Balanced Budgets Unrealistic at this time

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Member of Parliament Hon. George Pantophlet

 

Articles 100 and 101 of St. Maarten’s State Regulation (Constitution) regulates how St. Maarten’s Budget has to be established. The procedures are laid out in the compatibility regulations. In my opinion the following articles 15,16 and 25 of the Kingdom Law on Financial Supervision should also be suspended.

Another article which is article 25 of the Kingdom Charter (Statuut van Het Koninkrijk Der Nederlanden) which requires the approval of the Kingdom government should also be suspended.  Hurricane “Irma” that devastated St. Maarten in 2017 made adhering to these laws unrealistic.

As I mentioned in a previous article permission to deviate from article 25 of the Kingdom Law on Financial Supervision was given for the 2017,2018, 2019 and 2020 Budgets which states that an agreement has to be reached between the government of St. Maarten and the Kingdom government and in emergency cases in consultation with the Chairman of the Kingdom Council of Ministers.

And if he can’t be reached, the government and I add of St. Maarten can independently take the necessary decisions. In my opinion, St. Maarten should be allowed to deviate from a Balanced Budget from now until 2025. My reason for such is the following: If we look at hurricane “Irma” which struck in 2017 from that time until 2020, St. Maarten has had Budget deficits. It is said that impact of the covid19 pandemic has affected us worse than hurricane “Irma and it is even compared to the Great Depression of the early 1900’s.

This will mean in my interpretation that the recovery will take longer. And God forbid another hurricane strikes, an earthquake or a manmade virus as is now the case. St. Maarten should be allowed to run budget deficits of between 5 and 8% from now until 2025. What should also be suspended is the monthly reports that the Ministry of Finance has to provide for the Committee of Financial Supervision.

This will allow for more time to be spent on preparing and or executing the necessary policies. As it relates to the deficits, I am convinced that one of the ways for St Maarten to get out of its financial crisis is debt cancellation. At present the amount of Ang. 1 billion now owed to the Dutch government and increasing with additional loans should be tuned into a grant.

The question might be asked why, to which my response is that after world war II as part of the Marshall Plan Holland received a grant of over $1 billion to rebuild with no conditions and no intermediary such as the World Bank. No deadline stating that if the funds were not used in particular time frame it will be returned to the donor country or countries.
Loans will only sink us deeper in debt and cripple the already struggling economy. Balanced budgets are unrealistic at this time.

George Pantophlet
Member of Parliament