May 18, 2021 WILLEMSTAD - The structural problems that Curaçao is facing are, according to the new coalition partners MFK and PNP, to a large extent a consequence of following advice from the Netherlands. The leaders of the parties write this in a letter to the Undersecretary of Kingdom Relations Raymond Knops. According to MFK and PNP, this concerns the advice that the Netherlands has given in the past 25 years. With the involvement of the International Monetary Fund (IMF), a third, independent party is on board.
The coalition does not want to borrow money from the IMF, but wants to use the knowledge and experience of this international financial organization in the coming years instead of setting up a new body, in this case, the Caribbean Reform and Development Entity (COHO). The new coalition emphasizes the importance of implementing reforms on the island.
As previously reported, the parties that now form the majority in the Parliament of Curaçao want to embark on a path with the IMF; according to the method of Financial Programming and Policies (FPP), as former Central Bank president, Emsley Tromp argued.
A favorable side effect: with the IMF there is a third party on board as an independent and expert advisor, who can provide a decisive vision in situations of differences of opinion between the main parties involved (Curaçao and possibly also the Netherlands).
The leaders of the two coalition parties emphasize that they are not only "aware of the need for reforms", but that they have committed themselves to "far-reaching reforms" in the 2021-2025 coalition agreement and will implement them.
“We also recognize that potential financiers will impose conditions on their lending; We do not close our eyes to that either,” both MFK and PNP indicated. They say that they will not deal with the reforms in an "improper way". “That is why we have chosen the IMF. It does not seem to us that any interests of the Kingdom oppose this and we, therefore, assume that we do not have to enter into that discussion.”
The choice of the IMF - in addition to the extensive experience with the methodology of "financial programming" - also played a role in the fact that this organization has already pointed out, in vain, the systemic risk for local financial institutions a number of times.
"This risk, caused by crowding out as a result of the arrangement for the current subscription to government debt securities, is one of the reforms that will have to take place," referring to the bond loans that the Country of Curaçao will receive at very low-interest rates in the Netherlands.
In short, the new coalition is in favor of integrated financial programming and states that "there