Minister Gibson: We are not producing sufficient revenues to cover the needs of all ministries

Minister of Finance Richard Gibson



PHILIPSBURG – Minister of Finance Richard Gibson Sr. addressed members of the press in Wednesday’s, June 7, Council of Minister’s Press Briefing.

He announced that the Moody’s report is out and had been published. The Moody’s report is a tool for international investors and others to be able to evaluate the obligations that St. Maarten has or a Country has on its credit worthiness.

The rating St. Maarten received from Moody, is the same ratings that St. Maarten got the year before, which is a BAA2 Rating. “The BAA2 rating really states that St. Maarten’s obligations are judged to be medium risk, and subject to moderate risk,” Minister Gibson informed.

BAA2 falls in the categories of ratings of BAA, and all of those categories are judged to have a medium grade rating, and as far as its credit is concerned rated to be moderate.

St. Maarten’s economy is predominantly based on tourism. Notwithstanding that the economy of St. Maarten is rated to be of low strength compared to Cayman Islands whose economy is rated to be of high strength.

“The GDP per capita income of St. Maarten is $28,241. This is for all of the BAA rating countries in that category represents a per capita income that’s three times the amount of all the peers in the BAA rating group…Cayman Islands per capita income is twice that of St. Maarten. It ranges up to $56,414. So they have their tourism and financial sector and together it produces a park and per capita income. That’s much higher than we have,” the Minister informed.

“Noteworthy is the fact that in the Moody report mention is made of the ability and the resilience that St. Maarten have to bounce back from natural disasters,” the Minister observed.

According to Minister Gibson, the “Report is positive, especially in light of the fact when mentioned report that compared to 2015 between January and June and 2015 compared to 2016 January to June last year, we had a drop of 17 percent of cruise tourism. That is quite an impact, but notwithstanding that we were able to present a balanced budget and stay in line with what is required.”

“Mention is also made in the report, given the situation that we’re in, that basically expansion possibilities, because we have an economic growth that is lower than the region, our projected economic growth is 0.5 percent. Everywhere else in the region it’s higher than we have. Again we don’t have a financial sector and they do, and the only possibility that we have or basically the concentration in terms of expansion and improving of economic growth has to be in tourism,” Minister Gibson stated.

“Because of our smallness we have one of the smallest economies in the world. As a sovereign or semi-sovereign country, one major project could have a significant impact in improving our GDP and improving the performance of our economy is also without a reason that we’re doing all we can to see if we can get amongst others, the Pearl of China off the ground, because that would be the major project that even Moody says will have a very positive economic impact on St. Maarten,” Minister Gibson explained.

Minister Gibson also mentioned a visit to Trinidad and Tobago, where he attended – at the request of the Minister of Justice – the Caribbean Financial Action Task Force conference. “This conference was an eye opener in the sense of that there are only two countries in the region that are not living up to their responsibilities, and getting the legal infrastructure in place as is required by the CFATF. And that is St. Vincent, and I’m sorry to say St. Maarten,” the Minister informed.

According to Minister Gibson, “From 2012, the progress that they said St. Maarten have been making is unacceptable and as a result we have been sanctioned.”

First, a high level mission will be visiting St. Maarten. “Efforts are underway to try to avoid that high level mission, because we managed to get them to agree that if we could show substantial progress between now and September that they will entertain a request from us to call off the high level mission that has prompted a series of activities here to be able to meet that deadline. All noses are pointed in the same direction, all parties involved, which are quite a few, includes, the Council of Ministers which includes Parliament, their legal department, the Ministry of Justice that derisking and correspondent banking is directly related to the legal infrastructure and the entire Caribbean can put together to avoid money laundering and terrorist financing. That’s the aim,” the Minister explained.

Additionally, Minister Gibson announced that on Tuesday, June 6, the Council of Ministers passed the 2018 budget. The numbers part of the budget consists of two parts: the numbers budgets, and the policy description will be ready in the next 3 weeks.

“With the passing of the budget yesterday, as well as the numbers a concern and a policy section is at the end of this month, it could go into the pipeline to be able to get to Parliament for September 1. It was not easy and there’s a lot of ministries that are not happy. Why? We don’t and we are not producing sufficient revenues to cover the needs of all ministries,” the Minister continued.

“It’s the same situation we’ve had before, and efforts are also being made to increase revenues. In the messages, it can’t be business as usual, especially as far as government-owned companies are concerned. It is time that you contribute your share.  We cannot think about investments and investments that the government-owned companies need, and they have to do this and have to do this. And no or very little or less attention has been given to education, sickness, and accident. All the other concerns and problems the government is confronted with, to be able to render the proper service to the community. It has to change,” Minister concluded.