THE HAGUE--A General Measure of the Kingdom Government ("Algemene Maatregel van Rijksbestuur" AMvRB) for Aruba is off, at least for now. Talks between The Hague and Oranjestad about Aruba's public finances will resume next week.

 

A document of the Kingdom Council of Ministers, leaked to Aruba's news website Noticiacla earlier this week, suggested otherwise. The website mentioned a document drafted by Dutch Minister of Home Affairs and Kingdom Relations Ronald Plasterk. This document which was accompanied by a draft protocol and an AMvRB for a structural arrangement of financial supervision would be handled in Friday's meeting of the Kingdom Council of Ministers, the Noticiacla reported.

 

"Don't believe everything that you read in the media," Plasterk told reporters after Friday's meeting when asked about the leaked document. Instead, the minister commented that he would be travelling to Aruba next week for talks with the Prime Minister Mike Eman and Finance Minister Angel Bermudez.

 

Plasterk wouldn't say what exactly would be discussed, other than that the talks would focus on Aruba's public finances. Aruba has a high national debt which has been increasing steadily in the last years because of the substantial budget deficits. Aruba is the only Dutch Caribbean country that so far isn't subject to financial supervision by the Committee for Financial Supervision CFT.

 

The minister remained vague as to whether the process to invoke an AMvRB to institute financial supervision by the CFT has been started. He wouldn't divulge any information pending the talks with Eman and Bermudez he said. "We are talking. I will not give any further information for now."

 

Asked if the air was cleared between Aruba and The Hague where it came to financial supervision, he said that he was hopeful that a consensus and "wise solution" would be reached. The same applied to the discord between the Netherlands and St. Maarten about the establishing of the Integrity Chamber. He said that reaching a consensus on this matter remained a possibility.

 

About the reasons why the Netherlands was pressing for solid finances and supervision for Aruba, he said that the Charter stated that countries in the Kingdom were obliged to assist each other in acute (financial) situations. "That duty brings along responsibilities." The Charter states that the Kingdom Government carries the ultimate responsibility for good governance, and that includes solid government finances.

 

Aruba's public finances remain worrisome, even after the Eman cabinet took a number of measures to reduce expenditures. In a letter dated April 10, which was released last week, the CFT warned that the Aruba Government had done insufficient to adapt the 2015 budget and that the recommendations by the CFT were largely not executed.

 

The CFT urged Aruba's Finance Minister Angel Bermudez to carry out its earlier recommendations which included terminating the "structural growth" of government expenditures by ceasing cost of living adjustments, implementing a temporary solidarity levy, drafting a plan of approach to implement the proposed measures, and giving priority to improving the financial infrastructure/administrative system and multi-annual figures.

 

"These measures are highly necessary to arrive at a structural tenable budgetary position and to ultimately reduce the high government debt," stated CFT Chairman Age Bakker, who pointed out that measures needed to be taken at both the revenue and the expenditures side.

 

The CFT considered it a risk that the Aruba Government hadn't taken a decision on a number of austerity measures or that these measures were not in the implementation phase as yet. Some of these measures that are awaiting decision-taking or implementation include tax reform to increase revenue, the discarding of non-active civil servants, the restructuring of the local bus company Arubus, financial self-reliance of subsidised institutions and government-owned companies, the decrease of allowances, implementing a repair allowance in the loan structure of the private sector and rationalising of investments.

 

The CFT asked special attention for the tax reform, which should generate 55 million Aruban florins in savings for government. Chairman Bakker invited government to further discuss this matter during CFT's next visit to the island in June.

 

The CFT expressed concern that government seemed unwilling to stick to the balanced budget accord. It was observed, also by Aruba's Advisory Council RvA, that government apparently considered this accord as a guideline instead of a concrete framework.

 

Aruba is facing "great challenges" in the area of financial management. "This complicates the drafting of a realistic budget and the effective and efficient management of its execution," stated Bakker.

 

Prime Minister Eman implied earlier this week that the CFT was welcome to share its view on the public finances and to suggest recommendations, but that Aruba knew what was best for the country.

 

The Daily Herald