Curaçao and the WTO: Isolation, sanctions and noncompliance

Summary in Papiamentu below

According to the World Trade Organization (WTO) there are 524 trade agreements in existence. Curaçao has none and is among a handful of nations without one. A trade agreement means that participating countries phase out tariffs on merchandise trade, reduce restrictions on trade in services and foreign investment. These agreements provide for trade and (well paid) jobs.

Not only don’t we have trade agreements but we are unable to enter into one. This because we have broken our international obligations and could easily face sanctions by (members of the) WTO which could end up costing us millions. No country will even negotiate with Curaçao knowing that we are noncompliant. This is a big obstacle since our products and services face higher tariffs and restrictions compared to others, making us less competitive.

Reason for our trade isolation and noncompliance stems from the 70s when we introduced a very strict protection policy with levies of up to 90%. These protected businesses -not having to worry with competition- raked in millions, costing consumers dearly. While protection in those days was used in some countries to temporarily stimulate infant industries, here it lasted for more than 40 years and became a ‘right’ protected by some politicians. On the eve of the creation of the WTO in 1994 we were told in Marrakesh that we were violating our GATT (General Agreements on Trade and Tariffs) agreements from 1948. No steps were taken to correct this however.

In 2005, the first decision I took as Minister of Economic Affairs was to scrap protection. Many don’t realize how harmful this policy was for the economy. We protected an internal market of 165,000 for decades instead of looking for export markets via trade agreements. The price we are still paying for this failed policy is trade isolation and possible sanctions.

The first priority is to renegotiate with our partners in order to ensure that our trade regime complies with international trade principles. In the recent past I held two high-level meetings with the Office of the United States Trade Representative (USTR) to resolve this matter. Insiders have indicated that the government of Curaçao (GoC) is not going to build on the progress made, but will opt for a different path which is complicated and risky. We should bear in mind that missteps at this stage can be costly as we could face penalties from our international partners. To make matters worse it seems that the GoC is being ill-advised to start seeking a direct WTO-membership for Curaçao replacing our current status as WTO-member via the Kingdom of The Netherlands. An independent WTO membership is a decision taken in 1998. I do not think a change of status is a priority now and the GoC should review this 20-year-old decision. In any case we should not be poking sleeping bears, especially not at this stage. But most importantly, let us realize we are in desperate need of new trade opportunities. We cannot stay isolated in a world with an ever-growing amount of trade agreements. We must get this one right.

 

RESUMEN NA PAPIAMENTU

Mientras tin 524 tratado komersial den mundu, Kòrsou no tin ni unu. Un tratado komersial entre dos o mas pais normalmente ta eliminá derechi di importashon i otro tipo di restrikshon di partisipantenan. E di tratadonan aki ta stimulá komersio, krese ekonomia i krea empleo.

Kòrsou no solamente no tin tratado komersial, pero no por drenta unu tampoko. Esaki pasombra nos no ta kumpli ku nos obligashonnan internashonal den Organisashon Mundial di Komersio (WTO). Ta nifiká ku ningun pais ta sikiera sinta ku nos na mesa di negosashon mientras nos no ta kumpli ku WTO. Banda di no por tin tratado komersial, nos pais ta kore riesgo ku (paisnan afiliá na) WTO por imponé sankshon komersial riba nos pais pa motibu di nos inkuplimentu. Sankshonnan ku por kosta miónes.

Nos a faya ku nos obligashon pa motibu ku nos a introdusí maneho di protekshon di merkado den añanan 70 sin tene kuenta ku reglanan vigente. Protekshon di merkado no ta apnormal i hopi pais a usa esaki pa stimulá industriánan den nan promé fase di eksistensia. Serka nos e maneho a dura mas ku 40 aña i na lugá di ta un estímulo, e a bira un derechi. Hopi doño di e kompanianan protehá -ku no tabatin mester a prekupá ku kompetensia- a bira riku riba lomba di e konsumidó ku den sierto kaso a paga un rekargo di 90% èkstra riba e produkto protehá. Ku e maneho di protekshon a skohe pues pa konsentrá riba nos merkado interno chikí enbes di buska eksportashon.

E promé akshon ku mi a tuma na na 2005 komo Minister tabata pa eliminá protekshon. Nos prioridat aktual ta pa renegosiá ku WTO e obligashonnan ku nos a violá. Na dos okashon mi a sinta ku e outoridatnan Merikano di e Office of the United States Trade Representative i a logra basta progreso. Ta resultá awor ku Gobièrnu ta bai reinventá e wil i start un proseso nobo i kompliká di renegosashon. Tambe Gobièrnu ke na e momentunan aki start e proseso pa kambia nos status denter di WTO. Awor aki nos ta miembro di WTO via Reino Ulandes. Ke hasi Kòrsou un miembro independiente. Un kambio no solamente ta largu, pero por ‘lanta kachónan na soño’ lokual por pone paisnan realisá ku pa hopi aña nos a violá reglanan internashonal i konsekuentemente imponé sanshon riba nos ku lo kosta nos ekonomia. Pero mas tur tur kos, e preis di mas haltu ku nos lo paga pa no finalisá e proseso di renegosashon ku WTO, ta isolashon komersial, oprotunidat pèrdí pa eksportá, krese nos ekonomia i krea kupo di trabou. No tin espasio pues pa nos faya den e proseso aki.

110 aña Dòktor: un biografia

Bo tabata sa pa hopi aña Dòktor su fam tabata Bikker? Ku e ta te ainda e polítiko mas eksitoso pa loke ta trata voto elektoral? ? Lesa e gran hòmber aki su biografia i lucha pa outonomia.

Moises Frumencio Bikker a nase na Ser’i Klip den Otrobanda riba 27 òktober 1907. E tabata e di tres yu di Pedro da Costa Gomez (Shon Pedro) i Braulia Bikker. Despues e famia ta keda ampliá ku 5 yu muhé i un yu hòmber. Durante di e promé añanan famia da Costa Gomez/Bikker a biba na bários adrès den Otrobanda, pa despues muda bai Penstraat. Braulia Bikker tabata ama di kas, miéntras ku Shon Pedro tabata negoshante i tambe e tabata atministrá e korant “Boletin Comercial”.

Moises a terminá 8 klasnan di skol básiko i MULO di St. Thomas College. E tabata hunga futbòl, tabata gusta spar tur tipo di piedra di koló i tabata interesá den piedranan presioso. Esaki a pone ku semper a kere ku Moises lo a bira un hoyero. Ku 15 aña di edat e ta bai Ulanda i ta bai biba serka fraternan na Tilburg pa sigui enseñansa. Djis promé ku e bai Ulanda Moises i su rumannan ta keda rekonosé pa Shon Pedro i ta haña e fam da Costa Gomez. Despues di Tilburg e ta bai Nijmegen (1923) kaminda na Canisius College e ta keda formá bou di guia di Hesuitanan. Na Nijmegen e tabata bria komo studiante i tabata gana premionan di e mihó alumno den Ulandes, Latino i Griego. Despues di eksamennan final di Gimnasia e ta sigui su estudionan di lei na e Universidat Katóliko di Nijmegen. E ta optené su diploma di kandidato denter di un aña di tempu i despues na 1929 ta sigui e eksamen doktoral.

Komo hurista e ta traha komo supstituto griffier na Den Haag. Na Nijmegen e la traha kasi tres aña komo abogado i prokurador. Durante di e tempu aki e ta será konosí ku su promé kasa, Elisabeth (Lies) Heiling. For di e matrimonio ta nase dos yu muhé. Na 1962 e ta kasa na Venezuela ku Lucina Matheeuws. E matrimonio aki no ta produsí yu.

Riba 3 di desèmber 1935 Dòktor ta promové na Universidat di Amsterdam ku su tésis “Het wetgevend orgaan van Curaçao: Samenstelling en bevoegdheid bezien in het kader van de Nederlandsche koloniale politiek”. Inmediatamente despues e pareha da Costa Gomez ta subi barku i ta yega Kòrsou riba 31 desèmber 1935.

Apénas despues di tres siman na Kòrsou, Dòktor ta ko-funda Curaçaosche Roomsch Katholieke Partij (CRKP), Nederlands Antilliaanse Ambtenarenbond i R.K. Arbeidersbond di kua e ta bira sekretario. Komienso di febrüari 1936 da Costa Gomez ta kuminsá su karera komo sirbidó públiko den funshon di adjunct-commies na Parkèt i tambe sekretario di Komishon Hurídiko.

Da Costa Gomez na komienso di febrüari 1936 ta envolví su mes den un wèlga riba tereno di refineria i ta skohe p’e banda di e trahadónan. Kòrtiku despues ta Esaki ta pone ku Gobernadó van Slobbe, ku a haña ku Dòktor ta un “peliger”, ta mand’é bai traha na Sint Maarten. Despues ku e siguiente aña van Slobbe a baha, Gobernadó Wouters, ta laga da Costa Gomez regresá su isla natal. Dòktor ta keda promové komo adjunct-commies ter Griffie, despues commies, substituut griffier i griffier di Hof. Na 1944 e ta bira hefe interino di Departamentu Soshal i Asuntunan Ekonómiko.

Da Costa Gomez ta drenta arena polítiko na 1938: e ta keda skohé komo miembro di Staten di Kòrsou i ta bira lider di frakshon di CRKP. Ounke ku for di 1944 a bira opvio e kiebro entre Dòktor i CRKP, ta te na 1948 e ta sali for di e partido aki i ta funda Partido Nashonal di Pueblo.

Da Costa Gomez ta bira miembro di Raad van Advies ekstraordinario di Ulanda na London. Na 1946 Dòktor ta enkabesá un delegashon ku ta bai Ulanda pa hasi un petishon pa outonomia. Di 2 aprel 1947 te 3 desèmber 1948 da Costa Gomez ta traha na Ulanda komo e promé Representante di Antia Ulandes na Den Haag (awe Minister Plenipotensiario). Na 1948, 1952 i 1954 da Costa Gomez tabata presidente di e delegashon di Antia Ulandes di e Konferensha di Mesa Rondó.

Komo mandatario Dòktor tabata e di dos presidente di College van Algemeen Bestuur (CAB). Despues di CAB ta bin Regeringsraad ku pa di promé biaha ta nombra ministernan (ku responsabilidat ministerial). Dr. da Costa Gomez ta bira e promé presidente di ministernan den Regeringsraad (pues Dòktor ta e promé Promé Minister di nos pais) i ta tuma e portafolionan di Asuntunan General, Agrikultura, Peska i Maneho di Awa. Di 1963 -1966 e ta Diputado di teritorio insular di Kòrsou enkargá ku Salubridat Públiko, Asuntunan Soshal, Agrikultura, Krio i Peska.

Mr. dr. da Costa Gomez ta muri riba 22 novèmber 1966 ku apénas 59 aña di edat. Dr. da Costa Gomez tin e siguiente distinshonnan: Officier in de Orde van Oranje-Nassau, Ridder in de Orde van de Nederlandse Leeuw (ámbos di Ulanda), Commandeur in de Orde van San Carlos (Colombia) i Orde van Jubille Zehabi (Libanon).

Dòktor su legado ta traha pa libertat, dignidat i balor propio di e pueblo, prinsipalmente e pueblo ku ménos posibilidat. Dòktor ta e polítiko ku mas éksito den nos historia na urnanan: na 1963 ela kue 36,6% di tur voto ku a keda emití, lokual ta un rèkort ku no a keda igualá.

OECD: Curaçao noncompliant. Economic reform needed.

Summary in Papiamentu below

Curaçao has harmful tax laws, concludes the Organization of Economic Cooperation and Development (OECD) report, Harmful Tax Practices – 2017 Progress Report on Preferential Regimes released a week ago.

The OECD’s Forum on Harmful Tax Practices assessed 164 jurisdictions against internationally-agreed standards set in the OECD/G20 base erosion profit shifting (BEPS) agreements. According to the report, 20 nations/territories, including Curaçao, are noncompliant. In our case the Tax exempt facility, the Export facility and the EZone facility don’t comply with international standards. The BEPS standards on preferential tax regimes are designed to stop countries from offering tax breaks for geographically mobile income that facilitate base erosion and profit shifting.

While countries all around the world have already reacted on this report, Curaçao has remained silent. No reaction from Government, Parliament or even our International Financial Sector (IFSC). This is very disconcerting. Especially when we add to the mix our problems with correspondent banks, an uncertain monetary union with Sint Maarten and the criminal case against the President of the Central Bank. Where is the sense of urgency? As soon as this report becomes widely known, some groups will dust off their tired anti-globalization rhetoric and start accusing the world and The Netherlands. Others will refer to the past glory days of offshore, without offering solutions. What we need is a conversation about creating a conducive environment where our financial businesses can build deep capabilities, grow, internationalize and in the process, create a range of good jobs. We need to overhaul our rigid labor market and migration policies. We need to build more efficient legislative and bureaucratic systems to not only comply with new international norms, but to build a more competitive economic environment. To become defensive and mad at the world wil not help. Let’s use this report to not further delay needed reforms.

RESUMEN NA PAPIAMENTU

Kòrsou tin lei fiskal dañino, esta leinan ku no ta konforme palabrashonnan internashonal segun e rapòrt di e Organisashon pa Koperashon i Desaroyo Enonómiko (OECD) Harmful Tax Practices – 2017 Progress Report on Preferential Regimes ku a keda publiká 8 dia pasá.

OECD a revisá 164 huridikshon rònt mundu i a haña ku 20, inkluso Kòrsou, no ta kumpli. No ta kumpli ku palabrashon ku ta prohibí hende òf kompania ku tin entrada geográfikamente mobil, keda sin paga belasting ku mester paga. Den nos kaso ta trata di e leinan ku ta ofresé fasilidatnan pa ku Ezone, eksportashon i dispensashon.

Mientras hopi pais a reakshoná riba e rapòrt, nos a keda ketu te ainda lokual ta prekupante. Nos sektor finansiero no ta pasando den su mihó tempu prinsipalmente si nos konsiderá problemanan ku bankonan koresponsal, un union monetario ku Sint Maarten sin kurso i e kaso kriminal kontra di e presidente di Banko Sentral.

Segun e rapòrt Kòrsou lo a bai di akuerdo pa kambia e leinan ariba menshoná. Mi punto ta ku nos no ta bai dilanti ku simplemente trese kambio awe i despues krusa brasa. E tipo di reglanan internashonal aki ta kambia periódikamente. Keda apliká un strategia di pone pleister kada biaha no ta duradero. Si nos ke pa nos sektor finansiero floresé, nos no por tarda mas pa trese e reformanan nesesario pa modernisá nos merkado di labor, fleksibilisá nos maneho di atmishon i tuma e otro pasonan pa hasi nos ekonomia kompetitivo.

The poison of fake news

You’ll never understand the pain of being at the opposite end of fake news until you are the one feeling it. Too many people have personally suffered or had their lives shattered by fake news. Few months before the election in 2016 a local morning paper quoted me in a made-up story saying that my opponent won thanks to corruption. Since the election was months away this was a deliberate lie. When I confronted the newspaper I was told, “it’s normal for writers to be creative when trying to make a point. No biggie”. Not only was I severely criticized, but my opponents greedily used this item during the campaign.

Fake news is not new. Pheme, the Greek Goddess of false news, was described as having multiple tongues and destabilizing those seduced by her trumpet thousands of years ago (see photo). I get that exaggeration and errors are inevitable in journalism, but fake news is something else -and much more dangerous: it is the spread of deliberate misinformation or fabricated stories with the intent to gain financially, politically or in popularity.

The bigger danger of fake news is when people act on misinformation. Hannah Arendt, in “The Origins of Totalitarianism,” asserted, “The ideal subject of totalitarian rule is not the convinced Nazi [..], but people for whom the distinction between fact and fiction no longer exists.” Fake news has pointed out a major flaw of our democracy: it is unsuccessful in guaranteeing good governments since it is subject to the irrationality which fake news today exploits. I have argued before that the time has come to evaluate our Western-style democracy which has not been reviewed since it inspired the French Revolution in the 18th century. Paradoxically the internet’s democratization of news outlets has proven a danger to democracy. People don’t really believe what they’re reading in the mainstream media, so they’re even more prone to want to believe other things that people are spreading.

Fake news is like poison that is injected in small doses. It undermines the very fundamentals of a democratic society. So how do we stop it? A handful of countries are in the process of preparing legalization to curb this. One difficulty they face is to come up with a consistent definition of fake news. The second important difficulty is deciding who is going to implement such laws. Governments? Mainstream media? Why trust them if they themselves are sometimes part of the fake news problem? A more viable alternative seems to be independent fact-checking organisations to fight the problem. But maybe the most durable solution is to educate people how to pick up and understand what is fake.

I do not have a silver bullet. I do not think anyone does. What I do suggest is for us to have a national conversation on this matter. Sooner rather than later. Our peace of mind and democracy depend on it.

 

 

The devil is in the details

The devil is in the details. Everyday it becomes more evident that local politicians who sold the Guangdong Zhenrong Energy (GZE) project as a celestial answer to the economic standstill we’ve been confronting for some decades, were blindsided by naïveté and even, I suspect, an unhealthy dose of self-interest. News this week about a decision of the Hong Kong High court followed by a ‘by the book’ PR to defend the Chinese ‘noble’ intentions in Curaçao, is no surprise.

According to a trusted source in Singapore, Titan Petrochemicals which is owned by GZE, announced recently that GZE has been ordered for winding up by the Hong Kong High Court. It seems these proceedings were started in 2016 in the Hong Kong Court of First Instance. In an official statement released on 27 September, 2017 Titan recognizes that: “the order of winding up of GZE may have material adverse impact on [Titan] and that it is seeking legal advise and further evaluation [..]”. Titan, a Hong Kong listed company with headquarters in Hong Kong, is due to conduct the LNG-Terminal in Bullenbaai. Titan has recently expanded its business activities to broaden income. Unaudited figures show that during the first half of 2017, this company lost Naf 15.5 million. No wonder Titan is nervous about the state of affairs of GZE.

That the Chinese try to do as if these disconcerting informations regarding GZE are somehow just fake news is worrisome. Let’s not forget that in China, the Communist Party (CCP) precedes any state owned company (SOE). This was clearly the case with the GZE’s representatives and CCP Members responsible for the press release this week. In China, SOE managers concurrently occupy party’s positions and are also expected to display political rectitude. A look into the charters of GZE and Zhuhai Zhenrong Company, the largest shareholder of GZE, shows that party’s leadership is the most important principle. “And this principle must be insisted on,” according to the Chinese President as reported in the New York Times, 13 October, 2016.

Because communists have yet to show they can successfully run capitalist companies, most of the SOEs which operate as monopolies, are in dire straits. So far the best idea Beijing had was to lump smaller inefficient SOEs together. So whilst the quantity of SOEs may have dwindled, now there are much larger inefficient SOEs. There are no indications that the CCP will be able to ensure competitiveness and efficiency. A major stumbling block is that SOE regulators are outranked in the party by SOE executives.

We must also carefully watch the huge China’s debt, expected to rise to 300% of GDP. According to the International Monetary Fund (IMF) this may soon lead to a financial crisis. Another IMF warning is that “China’s sustainable economic growth -growth that is achieved without excessive credit expansion- was much lower than actual growth over the last five years.” Complicating matters, debt in China is handled in a complex, non-transparent way of interbank loans and bonds.

What are the implications for Curaçao? We will face serious challenges if politicians keep assuming that GZE can fix our economic problems and use it as an excuse to further delay needed reforms in among others labor market and immigration policies. Another huge mistake is to assume that China’s SOEs will manage this project in Curaçao according to the arm’s length principle. Fact is that the Chinese do not have a proven ‘record of allocating resources efficiently’, even at home. Let us consider these details as relevant information in dealing with the Chinese. I suggest China drop the act that it is here because it somehow fell in love with the island. We know all about this kind of love in places like Zambia, Angola, Laos and Jamaica. Curaçao must seriously do its homework and use all resources available here, in The Kingdom and elsewhere to get the most out of this project. We have been warned.

 

Lès di 10-10-10

Den e artíkulo aki, 10-10-10 no solamente ta e fecha di nos status konstitushonal nobo, pero tambe e ta para pa e kontenido di e status. Na víspera di konmemorashon di e di 7 aniversario, mi ta konkluí un bia mas ku 10-10-10 a keda fundá riba un fundeshi defekto. Polítikonan a bende nos ku si sali for di e konstelashon di Antia Ulandes i bira Kòrsou outónomo, adelanto pa pueblo lo bin outomátikamente. Lo eliminá e buriku di karga i tur plaka di belasting lo keda akinan, garantisando bienestar.

Tabatin mandatario ku a mira 10-10-10 komo un remplasá “Antia Ulandes” pa “Kòrsou” den Statüt. No tabatin interes pa diskutí e struktura nobo di ámtenar, status di polítikonan sospechá i kondená pa sierto krímen, kalidat di nos demokrasia ni mehorashon di enseñansa ku ta e aspekto mas importante den desaroyo di un pais. A bai di akuerdo ku Ulanda su eksigensia pa krea un solo banko sentral pa Kòrsou i Sint Maarten apesar ku tur dos isla a skohe pa outonomia den maneho finansiero i makro-ekonómiko. Awe ainda nos ta usa un moneda di un pais ku no ta eksistí i ta mará den un union monetario sin kurso.

Echo ta ku esnan responsabel pa e desmantelashon tabata biba den nan mes mundu. Un mundu di pretenshon di éroe ku estatua i nòmber di kaya. No a traha riba e fundeshi, riba e kontenido. Un diferensia grandi por sierto tempu ku dr. Moises Frumencio da Costa Gomez (Dòktor) den añanan 40 a lucha pa nos outonomia. Dòktor, for di 1935 den su tésis ” Het Wetgevend Orgaan van Curaçao” i siguidamente den un seri di diskurso detayadamente a plantea e base filosófiko di e status konstitushonal nobo ku a drenta na vigor na 1951 (Interimregeling) i 1954 (Statuut).

Awe nos ta paga e preis haltu pa un kambio konstitushonal sin un fundeshi fuerte. Nos ta puntra unda e bienestar outomátiko a keda? Despues di 7 aña nos mester akseptá ku kambio konstitushonal so, no ta trese adelanto. Adelanto ta bin ku trabou duru i prinsipalmente ku kurashi pa tuma e desishonnan nesesario, apesar ku nan ta polítikamente impopular.

Mester stòp di kere ku ta otronan lo salba nos. Nos historia a demostrá ku e kerementu den milager manera Guandong Zhenrong, Sambil, 80/20, PDVSA, BOO, un tratado fiskal ku Merka, Texas Instruments no ta trese desaroyo duradero. Laga nos pone dilanti ku ta nos ta e proménan responsabel pa nos bienestar. Nos mester ta konsiente ku bienestar nunka a surgi diripente òf outomátiko. Laga nos drecha kalidat di e hendenan ku nos ta skohe pa representá nos i eksihí hende kapas ku no ta bolbe gaña ku nos problema ta asuntu di sistema di gobernashon o konstitushon.

Record-setting use of currency of a country that no longer exists

As part of the deal in 2008 to dissolve the Netherlands Antilles (Curaçao, Sint Maarten, Bonaire, Saba and Sint Eustatius) on 10 October 2010, it was decided that the common currency, the Netherlands Antillian guilder (ANG), would be maintained for Curaçao and Sint Maarten. “For a very short period,” we were told. This because the ANG would be replaced by a brand new currency of the brand new monetary union Curaçao and Sint Maarten (MUCS).

Today, 7 years after the dissolution of the Netherlands Antilles and the birth of the MUCS there is no new currency. Instead, the ANG of the defunct country is still in use which as far as I’ve been able to fact-check, is a world record. Curiously this topic came up during a conversation last year with an official of the United Nations banking institution (the United Nations Federal Credit Union (UNFCU)) who told me that the ANG did not appear anymore in its system meaning that someone who gets paid in ANG cannot get a loan or credit card from the UNFCU. How widespread this is, I do not know. Neither do I know if the authorities in Willemstad are even aware of this matter. Unnecessary confusion.

When Czechoslovakia was dissolved both the Czech Republic and Slovakia used the Czechoslovak koruna currency. In less than a year the two states adopted two national currencies. Shortly after the fall of the Soviet Union in 1991 local currencies were introduced in the newly independent states. The same thing happened with the dissolution of Yugoslavia, the breakup of the State Union of Serbia & Montenegro, the separation of South Sudan from Sudan and Timor Leste when it gained its independence from Indonesia. But why go halfway around the world? When Aruba left the Netherlands Antilles in 1986 it almost immediately introduced its own currency.

Sadly, this confusing situation, maintaining a currency of a country that does not exist anymore, is not the most important problem we are currently facing. The common definition of a monetary union is two or more countries with a single currency, one central bank, one monetary policy and convergence of macroeconomic policies. After 7 years there is no mechanism -not even on paper- to coordinate macroeconomic policies relevant for the monetary union. According to the Minister of Finance of Curaçao (2012-2016), when I questioned him in Parliament, the monetary union was “not a priority”.

Meanwhile under the watch of the two governments, the board of supervision of the Central Bank of Curaçao and Sint Maarten, we continue to think that somehow this monetary union will spontaneously function and be a success by pretending it doesn’t even exist. From time to time voices can be heard in Sint Maarten to step out of the MUCS and start using the U.S. Greenback which is de facto already taking place. In Curaçao the decision makers remain suspiciously silent.

The question is how the MUCS is going to function with a weakened Sint Maarten after the devastations left behind by Irma. How is a potential “free rider” problem, very common in dysfunctional monetary unions, going to be handled in the aftermath of Irma? What is the cost to preserve the MUCS – which was never based on one single economic feasibility study? Since Curaçao’s share of the MUCS is about 75%, is Curaçao going to pay for the lion’s share? Is Sint Maarten going to be pushed out or will Curaçao opt out?

I’ve always objected to the decision to have a monetary union between the two countries. My reasoning was that when political unions dissolve in separate countries/entities, this is done so that each party can pursue its own policies. If that were not the case, there should not have been any need for a separation in the first place I argued. So why did Sint Maarten and Curaçao form a monetary union? The Netherlands simply did not trust Sint Maarten to have it’s own central bank. So no monetary or macroeconomic arguments were used to arrive at the decision to come up with a MUCS.

As an avid sports fan, I am fond of records. As a former State Secretary of Finance, nothing makes me more nervous than this record-setting entanglement we are in. Question is how much longer are we going to dally without taking a decision? In any case if we want to be considered a serious international financial center this is definitely not the kind of situation we’d want to persist. Especially not when we throw in the mix the court hearings in the criminal case against the Curaçao and Sint Maarten Central Bank’s President that will take place at the end of this month.