First, more external financial supervision is important to safeguard more sustainable public finances. Currently in the financial supervision that we have regulated through the national ordinance the important norms are not included herein. This leads to a government that has no rules regarding the national budget. This has the consequence that we live in a reality where Aruba and its people are not guaranteed that the amount of our growing national debt is supervised annually.
There are several arguments regarding the autonomy of the country of Aruba and the budgetary law is also an argument that the government has indicated to be important. But the reality is that Aruba is already paying around more than 250 million florins in interest. One of the biggest challenges is that this government is not creating space to maintain and invest in public services. As all major actors have indicated, the government should begin to reduce its structural spending exponentially. While the financial model of Aruba’s government is to raise tax revenues, as long as the government does not reduce its spending, Aruba will not have a breathing space and more people will enter new poverty that will have devastating consequences for Aruba.
Arguments of the Government
The government presents the proposal that the Netherlands re-finance the covid loan at 3.1% instead of 2.7% of the Dutch local loan on the capital market. The Netherlands will experience a gain of 0.5%, the Secretary of State said, adding that this is an administrative expense on the part of the Netherlands.
The government backed the proposal that 16 members of parliament would not approve the Raft. Also the fact that the budgetary right will be undermined.
Argument from the Netherlands
Financial supervision is necessary because it guarantees that Aruba will be able to receive the re-financing at an interest rate lower than the local interest rate on the capital market and that this will be a positive outcome for Aruba as with these additional payments, the government of Aruba will retain less funds to invest in the local needs of Aruba.
The Secretary of State indicated that financial supervision would ensure that investors would have more confidence in the government of Aruba. Secondly, the Secretary of State indicated that the Netherlands itself is also subject to financial supervision by the European Union and financial supervision is a very common element in governance.
The Secretary of State indicated that if simply the government of Aruba regulates the budgetary norms in the national ordinance (Left) the chances that the parliament can change this are very high.
Presentation by mr. Arends/Raiz: This is the first time I’ve seen this.
The problem is the annual expense of more than 250 million that Aruba has to pay in interest. To resolve this Aruba needs the assistance of the Netherlands and that is not part of RAFT.
Supervision cannot take the place of governance
A letter was sent to the standing committee on kingdom relations and all Tweede Kamer faction leaders in the Netherlands dated 26 June 2023. In the letter MEP & Raiz faction leaders indicate that the interest-bearing refinancing should not be regulated via a rijkswet but can be achieved via a ⁇ leenovereenkomst ⁇ which will also provide the security that the Dutch government wishes to be able to repay this loan. It also mentions that touching the democratic deficit that exists in the kingdom and that public finances are a national issue is a matter for the government of Aruba, whose goal is also to achieve sustainable public finances.
What is my greatest concern?
The first concern is the fact that although the 30 million sounds small, it has an effect and the fact that the government is delaying to just tell the government that we will accept it so that we can then sit down at the table with the Dutch government to start negotiating a RAFT that works for all of us opts to postpone this as a consequence we will have to pay interest at 6-8% which is above the interest of the capital market.
Another point is the fact that in the letter sent to the Tweede Kamer, given the fact that it takes approximately 24 months for a Rijkswet to be finalized and processed, the Netherlands will offer the interest at 5.1% but for the maximum period of 24 months. This means that the government can accept the RAFT, give the state and change the LAFT including the norms that were anchored in the 2018 protocol, but postpone this big problem for the next government without Aruba having met a real solution that would be the interest at 3.1%. This will surely have its devastating consequences for a new structural poverty that will only continue to increase.
What should we do?
As a people it is important for us to realize that once again we will see our people’s representatives make a decision that will be important and will have a great impact on future generations. I promised and committed myself to the country of Aruba that I will stand primarily for the approximately 16 to 19 thousand children and youth who lack a voice, who do not have representation. I firmly believe that it is in their interest that we receive a parliament that demands from the government to provide the Netherlands with a ⁇ bestuurlijke akkoord ⁇ , so that Aruba can sit at the table and negotiate the best possible rijkswet for Aruba, in the interest and general welfare of the country Aruba. I propose to the government of Aruba to start working on a Rijkswet Aruba financially Toezicht ⁇ gearubaniseerd ⁇ , which ensures that the church and government can dialogue and reach points where we can all live together. Finally, as painful as it may be, in order for us to talk about the 250 million we are paying in interest, the government must set an example and start reducing its spending structurally, this also requires ⁇ weg schaafen ⁇ to look for where funds that cannot be justified are invested and free up funds to invest in the local needs of Aruba.
I would like to see an Aruba with a government where together we can work to achieve prosperity to get the father and mother living in a new poverty that was created by structurally bad financial management.
This has the consequence that we live in a reality where Aruba and its people are not guaranteed that the amount of our national debt increase annually will be monitored.’
