Curaçao Business Association: ‘It takes two to tango’

WILLEMSTAD - The allocation of the 177 million liquidity support in the form of a soft loan is unclear and requires further explanation and substantiation. The announcement that 42 million will be used to secure the activity and thus employment of persons with permanent employment for a month is a step in the right direction that is very much appreciated.

It will have wider support and be even more effective when this financial support not only applies in solidarity to all sectors. But if it is accompanied by measures such as an ATV scheme, flexibility in the dismissal procedure, and tax payment schemes.

However, based on our total GDP, the impact of tourism sector and the calculations of the Alivio Package 1 & 2, to ensure the maintenance and reconstruction of business and employment, all indicators point to an amount greater than the aforementioned one especially if it is assumed that the crisis will last for more than a month.

In order to maintain productive economic activities as much as possible and thereby preserve and create jobs, the entire amount of 177 million, spread over three months, should be used for this. It would not be a good thing to use a (large) part of this amount for budget support. This would go against the advice of the Committee on Financial Supervision (CFT).

The Kingdom Council of Ministers has made it clear that our budget deficits are to be financed through austerity measures in the public sector. It is necessary that the Curaçao government acts in solidarity and that it drastically increases its efficiency, among other things by means of percentage cuts in salaries and benefits of civil servants, ministers and members of parliament.

The apparently excessive salaries provided to government companies should also be addressed. A so-called Balkenende standard should be applied here. The government is also frequently offered free legal, industrial and / or sector-specific assistance by the business community; sincere "... with the will to help each other ..." After all, the Netherlands takes the view that it expects sacrifices from our side before considering a second tranche of aid.

"It takes two to tango".

These austerity measures are not only necessary to finance the deficits caused by the COVID crisis, but also to finance the deficits that manifested themselves well before this crisis, such as the Giro Bank affair, Curacao Medical Center (CMC), Refinery, and Inselair, among others.

It is advocated to set up a recovery fund, capitalized among others by the aforementioned amount of 177 million, resources released from the cuts in the public sector and, as a last resort, any temporary increase in indirect taxes and excise duties on fuels.

In our opinion, such a fund should be designed entirely under strict conditions and supervision, outside politics, and government. This will give the necessary confidence to all actors, including the Netherlands, that orderly management of the funds will take place.

The current lack of financial buffers in both government and business, combined with unprecedented high unemployment, requires decisiveness in the decision-making process regarding the austerity measures. It is noteworthy that the government in Aruba and other islands in the Caribbean region are already at a more advanced stage where necessary measures of this kind are about to be introduced. Our government should take an example there.




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