Opinion: Budgets

POSTED: 05/23/12 1:25 PM

When Curacao and St. Maarten obtained their autonomous status in the Kingdom in 2010, the idea was that both countries would start in a healthy financial position. There was probably a lot if wishful thinking flying around when somebody added the following line to the so-called Slotverklaring of November 2006; “In order to realize the sound starting position, attention shall be given to the debt restructuring. In that framework, the Netherlands shall present a solution for the debt problem.”
Curacao presented a balanced budget for the year 2011; better even: it showed a surplus. But when all the cards were dealt, the Schotte-government had a painful message to communicate. The budget year 2011 closed with a deficit of 163.4 million guilders (just under $92 million).
Finance Minister George Jamaloodin, fresh from an interrogation at the public prosecutor’s office, had a solution at the ready. He wants to plug the hole in his budget with money from the so-called BRK-agreement, money that stems from windfalls in the Kingdom tax regulation.
That this is not a structural solution does not seem to bother Jamaloodin. That the money from this source is meant to stimulate the economy, to improve the standard of living and to upgrade the country’s infrastructure, does not seem to bother him either. It’s bookkeeping under the Antillean sun at its best.
We don’t know yet how the 2011 budget for St. Maarten turned out. What we do know is that the 2012 budget has hit a snag, and that the now departed Finance Minister Hiro Shigemoto reacted to it in a similar way: there is nothing to worry about. Everything is under control. The ministries are spending less than budgeted, and government revenue is up. Never mind that the plans to collect 21 million guilders in taxes from foreign condo owners is going nowhere, that there is no coverage for the 17 million guilders the minister promised to pay out in cost of living adjustment to civil servants and that the government will forego collecting 1 million in death taxes.
It were easier to believe in Shigemoto’s reassurances if St. Maarten had a history of sound financial management. But reports from the General Audit Chamber of the Netherlands Antilles going back deep into the nineties of last century show a discouraging picture.
The Executive Councils never reacted to reports from the Audit Chamber, and if politicians were asked on occasion about these reports, they said reassuringly that they were busy fixing the problems.
Pefa, the Public Expenditures and Financial Accountability workgroup of the board for financial supervision Cft, concluded in a report last year that St. Maarten scores badly on practically all elements of financial management.
Those problems certainly have not been fixed yet and that makes it so hard to believe that Shigemoto had everything under control.
The Cft is currently studying the first quarterly report for 2012 and this contains the jubilant figures Shigemoto also touted during his press conference last week.
There is a new man in charge of the Finance Ministry now. The former Chairman of St. Maarten’s General Audit Chamber must have a good inkling about the state of affairs from his work on the annual accounts of 2010 and 2011. That he accepted the job to become the country’s second Finance Minister must therefore be seen as something of a heroic act.
Whether the financial state of affairs in Philipsburg is as bad as it is in Willemstad remains to be seen, but we would not bet on a lot of good news about the budget.

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