Will Brexit help Curaçao?

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The long-standing Overseas Countries and Territories (OCT) Decision will again be renewed in 2020. In accordance with the Treaty on the Functioning of the EU, the 23 British, Danish, Dutch and French OCT are associated with the EU. The core of the OCT Decision is preferential access to the EU market and participation in global trade. In my first article I’ve made the case that we have failed to profit from the preferential EU market access. Recently we saw headlines stating that the new OCT means more money and prosperity for Curaçao because of Brexit. Is this true however?

The premise is that since there are 12 British OCT, Brexit will mean that the current aid programs will be the last for these territories and consequently more money for Curaçao. The first caveat is that we know almost as little about the plan for Brexit that’s concrete as we did that morning after the referendum itself. Options now range from ‘hard’ to ‘soft’ exit with lots of uncertainties. Fact is that the outcome of Brexit is unknown and too early to draw conclusions. 

The British OCT are currently scrambling to cope with an unknown Brexit which may isolate them, especially in trade matters. Brexit means to officially leave the EU, which in turn means that the British OCT will have no trade agreement with it. When Brexit happens, Britain will have no formal trade agreements with any country, having subsumed its authority for trade matters to the EU. This is why the House of Lords EU Committee wrote to the Brexit secretary seeking assurances that it might replace any of this “lost” EU funding for the exiting British OCT. It has also been reported that these territories will on their own negotiate with the EU for an aid package not far from the OCT Decision which will terminate at the end of 2020. The exit of the United Kingdom (UK) from the EU will likely mean withdrawal of UK funding from the European Development Fund (EDF) however. Brexit looks more like a double-edged sword.

The poorest EU countries (Croatia, Romania, Bulgaria, Latvia) are not keen to see funds that they are in dire need of, go to former colonies of some of the richest EU members. Additionally, the likely accelerated accession of Montenegro and Serbia to the EU and that of Albania, Kosovo and Macedonia later on, will undoubtedly put pressure on available EU funding. In any case, all the (soon 27) Member States must agree with the new OCT Decision for it to be official. That could be tricky.

Whatever the result of Brexit, I don’t think that available funding for Curaçao is going to be the main problem. Of concern should be the fact that we have been consistently negligent by not submitting relevant projects for EDF financing. We are passing up millions of Euros that could have gone to development projects. Earlier this year the EU gave us a deadline to submit proposals for durable projects. It seems that our first priority should be to increase our capacity to design and implement projects that are in line with durable human and environmental development.

Willemstad, Curaçao

Author: alexdavidrosaria

Alex Rosaria is from Curaçao. He has a MBA from University of Iowa. He was Member of Parliament, Minister of Economic Affairs, State Secretary of Finance and United Nations Development Programme Officer in Africa and Central America. He is an independent consultant active in Asia and the Pacific.

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