Philipsburg:---This agenda point has been requested by the faction of the Democratic Party in the island council and not without reason.
But before I go into the reasons, let me explain what we expect out of this meeting. In our opinion, we have passed the stage of “government, do something about it”. But we are asking the government, what can we together do about it? To get to that point, however, government needs to be forthcoming with information, with data, that only they have or can get.
There is no denying that the financial and economic situation of our island and that of its citizens is on the mind of every inhabitant of this island. Whether it is business, labor or government, how our people are faring must be a concern to all.
The effects of the global financial crisis and the ensuing economic slump, especially in the United States have hit this region hard and St. Maarten is no exception. In fact, regional reports suggest that the Caribbean economy is close to a depression.
(15 JULY 2009) THE GROSS DOMESTIC PRODUCT (GDP) OF LATIN AMERICA AND THE CARIBBEAN WILL CONTRACT 1.9% THIS YEAR, RAISING UNEMPLOYMENT TO 9% AND AGGRAVATING POVERTY LEVELS, ACCORDING TO THE ECONOMIC SURVEY OF LATIN AMERICA AND THE CARIBBEAN 2008-2009 PUBLISHED BY ECLAC.
LOWER EXTERNAL DEMAND LED TO A 30% VALUE AND 7% VOLUME FALL IN EXPORTS DURING THE FIRST QUARTER OF THIS YEAR WITH REGARD TO THE SAME PERIOD IN 2008. REMITTANCES ALSO DROPPED (5%-10% BETWEEN THE FOURTH QUARTER OF 2008 AND THE FIRST QUARTER OF 2009). FOREIGN DIRECT INVESTMENT FLOWS ARE EXPECTED TO DECREASE 40% THIS YEAR DUE TO THE GENERAL DETERIORATION OF FAMILY AND BUSINESS EXPECTATIONS, WHICH NEGATIVELY AFFECTED CONSUMER AND INVESTMENT DECISIONS IN THE PRIVATE SECTOR.A CURRENT ACCOUNT DEFICIT EQUIVALENT TO 2.3% OF GDP IS EXPECTED FOR 2009, COMPARED TO THE 0.6% OF GDP DEFICIT OBTAINED IN 2008. THE TERMS OF TRADE WILL ALSO FALL 10.8% THIS YEAR, FROM A 3.0% INCREASE IN 2008.
ALL OF THIS HAS IMPACTED THE LABOUR MARKET. FROM EARLY 2008 TO THE FIRST QUARTER OF 2009, OVER A MILLION PEOPLE HAVE LOST THEIR JOBS IN URBAN AREAS, AN INTER-ANNUAL RISE IN UNEMPLOYMENT OF 0.6%. THE UNEMPLOYMENT RATE IS EXPECTED TO INCREASE FROM 7.4% IN 2008 TO ABOUT 9% THIS YEAR, LEAVING AN ADDITIONAL THREE MILLION PEOPLE WITHOUT WORK. THIS WILL BE ACCOMPANIED BY GREATER LABOUR INFORMALITY, WHICH WILL AGGRAVATE POVERTY LEVELS AND MAKE COMPLIANCE OF THE MILLENNIUM DEVELOPMENT GOALS MORE DIFFICULT.
While some might feel that the aftershock of this all to the economy of Sint Maarten was not as severe as other places, far and near, the effects of such have crept up on us and are spreading rapidly.
In the first quarter, and even into the second quarter of this year, we have held our ground somewhat.
Not to say that the economy was booming, but we managed, without a serious collective (!) effort really, to somehow hold it together until now.
Surely, several factors can be attributed to this:
We were on an upswing, and so you saw a slowing down, before an actual decline.
The flexibility of our people and as an extension of our economy kept us going, when others were already reeling from the effects of the global crisis.
If this were not the case, then surely, it would be unthinkable that the government of Sint Maarten (mind you, I am using the collective term) could take so long to come up with what has been dubbed an economic stimulus package.
I use my words very carefully. And I do so, hoping to avoid even the perception of looking for some-one to blame.
This matter, in our opinion is one in which the quicker we can find each other, the better it will be for all the people.
Recognized agencies, representatives of business, labor or even of government have a platform from which they can launch their queries, suggestions, yes and even pressure for governments to act.
But what about the man and the woman in the streets?
They too hurt. They too wonder.
We might try to dispel or downplay this fact, but people are losing their jobs. Right here on Sint Maarten and it is happening today.
A serious deficiency that we have as an island, is the lack of a statistical agency, where economic information can be collected, analyzed and made available to policy and decision makers in a timely fashion. An agency that functions on the basis of a law and where cooperation with that agency in terms of providing truthful information is obligatory.
In the absence of such, we go by bits and pieces from different sources, difficult to assimilate, because of the lack of synchronization.
The airport collects its data, the seaport does the same, there are tourism statistics, labor statistics, banking statistics, marine statistics.
What do they tell us?
I know what people tell us. And it is not only me. Because the very things that I am saying today, not too long ago, the former opposition was saying as well.
What are we hearing on the streets?
As I said before, people are losing their job. The control on the labor market is not as effective as it should be.
Business is hurting! There is no denying that fact. And of course, one has to do with the other. That businesses look for cheap labor is a consequence of the foregoing as well. Or better said, it is exacerbated by the foregoing. It is made worse.
I think I am preaching to the choir here. But there is much more to it. The effects of all of this on our community, on the mental state of our citizens are alarming.
And I know that there are always extenuating circumstances. E.g. if I tie in to what I said earlier about joblessness, and speak of families who face poverty because of this, I acknowledge that it is not the only reason.
Some people who have work, face poverty. They either don’t make enough or they do not have their priorities right, that also happens.
But if we can agree here today, that large sectors of our community are hurting; that prospects for economic recovery are not immediate, that there is no one group (in our out of government) responsible for this malaise, then we can go one to the next topic.
What can we do?
Again in my opinion, people need to hear some-thing concrete. Something tangible. Hope for the future gives strength to weather the storm.
There might be a legitimate reason for the delay in arriving at a economic stimulus package. I don’t know, but if there is, government should explain this. To the island council and to the people of this island.
Is there some type of relief for the average citizen? If there is, can we hear about it? I would not have to break my head about suggestions for relief, if something is already in the making.
Has any-one checked their utility bill lately? Especially electricity? Has any one of us in this council wondered how the person on a low and fixed income is able to survive? Well I have and I have not come up with the answer.
What is in the package for these persons?
What about the elderly? Has government considered this group?
Has government analyzed the effects of the medical insurance for 60-plussers by the SVB?
And I stress, by the SVB.
Because I know that the DP-administration was busy with amendments to the medical care ordinance, specifically to deal with medical insurance for the elderly. As you might know, if the income of an elderly is above a certain maximum, that person can not receive a government doctor card. However, the elderly, the pensioner who has a little apartment or 2 on rent along with his or her pension, cannot get a government doctor card. And for doctor consultation and the like, that person might not even want a doctor card. But when it comes to a chronic illness, such as cardiovascular, cancer, diabetes, and others, this can wipe out whatever little savings that person has. Insurance is out of the question for this category.
And I know we are working on a general insurance, but for now, will government finalize the amendments to medical ordinance for the elderly?
If not, does the government have the assurance that the recent SVB policy which is yet to be put in law, and which details are unknown to our faction as least, will fill this gap?
Does the government concur that this SVB policy should be publicized and explained consistently to the people of Sint Maarten?
We know our people. And if they once know that after pension, you get no medical coverage from SVB, they are not going back to the SVB.
What about some ads on tv and radio?
But again, and before anything else, has government analyzed this SVB proposal and what are the benefits, compared to e.g. the expansion of coverage via the government doctor card system?
In essence I ask the government a couple of things:
What is the status of the economic stimulus or economic relief package?
What are the immediate prospects for the elderly and their medical care?
Give us the data regarding unemployment and the trends in the last 6 months or so.
Performances of key sectors such as the harbor, airport and marine and the prospects for these sectors for the coming season?
Any information on real estate performances?
By the way, 2008 budget figures of the central government for transfer tax on Sint Maarten were surpassed and one of the budgetary adjustments was this post, adjusted upwardly with 3.9 million guilders
The same holds true for turn-over tax, also an upward adjustment of 5.4 million guilders. You see why it is important that data is collected centralized and analyzed. Does the government have information how real estate transfer tax and turn-over-tax have been performing in 2009?
We are advocating as the Democratic Party, considering the transfer of responsibilities from the central government to the island government; that as far as we know the central government has not yet broken down their budget to transfer the funds along with the tasks, and given the surplus on the central government, which has now become a reserve, we don’t think it is a cry in the wilderness, to seek either a reduction in the turn-over-tax by the central government or a bigger portion than the one-third to come to the island government. Because if the latter happens, then the island government can reduce income and profit tax that will benefit the business and the consumer, and thus stimulate the economy. I recognize that the island government can only reduce the surcharges on the profit and income tax. And while it means less revenue for the government, the question is whether government is willing to bear this loss for the gain of the entire community.
That is a question to the government?
Again, maybe this is part of the impending package of relief. We just don’t know.
What economic model has or will the government use for this package of relief? Where matters like, should the government get or keep the money or should it go in the pockets of the citizens can be analyzed?
I just want to have a sensible discussion with government on these matters. One of the council members of the other faction always refer to the DP faction as a minority government. This is not correct. A minority government is a government. We are not the government, but we are part of the governance of this island.
Part of the highest governance of this island.
The last part of my discourse ties into the finances of government.
Members of the faction of the Democratic Party have been asking questions regarding the finances of government. Unfortunately to no avail.
However, again we are not blaming any-one for having to amend the 2009 budget. We would have had to do it, if we were in government.
When can we expect the amendments to the budget of 2009 to reach the island council?
Will these amendments include: any additional cost for compulsory education; the reduced work permit fee for certain categories/
How much has the change of government on June 8 cost the tax payer, in terms of additional personnel, office equipment and vehicles? Were the applicable financial rules followed for the purchase of office equipment and vehicles?
Can we receive an overview of the monthly income and expenditures of government for 2009? These are available at a press of the button. Can we have it before this meeting is over?
The point is that there is information that the NA/Heyliger executive council has to submit information to the island council, which they have not.
The quarterly reports, according to the Kingdom resolution on the CFT. We haven’t received the first quarter, let alone the second quarter, which was due on mid-august. What we have heard from the Commissioner of finance and that was on July 17th was that the first quarterly report was submitted to the CFT and it “was well received”. Now that might be so, and that is not the issue, The issue is that in accordance with art 18, these reports must be sent to the island council. Why have we not receive any of these reports?
On July 31st, the Commissioner was still of the belief that the 2010 draft budget and the annual financial accounts should be ready by August 15th. A month later, where do these matters stand? Annual accounts and draft 2010 budget?
The Commissioner of Finance stated publicly that the 2010 budget, which by the way is overdue, can not be balanced. In broad numbers, explain the island council what the total of the draft budget 2010 is, and which are the largest components of the deficit?
These are the numbers I suspect that the Commissioner will be pleading his case with for permission to submit a budget with a deficit, so these numbers must be known.
This question I have before: what is the overall financial standing of the government-owned companies, especially in a dividend relationship with government. (All of them should be, but we know some are just not making money)
I think more than 2 weeks have passed, but I have not received any information regarding SLAC and the fees charged by that government company? That company too, I would like to know how it stands?
Can this government tell us: what is going to happen with GEBE? With all the debacles, can the consumer expect relief in this area? If not, why not?
How is the government going to prioritize its spending in the light of the economic slow-down (some prefer melt-down) according to the following pillars?
Human resources (personnel)
How will this differ from let’s say, what was spent in these areas in 2008?
What is the status of the payment by the Netherlands to the outstanding creditors of the island territory?
In how far have the stipulations regarding government’s bank accounts been apply? Article 22 of the Resolution on Financial Supervision:
I am going to try from the financial angle to get an answer as to whether there is an agreement with the Dutch Government as prescribed by the Resolution on Financial Supervision on the matter of corporate governance? Article 32.
I wish to interject here that good governance and good corporate governance (buzz words lately) also encompass the elements of accountability (to the island council); openness and transparency (towards all citizens and especially the taxpayers) and dialogue (with stakeholders). Communication is also an element of good governance. In fact, without these elements, the formal parts of good governance (laws, policies and ordinances), will remain exactly that: formalities, on the books.
And finally; considering the agreement between the island government and the central government of June 24th last and the efforts up until then to have the consultancy of KPMG provide the support to establish and strengthen the services of country Sint Maarten, have these efforts been abandoned? Has the input by KPMG been changed? What in essence is the status now? What has it cost government until now? Or until it was stopped?