Honorable Prime Minister,
“You must never confuse faith that you will prevail in the end—which you can never afford to lose—with the discipline to confront the most brutal facts of your current reality, whatever they might be.” — Admiral James Stockdale.
The full impact of the COVID-19 crisis is slowly becoming clear. Large parts of St. Maarten’s economy have come to a virtual standstill and Government’s revenues have decreased to a level never experienced before (including the immediate aftermath of hurricanes Luis and Irma). The Netherlands has made a proposal for additional funding which has not been well received by local political powers. In a presentation to the PNP, Prof. Mr. F. Kunneman stated that the island (Curaçao) did not really have a choice. If it did not accept the offer, it would run out of funds and the Netherlands would then be forced (or able) to establish a Kingdom Administrative Measure (Maatregel van Rijksbestuur) and interfere in local government. Our own Council of Advice has opined that while the proposal of the Netherlands would not win a beauty contest, it did offer room for conditions, and the Council of Advice underscores that the conditions did not “drop out of the clear blue sky”, but were based on advices of Ombudsman, Social Economic Council, General Audit Chamber, Central Bank of Curacao and St Maarten, Government Accountants Bureau SOAB, CFT and IMF. Consequently, it is time for a clear analysis of the situation St. Maarten finds itself in.
The reduction in foreign exchange income as a result of the dual crises brought by Irma and COVID-19 does not result in an import reduction that is directly proportional. As such, the lack of any significant additional foreign exchange (in the form of tourism dollars or liquidity support) income, puts tremendous pressure on keeping the Antillean Guilder pegged to the US Dollar. This decreases the stability of the currency’s value, which is considerable economic risk. No significant inflow of foreign exchange to at least cover the import deficit puts the currency in crisis. This needs no additional explanation and is assumed to be a known parameter in the overall analysis of the options available.
Sint Maarten will need (at the very least) another NAF 263.2 million to cover the 2020 budget as presented on May 5th 2020, and that is if, and only if, the revenues of government do not deteriorate further than was anticipated prior to April 2020. If all stays the same, at least a similar amount would be needed for the year 2021, again assuming government revenues stay around NAF 347 million. That brings the total up to an absolute minimum of NAF 525 million and if there were any desires to execute some very much needed investments (education, the prison, the social security system and the economy come to mind) much, much more is needed.
In fact, it is very well conceivable that much more will be needed if the numbers released late last month in a writing to the Second Chamber are any indication. These indicate a drop of over 74% in the revenues reported in May compared to April, when the full impact of the COVID-19 crisis was still to come and the longevity perhaps still somewhat underestimated.
Topping this off is the fact that even prior to the COVID-19 crisis the country was already unable to meet its obligations, hence the liquidity assistance for the years 2017, 2018, 2019 and 2020 provided to her by Kingdom partner The Netherlands. After this crisis, the liquidity gap will be larger than the sums provided for yearly. From its inception Country St. Maarten has not been able to book an actual surplus in any of the years of its existence.
Currently, what is left of the local economy, is staying afloat artificially with emergency help from several banks, insurance companies and private pension funds, as well as a temporary payroll support program that covers only a part of the economy and ended with support for June.
Cruise arrivals are firmly at 0%, while occupancy is currently hovering at less than 20% on average for Q2. Literally everyone has felt the impact of this crisis, employers and their employees, hotels, car rentals, taxi-drivers, restaurants, wholesalers, retailers, all service providers and even grocery stores. At the moment, approximately 3000 families, close to 25% of our official population depend on food support provided to them by local NGO’s, funded by the Netherlands. Significant global recovery, which in return impacts our recovery, is continuously being pushed forward, with US and European economists now predicting their recoveries taking a much slower route, then the previously anticipated/hoped for “V” shaped recession, consequently this means that, even in a very ambitious scenario, any local meaningful recovery should not be expected for years to come, as our economy’s recovery will lag that of our source markets.
Without any meaningful economic recovery from this crisis the government will have nowhere near enough income. Even if significant options for economic diversification were available immediately and these were viable enough to completely replace the approximate 85% of GDP that tourism contributes in St. Maarten’s economy (something to date not accomplished, see Report Economic Diversification Study 2006) – then still these would not be solutions for the immediate short- to medium term insofar as these will likely require significant additional investments and expertise may not be available locally (yet).
While we must diligently seek viable and sustainable options for diversification within our economy, and the format within which the island may continue in pursuing its guests may need to change radically - for the time being the segment Tourism is here to stay, and it offers an option for at least some commercial activity, and with that an upturn in government revenues, so we should nurture what little there is.
In addition to investments in product that are required, the global tourism market and in turn Sint Maarten’s target markets are suffering through its biggest upheaval, perhaps ever. Cruise lines are extending their return dates far into the second quarter of 2021, and major fleet reductions may negatively impact cruise traffic for years to come. In addition, cruise lines may consider adapting their initial schedules to domestic-only to overcome travel restrictions.
The global economic crisis has resulted in many millions of layoffs worldwide, many of these in the market segment (mass tourism) that Sint Maarten has targeted. The recovery of this group will take years, and mass tourism as we know it may not recover to levels previously enjoyed.
IATA indicates that full air traffic recovery may not be possible for years to come, with 2024 now being anticipated. While international travel remains sluggish because at least in part of the travel restrictions that COVID-19 has brought. Add to this an airport that has not yet been rebuilt, and there is enough reason to doubt immediate bounce-back capacity of the stay-over segment as well, in truth St Maarten has had difficulty ever reaching pre-Luis numbers.
It is high time to re-think the current strategy and execute a repositioning within the new tourism market and target the higher income tourist that represents perhaps less volume but a higher yield per guest. A strategy that’s also more naturally in line with the limitations of finite space on a small island and – considering we are bound to have a lot less guests in the very near future – what better time to reposition and upgrade now.
For this course of action, substantial investments and reforms need to be made. In order to ensure that these investments in economic repositioning and recovery are to remain sustainable, broad reforms are preconditional. These should encompass, apart from the economy, also areas of education, social security, healthcare, constitutional state and the government apparatus. A constitutional state that performs optimally, contributes to social trust, which leads to lower transaction costs, more investments, more innovation, a reduction of inefficient withdrawal of resources from the economy. By approaching the situation at hand, from a broad perspective, the aim is to increase the resiliency of both society as well as the economy simultaneously.
In short the Country will need to borrow an enormous amount of funds if the government wants to prevent a close-down of government and to be able to pay its employees and finance its programs, including fulfilling its obligations to APS and SZV (which manages a.o. the AOV fund) AND execute a strategy that ensures sustainable economic survival after 2021.
The options for attaining the funds, on a very short notice, for this are limited. Even an option recently mentioned in Parliament which in short boils down to the sale of shares in Government Owned Companies (GOC’s) to SZV isn’t very likely to yield the revenues in time to prevent a government close-down and at any rate would not stretch to include any additional shortfalls in revenue, natural disasters or any investments in broad reforms, upgrades or repositioning. In all, a limited one time, stop-gap measure at most.
If this is deemed as a viable option, consideration should be given to the fact that shares are being sold to f.i. SZV (via AOV fund) in order to attain funds to ensure a.o. the regular disbursements to SZV & AOV ... so borrowing from Peter to pay ….. Peter!?!? Apart from many other issues clinging to this option, anyone can see this will only incite a never-ending merry-go round of tax increases as there is no other way for government to raise the capital to repurchase these shares and ensure the required return on investment to keep the AOV fund healthy (at least 6% but more likely 8% if risk premium is factored in). In comparison, when approved by the CFT, the government can borrow at 2% in the Netherlands. That rate is 75% lower.
With regard to borrowing, the CBCS indicated that St. Maarten would not be able to achieve fiscal sustainability of the public sector finances in the next 20 years when continuing as is. Furthermore, their analysis showed that if the government wants the debt-to-GDP ratio to return to its pre-crisis level in the coming 20 years, it will not be able to borrow anymore after 2020. Their conclusion is that, only if the government were to cut its annual expenditures by ANG 50 million for a period of 5 years, starting in 2021, a sustainable fiscal path would be achieved. Otherwise, the fiscal path will not be sustainable. However, an expenditure cut this size may not be feasible, which exposes the unsustainable fiscal stance. Lastly the analysis indicates that there is a deep imbalance in the public finances and budget dynamics. Given the magnitude of this imbalance, single-track fiscal policy (growth-oriented or revenue-oriented or debt-oriented) will not result in a recovery. Therefore, the current situation demands an integrated approach which include a.o.; broad & sustainable economic reforms, public expenditure reduction & changed dynamics (f.i. the annual increase in wages & salaries in unsustainable), increasing public revenues by improving compliance.
An option available for the required funds at this is moment, is the Netherlands.
The conditions under which these funds can be obtained are known and have by now been vetted by numerous experts, including our own Council of Advice.
Under the conditions set out, which include a new Kingdom Entity, the Country is looking at a period of about 6 years during which Sint Maarten’s financial, educational and healthcare systems as well as the areas of social security, constitutional state and the government apparatus are fortified in order for a more resilient and thriving society and economy to emerge. The entity will provide both financial as well as technical support and oversee efforts to ensure the completion of the transition. This means that when the plans are completed successfully, Sint Maarten will emerge reborn. It will emerge with a thriving society and economy and in a much better position to take care of its citizens and ensure their wellbeing by securing fundamental human rights and freedoms, legal security and good governance.
Consequently, when deciding on “taking or leaving” the Dutch offer for help, and heeding Admiral Stockdale’s advice, let’s establish the brutal facts:
• A brutal fact is that Tourism will not “just” bounce back.

• A brutal fact is that our economy couldn’t sustain itself prior to the dual blows of the Irma & COVID-19 crises, let alone sustain an increase in social spending.

• A brutal fact is that using what little reserves there are, (AOV/AWW and/or APS and/or the CBCS) will not be enough to guarantee our economic future.

• A brutal fact is that we cannot lay any claim on Dutch taxpayers as we chose not to be part of their system and don’t contribute to those funds.

• A brutal fact is that the Country package for St. Maarten contains many projects that have been agreed upon as needed for the improvement of Country St. Maarten.

• A brutal fact is that in the very near future we will need additional liquidity support for both the public and the private sector.

It is seconds to midnight. Sint Maarten must find the courage to confront these brutal realities and grab the opportunity to improve its outlook for the long term. Any possibility should be, with properly structured stakeholder involvement, considered at this point.
Using autonomy, or the perceived infringement there upon, as an excuse not to exhaust all avenues for help amounts to throwing sand in people’s eyes. We continue complaining while doing little, all while a Kingdom instruction looms. When will we take collective responsibility for our shortcomings, grab the bull by the horns and start planning our revival with the help being offered through the reform entity? We can be as autonomous as we want to be, by showing that we have a grip on reality and are willing to do what is necessary to ensure the best possible future for our population.
Sint Maarten has had the good fortune to have been offered help from the Netherlands during one of the worst economic crises in history. Considering Sint Maarten’s geographical position within the so called “hurricane-belt” that’s saying something. While there will be a transition period in which the (political) autonomy may be temporarily affected, some strides can be made by ironing out some of the details as mentioned in the CoA report.
In addition, the SHTA urgently advises the government to engage in constructive consultations regarding the terms and projects that are listed in the “Country Plan” keeping in mind instable financial and economic state of affairs as well as the people’s well-being and the exceptionally precarious situation that the population is faced with.
Yours sincerely, on behalf of our Board and Our Members,

The St Maarten Hospitality and Trade Association (SHTA)

by Cdr. Bud Slabbaert

Economic recession, pandemic, and potential natural disasters may lead to gloom, despair, agony, deep dark depression and excessive misery. When it sounds like a hammer and feels like a hammer, it may actually be a hammer. One single word describes the biggest hurdle for renewal and progress: ‘clinging’; trying to hold on to what once was, although the conditions are changing. In these difficult times, the Caribbean has to learn to develop and strengthen itself in new ways. What is a ‘new way’? Development from within the region! Not trying to do anything about finding new ways, fits in the category ‘The Art of Suffering in Silence’.

For the development from within the Caribbean, three areas need emphasized attention:
• Inter-island trade
• Inter-island transportation
• Inter-island social activities (could be called inter-island tourism)

Nice suggestion, but who is going to do it or take the lead?
There may be only three, perhaps five territories that might qualify and be willing to explore the development-from-within-model. Preference is on working with “the willing and able” that are prepared to proactively and wholeheartedly take on a pioneer’s role. A track record of a previous stable economy and government are the top criteria. Three to five may appear to be a small group in a region 20+ territories.

There is no use for a group of candidates that would be, what they call in Texas the land of ranchers and longhorns, “all hat, no cattle”. Wannabees have no place in the development. Wannabees feel that they should have an equal say in the development. It would mean endless summits and committee meetings and very little progress, let alone to come to unified final version of the model. And even when it comes to an agreement, it would still remain questionable that it will actually be implemented. A small willing-and-able group can work faster and be more decisive and implement it among themselves. It is no time now for spinning wheels and not bringing tangible results.

There is much talk about the Pandemic, but little is said about a worldwide recession. It has proven in the past. that a major global recession will take a at least two-year recovery which brings one to 2022/2023. Experts in the various leading economies in the world have already signaled that this will be a record-breaking recession. Remember? When it sounds like a hammer… etc. There you go. And as for global, the Caribbean tourism industry is depending on source markets abroad.

A problem is that one doesn’t even know when we are at the height of recession yet. The impact is already felt. But when will the recovery really start or when will it end? Another even bigger problem is that no one can identify what the new normal will be and how it compares to the old normal. It may be considerably different.

One possible solution to tackle the new-normal dilemma is to take an initiative and actively create a new normal itself and that is where developing the Caribbean from within model comes in.

How might the development-from-within start. The three territories may agree on extending the group to five. They probably have some kind of relationship or trust in each other already. Let’s call them the Founders. These Founders should agree on appointing five to seven wise men. These are technocrats who are absolutely impartial and only have one thing in mind: redeveloping the Caribbean from within. They are not necessarily citizens or residents of the Founders. Competence and expertise are the criteria for their appointment. They will create the development model.

In general, the biggest problem that stands in the way of proper development are internal politics and policies, and not the development itself. Politicians, company shareholders and executives typically sit in a bubble, creating strategies that fit with their own perspective of the world, yet often ignoring all the external stakeholders or real-world issues. That is why impartiality and focusing on the region are so important.

How about resilience? Those who claim to be resilient, are often the ones who cannot repair the brakes and thus make the horn sound louder. Springing back or rebounding to former conditions or the former normal is not an option. The development from within model has to go beyond and cultivate change.

Yet still ? Why so few Founders? Mind that the European Union started in 1951 with only six founding nations (Belgium, France, German Federal Republic, Italy, Luxemburg and The Netherlands) in what was called the European Union for Coal and Steel. In 1957 it became the European Economic Community (EEC). It wasn’t until 1973 until Denmark, Ireland and the UK joined the six original founders. Countries that wished to join had to apply and fulfill certain conditions before being accepted as a member. Now the EU consist of 27 member countries that are obliged to follow the ‘common rules of engagement’. It is not the intention here to describe the history of the EU. The principle point is to start with a few competent Founders who have a common vision and are willing and able to come to results. Once the model or concept is established successfully, others can join.

And as for renewal and change? Quite often you can find inspiration in the world of entertainment. Artists and performers don’t have the stoppage that businesspeople or politicians do. Off-screen, actors and entertainers can say remarkable things and we laugh about them when we hear it, just because we would not dare to say it ourselves without blushing. Dolly Parton, the platinum blonde and curvy singer has said in interviews: “If I see something is dragging, sagging, and bagging, it should be pushed up!” Great advice for economy development!

by Cdr. Bud Slabbaert

In a previous essay, the “Development from within the Caribbean” was suggested. Up to five territories could be the Founders of such an initiative. Which territories is the first question that comes up. The willing and able to proactively and wholeheartedly and who are committed and competent to take on a pioneer’s role! Does that mean the ones with the largest economies, the highest growth rate, or highest GDP, or the richest? In that case, one would tend to think of the Dominican Republic, Trinidad & Tobago, Cayman Islands, Jamaica or Bahamas. Yet, those are not necessarily the criteria. Each socio-economy is different, regardless whether economic characteristics and challenges do exist. Even countries like St.Lucia or Barbados could be one of the Founding group. It all depends on what they potentially can offer each other in an inter-island development setting.

To put a Team together one must look at the talent, resources, opportunities and especially the determination to reach the objectives. Goals and results count. If one would put a sport team together, one may also insist on mental maturity. It would bring me in the doghouse when trying to explain what the latter means in government politics. The last thing that is needed are summits that end in a PR campaign whereby PR to be standing for PRomises and PRopaganda and no implementation. The only PR that is acceptable is PRogress!

One cannot make a strong chain out of weak links. About 15 or 16 territories will be standing on the sideline and probably moaning, criticizing, or hoping, while the five Founders will move ahead. That’s just the way it is; few are in the parade, a larger number is watching the parade, and there are some that don’t even realize that there is a parade. The ones on the sideline don't have to stay there forever, but they have to perform and prove that they are worthy to join. One could call that creation of motivation. They may start following some of the benchmarks that are set by the Founders. No one will be excluded from cooperating with the Founders, on the contrary; eventually they may be able to join the group if they subscribe to the standards developed by the Founders.

The aim is not to create a Caribbean Economy Elite Club. The aim is to develop an initiative and movement to eventually create a much needed new normal, a new socio-economic development from within in the Caribbean. That new normal sets the bar higher than usual and eliminates mediocracy. A likely major side effect will be that international investors will have an interest in the group of Founding countries. Businesses and financiers are usually getting involved where there is growth and progress. That could be called the creation of an appetite. The developments will also help the much-needed diversification of the economies.

Each of the Founders’ port or airport could become a transportation hub to connect with the rest of the Caribbean. The Founders, as the movers of the group effort and activities would work on improved direct connections between their territories when focusing their group development.

Once the Founders have found each other and feel comfortable about jointly taking on the new challenges, the first step may be to inventorize what each’s strengths, talents, resources, and opportunities are, and them bring them into a group perspective. It has to be looked at where exchanges are useful and should be further pursued. What forms of cooperation can create new opportunities? Regulations could be adjusted and standardized between them for the purpose of being smoothened and eased for inter-island trade and transportation.

There has to be a shared vision of the use ocean resources and available minerals or raw materials. Agriculture including horticulture and manufacturing of goods including creative products that may be exported. Tourism will not be ignored but it will need adjustments to develop more unique niche markets.

And who will be instrumental in all this. Probably it starts with one Founder willing to take on the lead and discuss matters with other potential originators. It would be wise to select a panel of seven “wise men” who are impartial technocrats. Five of those could be appointed by the five founders. Two should be from outside the group and who have a more pan-regional or global view. This panel could be called a “Council”. The Founders must trust and have confidence in this Council, and must be more than willing to follow its advice, or at least get into in-depth consultations. However, the Council to a certain extent, could make itself also available to other territories in the region, as such would help a future extension of the Founding Group.

Does the development from within the Caribbean mean that the region will be turned up-side down? Some things will remain the same, but overall new activities will be explored and cultivated. The image of the Caribbean for being known as one of the world's top vacation destinations may be altered to one of the most flourishing subregions in the world that is attractive for many reasons. The well-being of its, as many as 40 million residents on 28 territories, will be the overall objective of the development from within. It is just that a different method and route is chosen, than what was done before. And it could begin with just five Founders, the “willing and able”.

By Arlene J. Schar and Dr. David Leffler

We are currently living through unprecedented times of epic proportions.

Against the backdrop of a deadly relentless pandemic and its resulting economic and societal collapse, cities worldwide are under siege from the backlash of peaceful protests gone horribly wrong. These are challenging times for police. They are tasked with quelling the rising violence; often put in situations where split second decisions must be made in the heat of the moment: decisions often questioned in the aftermath by administrators and the public with no understanding of the conditions prompting those decisions.

We are now collectively experiencing a severe time of moral testing. We have an opportunity to rise to the challenge with new and better ways of solving our myriad societal flaws. Our challenge is in knowing what the most correct courses of action would be and in having the inner fortitude to carry out those correct courses of action. So — how can we most effectively create positive change during these troubling times of extreme social discord?

When answers elude the mind, those answers can be found within. Each one of us possesses the means to elevate not only our own consciousness but the collective consciousness of our entire country. With greater clarity of mind and a broader perspective, we will then see clearly the most positive courses of action to take in any given situation. Transcendental Meditation (TM) is a proven, effective way to do that.

TM is a non-religious, powerful brain-based technology. Extensive peer-reviewed research shows that is an effective means not only to reduce individual stress but also to effectively and efficiently reduce the high levels of collective stress causing insurmountable societal problems, thereby creating lasting peace. In particular, published scientific research has shown that when even 1% of a given population practices the TM technique, crime rates and other negative social trends drop sharply. And extensive research on the advanced TM-Sidhi program has repeatedly demonstrated that its group practice creates the same measurable transformation in social trends: positive solutions to ongoing problems occur naturally and society shifts from division to unity.

Consider: The TM-Sidhi program was utilized in Washington D.C. over a two-month period in the summer of 1993, where 4000 meditators gathered for an experiment to lower crime. The result, as documented by an independent board of criminologists, was a 24 percent reduction in criminal violence. This profound reduction in social stress also influenced the public approval of the US president, which suddenly changed from a negative trend to a positive trend, as predicted.

If members of police departments were to learn the TM technique, not only would they have access to a powerful tool for reducing violence, they would also gain benefits such as increases in calmness, clarity of mind, happiness, creativity, and energy, as proven by hundreds of independent research studies. This evidence-based approach is highly effective for stress-related conditions such as PTSD, brain function, and cardiovascular health. Here is a chart that illustrates the significant improvements in health and discipline experienced by officers and cadets practicing the TM program in the State of Bahia, Brazil. These improvements resulted in improved community relations as measured by a dramatic increase (1,206%) in the number of positive reports received by the Police Department from the citizens of Salvador.

While this approach may seem too simple to be true, sometimes the simplest approach is the most effective. We recommend the following book: An Antidote to Violence: Evaluating the Evidence, by Barry Spivack and Patricia Anne Saunders, which details in-depth the extensive supporting scientific research for utilizing TM to dispel violence and to alleviate PTSD. The current times of pandemic, protest, and economic collapse is the perfect opportunity for us to re-evaluate our approaches to all societal issues, and to evaluate for ourselves the usefulness of TM as a powerful tool for police to use in keeping the peace and also for their own mental health under stressful conditions.

Governments have no time to lose as the very fabric of our society collapses around us; we all need to come up with effective solutions to these issues and the resulting societal discord before is too late.