THE HAGUE – The debt burden of Aruba, Curaçao, and Sint Maarten has visibly declined since the COVID-19 pandemic, but significant underlying risks remain. That was the message from Lidewijde Ongering, chair of the Board for Financial Supervision (Cft), during a presentation to the Dutch Senate’s Kingdom Relations Committee. The Cft expressed particular concern over Aruba’s high interest payments and the widespread use of so-called bullet loans across the Dutch Caribbean.
Since 2020, the debt-to-GDP ratios in all three countries have dropped. Aruba saw its ratio fall from 115% to 71%, while Curaçao and Sint Maarten currently sit at or below the international benchmark of 50–55% as used by the International Monetary Fund (IMF). This reduction is largely due to economic recovery and increased tax revenues following the pandemic.
Interest Payments Cause Concern
Despite the improving figures, the Cft highlighted critical risks—especially in Aruba, where nearly 16% of the national budget is now spent on interest payments. That is three times the legal maximum of 5% for Curaçao and Sint Maarten, as outlined in the Kingdom Act on Financial Supervision. Aruba does not fall under that legislation, borrows independently on the capital market, and as a result pays significantly higher interest rates.
The board also warned of fragile debt structures. Over the past years, all three countries have relied heavily on bullet loans—loans that do not require interim payments and must be repaid in full at maturity. Several of these loans are due soon in Curaçao and Sint Maarten, including a 140 million guilder bullet loan that matures in October 2025.
Cft Urges Shift to Sustainable Borrowing
The Cft was sharply critical of this borrowing model. “When such a large amount suddenly comes due and there’s little financial room, it can lead to serious problems,” Ongering told the Senate committee. The Cft advises switching to linear loans, which are repaid in installments over time and reduce financial shocks.
For the upcoming Curaçao loan, the board recommends a mixed approach: repaying 60 million and refinancing 80 million, in line with the country’s financial capacity. It also called for building structural repayment buffers and more proactive debt management.
While the falling debt ratios may look favorable, the Cft warned that the Caribbean countries remain heavily dependent on tourism and external factors. That makes it all the more important, the board emphasized, to approach future borrowing with caution and long-term sustainability in mind.
