Emphasis on political and fiscal stability

POSTED: 09/19/16 9:03 AM

St.maarten – Governor Drs. Eugène Holiday put the emphasis on the need for political and fiscal stability yesterday morning in his address at the opening of the 2016-2017 parliamentary year. “Stability is a necessary condition to facilitate public and private investments that are required to strengthen economic growth to meet the socio-economic needs of our people.”

The governor noted that the opening of the parliamentary year takes place thirteen days before the elections and that a new parliament will be installed on October 31. A new Council of Ministers will be formed based on a majority in the new parliament. “Between now and the installation of a new Council of Ministers the government is to continue to take care of the interests of the people,” the governor said, adding that his address will provide an outline of the policy challenges and opportunities for the upcoming year. Last year, the governor outlined the priorities of the government’s policy-intentions for the next twelve months.

The numbers do not look to pretty: the economy is expected to expand by 0.7 percent this year, slightly better than the 0.5 percent in 2015. The governor put his finger on the root cause of the sluggish economy: “The slow growth can in large part be attributed to domestic political fragility and the tempered economic developments in our main trading partner and tourism market, the United States.”

Inflation remains low at 1 percent this year (0.3 percent in 2015). “This reflects low United States inflation and low international energy prices,” the governor said.

Nevertheless, the pressure on social, healthcare and pension systems is increasing, the governor pointed out. This is due to population growth caused by immigration and the ageing of the population.

Unemployment is trending downwards to around 8.7 percent this year, but youth unemployment remains high.

“Low growth coupled with tax compliance issues have left government revenues under pressure, resulting in reduced fiscal space,” the governor said.

Drs. Holiday also addressed political stability, especially legislative reforms to address ship-jumping. A constitutional amendment proposes “to exclude Members of Parliament who declare themselves independent from the political party with which they were elected to parliament from participating in the process to appoint ministers.”

The government has made adjustments to its original draft to address concerns from the Council of Advice and the Kingdom Council of Ministers. “Government intends to present the draft constitutional amendment to parliament for approval within short,” the governor said. “Government considers resolving the issue of ship-jumping of paramount importance for the long-term stability of our country.”

A second constitutional amendment will enable students living abroad to take part in local elections.

To create sustainable budgetary conditions, the government has tightened spending controls, improved the quality and timelines of the budget for greater accountability and prepared plans to invest in the strengthening of the tax administration and collection, the governor said.

“Looking ahead it is essential to invest in the tax administration to help curb the trend in revenues and realize structural increases.”

Furthermore the government “believes it is essential to invest in its human capital though continued training of civil servants.” The governor also touched on the move into the new government administration building, the education on the move initiative and some “vital policy documents.” Among these is the legislation to establish the Council for Labor and Education that aims to find a better balance between education and the labor market.

Legislation to establish the youth employment program and fund “is to be completed for presentation to the Council of Advice and parliament.”

Government is committed to strengthening national unity and identity “through its support for and participation in national activities like St. Maarten Day, the National Day of Prayer and Emancipation Day,” the governor said.

He furthermore referred to programs to assess and map the country’s tangible and intangible cultural heritage in collaboration with UNESCO, the emergency repairs of Fort Amsterdam and the upgrade and repair of the old salt factory.

Healthcare and social safety net systems “are expected to remain under pressure during this parliamentary year,” the governor said, adding that this is due to “structural changes in our population landscape like ageing and unexpected outbreaks like Zika.”

Addressing safety and security, the governor said that regulating the legal position of police officers and national detectives is high on the government’s agenda. The objective is to put all officers “in their respective positions before the end of the year.”

Cooperation with the French side, the strengthening of law enforcement and the criminal justice system continue to demand the attention of parliament, the governor pointed out. “It is essential to find a good balance between preventive measures – through education – and repressive measures.”

In the field of foreign relations cooperation with the French side, the United States of America and the kingdom are key, the governor said. He referred to the joint sewage treatment plant in Cole Bay, addressing correspondent banking concerns with regional partners and the US and the memorandum of understanding with the Dominican Republic that aims to promote cooperation and trade relations.

Another area of concern is the country’s tourism product. The government wants to invest in improving its management and quality and address challenges like the opening of Cuba. The establishment of the Tourism Authority, and “infrastructural improvements like the parking lot at Kim Sha as part of the commercial strip beautification project Cole Bay and Simpson Bay” are part of these initiatives.

The solid waste management facility, alleviating traffic congestion, and investments in renewable energy also have the government’s attention. Furthermore, the governor said, the attention is on “investments in protecting and preserving our environment as a valuable natural and economic asset through zoning plans and the establishment of a terrestrial park.”

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