Published On: Thu, Jan 17th, 2019

Supervision

Hilbert HaarBy Hilbert Haar

There is no doubt that financial supervision is useful. St. Maarten agreed to this supervision when it obtained country status in 2010.

The question is now: did financial supervision improve our country’s financial situation? Given the quandary St. Maarten finds itself in after Hurricane Irma it is tempting to answer this question with a full-blown no.

And it is true, financial supervision did not perform miracles and the Board financial supervision (Cft) seems at times more like a paper tiger than a strict authority that keeps our sweet Sint Maarten land on the straight and narrow.

One observer described the situation as follows: “The Cft pretends to control, St. Maarten pretends that it lets itself be controlled and the Netherlands pretends that it has everything under control. It is all one big charade.”

I wonder if it is really as bad as that. I mean, I know that St. Maarten does not have its financial management in order, I know (see the report of the General Audit Chamber) that ministers make expenditures for which they have no budget and I know that the tax inspectorate sucks to high heaven due to a lack of proper equipment and expertise.

We have seen how the first governments that took office after 10-10-10 quickly ran up a combined deficit of something like 60 million guilders ($33.5 million), but we have also seen how the Cft intervened and forced the government to compensate these deficits in future budgets. And St. Maarten was well on its way to comply.

One may well wonder what would have happened with these deficits without Cft-intervention. It all makes me think back to the nineties of last century when St. Maarten was under so-called higher supervision. The reports from the General Audit Chamber of the Netherlands Antilles over those years make one thing clear: supervision or no supervision, the party continued in St. Maarten.

It shows that politicians are highly irresponsible characters when it comes to spending public money. If St. Maarten wants to free itself of outside intervention into its financial affairs it will obviously first have to get its house in order. But it will also have to establish its own financial supervisor with a rulebook that cannot differ that much from the stipulations laid down in the kingdom law financial supervision.

That might not be what politicians want but it is damn well in the interest of the people who are financing the public sector – the tax payers. We don’t even need to establish a separate institution for this, because we already have an excellent General Audit Chamber. Why not extend its mandate to financial supervision and why not do this right now?

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