Published On: Thu, Jan 17th, 2019

Financial supervision remains in place for another three years

Pictures CFT by © Berber van Beek

PHILIPSBURG – St. Maarten and Curacao will remain under financial supervision until at least 2021. The committee that evaluated the countries’ level of compliance with the Kingdom law financial supervision writes this in its report that was sent to the Second Chamber in The Hague on Monday, January 16.

“Steunend op eigen kracht maar het de wil elkander bij te staan” is the title the committee gave to its report. The quote, meaning: “Relying on our own strength but with the preparedness to support each other” stems from a speech former Queen Juliana made on Radio Oranje on December 6, 1942.

The report’s conclusion for St. Maarten is clear: the country did not meet the requirements laid down in article 15 of the kingdom law financial supervision. The budgets were not balanced, lacked sufficient explanations about expected revenue and expenditures and did not explain the country’s financial position.

In the 2015 budget, there was insufficient explanation about intended investments, financial management was not in order and the country struggled with deficit compensation and payment arrears.

In 2016 the budget surplus deteriorated and the country was too dependent on incidental revenue.

The 2017 budget met the requirements from the financial supervision law. The budget surplus improved over the first six months, though incidental revenue lagged. Then, on September 6, 2017, Hurricane Irma changed everything.

It took the Kingdom Council of Ministers a bit more than six months to declare that St. Maarten’s budget was allowed to diverge from the Cft-requirements. The application of article 25 allowed the country to work with a budget deficit in 2017 and 2018.

All this did not change the evaluation committee’s conclusion that St. Maarten did not meet the requirements from article 15; hence the recommendation to the Kingdom Council of Ministers to keep financial supervision in place for at least another three years.

The committee says in its report that it found a lack of leadership in St. Maarten and that responsibilities were unclear. It recommends strengthening the Minister of Finance’s position towards the other ministers and towards the prime minister and to take a closer look at the role of the secretary-generals.

One of the suggested measures to help St. Maarten solve its financial predicaments is to regulate the top incomes in the (semi) public sector by law. Furthermore, the committee established that St. Maarten does not have a proper functioning ICT-system.

The report also recommends transparency: “Show what you do with the money of tax payers. That will promote a compliance culture.”

Finance Minister Perry Geerlings read the report before it was sent to the Second Chamber. He had no comments on its contents or the findings of the committee, but he made some suggestions. One of them is: “More consultation with St. Maarten and less consultation behind closed doors about St. Maarten.”

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Related article:
Opinion piece: “Supervision