THE HAGUE – Despite years of financial supervision and debt restructuring agreements, Curaçao continues to struggle with structural weaknesses in government financial management, according to a new Dutch policy evaluation report.
The report evaluated the effectiveness of the Kingdom’s financial supervision system, including the Rijkswet financieel toezicht (Rft), debt relief arrangements and Dutch financial assistance programs for Curaçao and Sint Maarten.
Researchers concluded that Dutch interventions have been partly effective in improving transparency and stabilizing public finances, especially during crises such as the COVID-19 pandemic. However, the report states that structural improvements in financial management and economic reform have remained limited.
According to the evaluation, one of the main weaknesses remains Curaçao’s financial administration and budget management. The researchers specifically noted that reforms aimed at improving financial governance have not been sufficiently effective.
The Dutch government now says Curaçao, Aruba and Sint Maarten must continue improving their financial management systems, while the Netherlands may provide support where requested.
The report also reveals discussions within the Kingdom about introducing more flexibility for dealing with economic crises and external shocks. Current Kingdom financial rules strongly focus on balanced yearly budgets, which according to the evaluation leaves little room for anti-cyclical economic policy during downturns.
In addition, the Netherlands indicated it may explore new policy rules or hardship clauses together with Curaçao and Sint Maarten to clarify how certain financial supervision rules should be applied in practice.