed on behalf of their respective governments binds St. Maarten to the execution of measures established in the country package. Knops states in his letter that during the meeting of the Kingdom Council of Ministers, St. Maarten also agreed to adjustments to the consensus kingdom law financial supervision and to a “definite ratification” of the retroactive execution of the conditions attached to the second tranche of liquidity support. Furthermore, the government has promised “maximum transparency” and to honor all requests for information from financial supervisor Cft about government entities.

The Netherlands will pay the liquidity support for the period July 1 – December 31 before the end of the year. Payment of the advance for the fourth tranche will follow in early 2021. Knops points out in his letter that St. Maarten will have a liquidity deficit of 8.7 million guilders during the first six weeks of 2021. A definite decision about the fourth tranche will be taken during a meeting of the Kingdom council of Ministers on February 12, 2021.

Another boon for St. Maarten is the decision to transform the bullet loan of 49.9 million guilders ($27.9 million) that was due in December 18 into a linear loan with a term of fifteen years against zero percent interest. The first three years the government does not have to make any payments on this loan.

The funds the Netherlands makes available for the construction of a new prison will not fall under the control of the government in St. Maarten. This money will be spent “under the direction and supervision of the Ministry of Home Affairs and Kingdom Relations in cooperation with the Ministry of Justice and Security,” Knops writes.

The funds for the execution of the country package come from the World Bank trust fund and will be used for the improvement of financial management and the tax inspectorate. This initiative replaces the Development Policy Operation (DPO).

Related articles:
COHO – change is coming but St. Maarten has to pay for it
The about-face of Prime Minister Jacobs