Published On: Fri, Oct 16th, 2020

Opinions | By The Publisher

An ugly dog fight

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bond issue dog fight Hilbert Haar Opinion Piece

By Hilbert Haar

Finance Minister Ardwell Irion’s plan to float a 75 million guilders bond issue has resulted in an ugly dog fight with financial supervisor Cft. United People’s party leader Rolando Brison added his two cents by claiming that the Cft is interpreting the relevant article in the kingdom law financial supervision in a way “they find convenient for their modus operandi.” Irion claimed that article 16 of the Rft only applies to loans for capital expenditures, while he intends to use the money from the bond issue to cover operational expenditures.

Who is right and who is wrong? Brison’s attack on the Cft feels much like a Pavlov-reaction. It does not make sense to even think that an institution like the Cft has an agenda that works against the interest of St. Maarten. In this discussion the focus of responsible adults ought to be on arguments for or against a given position.

And what are those arguments? Irion: article 16 only applies to loans for capital investments. I read the relevant article several times and there is only one conclusion possible: the minister is wrong, because the article only refers to loans in general, not to loans for specific purposes.

Brison: We have already permission (from the RMR – the Kingdom Council of Ministers) to deviate from a balanced budget. That is, in and by itself, correct. But the permission to deviate from article 15 of the Rft is not carte blanche for running up unlimited budget deficits. On the contrary, the RMR still has to decide up to what point St. Maarten is allowed to deviate from article 15. Again, there is only one conclusion possible: Brison is wrong; at least he only telling the part of the story that, to borrow his own expression, is convenient for his modus operandi.

In this context Brison’s statement about the deficit is telling: “We are still in a deficit and this loan will keep us within that deficit.”

Hello? A 75-million bond issue will obviously increase the national debt. Pretending that nothing changes, as Brison did, if you borrow 75 million guilders somewhere is like telling your kid it is okay to buy expensive gadgets because your parents are already in debt anyway.

Brison also said that a budget amendment is on its way to parliament. Keep in mind, parliament has to approve it and then the decision has to go through a ratification process. The launch of the bond issue is only a couple of days away – even if it is postponed by a week or so.

Budget amendments are also subject to an advice from the Cft – before or after a decision by parliament. There is little doubt that the financial supervisor would advice against such a budget amendment. And then what?

What I get from this story is that both Minister Irion and MP Brison are taking the truth for a ride to nowhere. They are interpreting the financial supervision law in a way that is convenient to them. That seems easier than admitting that you are cornered and that you have no feasible alternatives.

The result of all this can never be advantageous for St. Maarten. This dispute will make the relationship with the Cft and with the kingdom even more strenuous than it already was.

It makes one wonder: are these politicians fighting a lost fight in the name of autonomy or is it about the protection of the overblown salaries of themselves and their political friends?

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