PHILIPSBURG--The country’s liquidity position is “at rock bottom,” says Finance Minister Richard Gibson, who has just requested an overdraft of NAf. 5 million from the bank to cover payments until the second week of January 2016. “We are in a crisis,” he said.

 

The country’s coffers are expected to be in a better state by next month to allow for the repayment of the overdraft, said the Minister.

 

There is no liquidity and no space in the budget for any manoeuvring, Gibson said at the Council of Ministers press briefing on Wednesday. “I cannot create something out of nothing. If it is not there you cannot spend it.”

 

St. Maarten has not had a balanced budget since it attained the status of country in the kingdom. “We have built up deficits that amount to some 60 million guilders in 2015,” the Minister said. The amount must be compensated for in budgets of the coming three years, starting next year with NAf. 20 million.

 

“It means if we have an average income of 445 million we have to start by deducting 20 million from that,” Gibson said. With that deduction, Government’s expenditure will have to be limited to NAf. 425 million annually.

 

Adding pressure to the country’s already dire financial situation is that starting September 2016 St. Maarten has to start repayment on the so-called debt relief given by the Netherlands on attainment of country status. St. Maarten is responsible for some 27 per cent of the total debt of the former Netherlands Antilles. That repayment will amount to some NAf. 26 million annually.

 

“How are we going to survive financially? How are we going to recognise there is a crisis? We cannot continue as business as usual,” said Gibson.

He pointed out that premiums to the Social and Health Insurance SZV, totalling some NAf. 70 million, and NAf. 80 million to the General Pension Fund APS had not been paid since 10-10-10. “It is only the tip of the iceberg,” he said.

 

The country’s debt, by Gibson’s estimation, amounts to some NAf. 200 million, which needs to be serviced over the coming years from an annual budget of around NAf. 445 million.

 

To get spending under control in Government, Gibson is poised to implement “stricter controls” on the budget of each ministry. That control will take the form of monthly reviews by the Finance Ministry of spending, instead of the once-a-year checks. He is yet to present this proposal to the Council of Ministers.

 

When tabled, the Council has “little choice but to adopt the proposal, because we are in a crisis,” Gibson said.

 

The Daily Herald