PHILIPSBURG:--- Economies across the world have been negatively impacted by the COVID-19 pandemic and St. Maarten is no exception. The necessary measures of closing the borders in order to control the spread of the virus have resulted in a practical halt of all economic activities on the island. The foremost affected are all economic activities that are directly related to tourism; the so-called frontline or first tier. Depending on the source and what is considered “directly related, indirect and induced”, tourism accounts for 50 - 80 % of the GDP of St. Maarten. This further cements the need for substantial financial injection considering the current dilemma.
The severity of the economic and social impact can be considered even more profound than others in the region or internationally as the country finds itself in the recovery phase after Hurricanes Irma and Maria, which divested the island in September 2017. There is already a high level of uncertainty, which is further exacerbated by not knowing how long this pandemic will last and how long it will take the global tourism sector to start recovering. This coupled with St. Maarten heading into its low season and hurricane season, puts the island in a vulnerable position.
The government acknowledges that it is imperative that adequate measures are taken to absorb the economic and social impact of this new shock and to achieve rapid recovery of the economy. Businesses that are severely affected will need financial assistance and for those who risk losing their jobs, the creation of a social safety net is essential. These measures are presented and outlined in more detail below.
The Government of St. Maarten has put much effort into following the guidelines set forth by CFT for the budget 2020, but it is clear that the budget cannot finance the measures necessary to safeguard the health of the population, avoid social unrest and disruption of the already fragile economy. St. Maarten has implemented all measures in their power up until this point, however, we need the support of The Netherlands.
The Ministers of Finance of St. Maarten Ardwell Irion and his team, with the information and recommendations gathered by the Emergency Support Function’s and their relevant teams and task forces (EFS) prepared a Support Relief Plan – SRP. Together with the relief and programs the plan includes the cost of the plan which forms part of the request to The Netherlands and totals ANG 254 million for the first 3 months.
The SRP covers “direct relief” which includes a payroll support program, income support program, a soft loan program as well as an under-employed program for an amount of Ang 108.44 million. For the unemployed, the established unemployment benefits will continue. The SRP also includes funds to compensate for the loss of government income for an amount of Ang 89.2 million which is needed to enable government to carry out already existing but now expanded programs, a food vouchers program and a food boxes program for the most vulnerable groups, meals for the elderly and psycho-social care.
For the additional healthcare expenses, an amount of Ang 56.28 million has been budgeted and is intended for additional healthcare expenses as well as support to SZV and the St. Maarten Medical Center.
The request has been prepared in close consultation with the CFT and with guidance from the IMF.
