Willemstad/ Philipsburg:---The renewed discussions on dollarization make it imperative for St. Maarten to re-establish its position on the choice for a monetary system and currency.
After initially weighing the different options in 2000/2001, including dollarization, the choice of St. Maarten was one for its own central bank system and currency.
With the subsequent agreement that St. Maarten and Curacao would have a joint central bank, the position regarding St. Maarten’s own currency was maintained, however this currency and central bank would be a joint undertaking with Curacao.
This agreement entailed a replacement for the Antillean guilder and a Central Bank in which both entities would participate.
From all indications, this position was one shared by the Central Bank of the Netherlands Antilles until now.
With the Bank’s recent announcement that dollarization is worth serious consideration by the new countries of Curacao and St. Maarten, we are in essence being called upon to state (or re-state) our position on the central bank/currency issue.
While the conference on dollarization on August 24th was surely informative, it can be safely concluded that there is no “one size fits all” solution and no template to be copied and applied.
At the end of the day, this is a matter for each entity to assess on its own. Time is of essence and the question would be if at this stage and the many priorities on our plates, whether we have the time and resources to dedicate to such an assessment.
But one thing stood out clearly and cannot be emphasized enough if we wish to entertain the proposal of dollarization for St. Maarten and that is that this concept requires a strict fiscal discipline. Without some type of supervisory body, the matter of fiscal discipline is paramount.
With respect to the compelling argument of a deficit in the balance of payments on the current accounts of the Netherlands Antilles, St. Maarten must also determine for itself how we fare as an island in this respect.
In my opinion, this matter of the monetary system can not be seen separately and should not be tackled separately from the fiscal regime and in particular the tax system to be considered for country Sint Maarten.
Finally, the discussion on “to dollarize or not” must be started post haste on Sint Maarten and not only in the board rooms, but even more so in the wider community. Something that the Democratic Party is committed to.
