Friday, October 22, 2021

April 8, 2020 The legal mandate of the Cft is to monitor the fiscal situation in the countries of Curaçao and Sint Maarten based on the Rijkswet Financiele Toezicht (Rft.) On March 27, 2020, the Council of Ministers of the Kingdom of the Netherlands (RMR) invoked article 25 of the Rft allowing Curacao a period of noncompliance with article 15, sub 1 of the Rft.

 Pursuant to this decision, the Cft was asked to advise the RMR on the liquidity needs of the countries for the month of April related to the COVID-19 outbreak. With this request, Cft was accorded a task potentially in conflict with its legal mandate to report the extent to which the countries are complying with the Rft.  In the CFT’s recommendation of April 7, 2020, to the RMR, it appears that these seemingly contradictory tasks have necessarily permeated the Cft’s advice.   On various points, the CFT’s recommendation seems guided by the committee’s legal function rather than the current urgent situation confronting the countries as a result of the COVID-19 crisis.

The very fact that the RMR invoked article 25 of the Rft implies that the countries are allowed to deviate from the provisions of article 15 sub 1. Yet Cft overlooks this fact in its advice to RMR and continues to insist on Curacao’s adherence to the provisions of article 15 sub 1 as contained in its previous recommendations.  The objective of Curacao’s request to the RMR was to obtain the necessary funds to finance among others the extra healthcare expenditures needed as a consequence of the coronavirus outbreak and to provide assistance to the private sector to avoid an economic catastrophe.

Cft starts its response to RMR by acknowledging that the loss of revenue of the government of Curaçao is realistic based on the projections of the Central Bank. It emphasizes that those projections may actually be on the lower side since they were premised on the partial lockdown in effect at the time, and a total lockdown was promulgated on March 30, 2020.  According to a recently issued Note, IMF estimates the 2020 financing fiscal gap for Curaçao at 22 percent of the GDP comprising both a shortfall in fiscal revenue and higher expenditure.

CFT Evaluation of the Curaçao request

  1. In its evaluation of the strategy underpinning Curacao’s request for financing to the RMR, Cft states that the reallocation of the funds in the context of the groeistrategie is inconsistent with previous agreements.  In addition, the other measures announced by the government do not seem to get Cft’s approval. However, Cft’s evaluation is in contravention of the RMR’s decision to allow noncompliance of article 15 sub 1 for Curaçao.
  2. Cft is further of the opinion that the measures proposed by the government should be more austere given Curacao’s fiscal situation. The Cft is of the opinion that the private sector is not making sufficient sacrifice. Here again the committee overlooks the overriding objective of the government’s assistance program underpinning the financing request. The very fact that the sector will get 80% of the relevant minimum/SVB wage benchmark, implies in itself a sacrifice of at least 20%. The Cft departs from an economic contraction of 14.9% as projected by the Central Bank. By arguing for a much more austere program, Cft is increasing the downside risk for the Curaçao economy.
  3. As support for small and medium-sized enterprises, the government proposes a credit facility to maintain productive capacity. In its evaluation Cft states that the sector itself has to make a larger contribution to the credit facility. The credit facility is based on the projected needs of the sector. To the extent that a small and medium-sized enterprise does not make use of the facility and uses its own funds or seeks access to other sources in itself implies a sacrifice by the sector.  Arguing that the sector needs to make a larger contribution seems presumptuous.
  4. Cft also is of the opinion that an additional supplement for the “onderstandtrekkers” is not sufficiently argued since it does not seem to have a direct link to the current crisis. What Cft again overlooks is that in practice the “onderstandtrekkers” allowance is a de facto supplement. Therefore, the economic standstill means that their primary income also would have dried up.
  5. While Cft argues that Curaçao should not deviate from previous agreements when it relates to, among other things, the groeistrategie, the committee does not maintain the same line of reasoning when it comes to the begrotingskamer and national planbureau, for example.
  6. The Cft concludes its evaluation by arguing that Curacao’s budgetary situation does not justify additional loans preferring instead a more austere package financed by creating the necessary fiscal room in the current budget. Here again, the Cft seems to argue against the RMR decision of March 27, 2020. Before the corona crisis, it was contended that social constraints prevented the creation of any additional fiscal room. By arguing now in a much more untenable situation for additional loans, Cft again seems to be insensitive to our current social economic realities.[1][1]

Liquidity Needs

  1. In determining the liquidity needs of the government, Cft seems to condone the buildup of arrears when it refers to SVB since the committee does not have sufficient insights into the liquidity of SVB. The government should regularize its arrears. It should not depend on Cft’s insight into the liquidity position of any institution.
  2. Cft is using this opportunity to advise the RMR to draw its attention to Cft’s previous advice rather than advise the RMR within the context of the current coronavirus crisis. This again reflects the conflicting situation for Cft as it had to advice the RMR on matter it previously as advised against.
  • The additional monitoring suggested by the government for this special program gets only lip service from the Cft. It is not clear to me why the Cft does not seem to support this additional audit function proposed by the government to monitor the rescue program.

[1] In a Note dated April 6, 2020, titled “Curaçao and Sint Maarten: Impact of COVID-19,” the IMF stated that “Assuming that financing is provided as loans, the debt-to-GDP ratio in Curaçao would rise to close to 90 percent of GDP, and in Sint Maarten to 91 percent of GDP in 2020.” These disproportionately high debt-to-GDP ratios were the overriding criteria used by Holland to provide the island with debt relief in 2009. Allowing them to again reach those ratios is tantamount to denying them the possibility to realize one of the most important objective of the 10-10-10 constitutional restructuring.

SXM Radio Online


September 7, 2021  NEW YORK (AP) — Actor Michael K. Williams, who as the rogue robber of drug dealers Omar Little on “The Wire” created one of the most beloved and enduring characters in a prime era of television, died Monday. Williams was found dead Monday afternoon by family members in his Brooklyn penthouse apartment, New York City police said. He was 54. His death was being investigated as a possible drug overdose, the NYPD said. The medical examiner was investigating the cause of death. Little, a “stick-up boy” based on real figures from Baltimore, was probably the most popular character among the devoted fans of “The Wire,” the HBO show that ran from 2002 to 2008 and is re-watched constantly in streaming.

September 8, 2021 LOS ANGELES (AP) — Britney Spears’ father filed Tuesday to end the court conservatorship that has controlled the singer’s life and money for 13 years. James Spears filed his petition to terminate the conservatorship in Los Angeles Superior Court. “As Mr. Spears has said, again and again, all he wants is what is best for his daughter,” the document says. “If Ms. Spears wants to terminate the conservatorship and believes that she can handle her own life, Mr. Spears believes that she should get that chance.” Judge Brenda Penny, who oversees the case, will need to approve the move. Britney Spears attorney Matthew Rosengart said in an email the filing “represents another legal victory for Britney Spears — a massive one — as well as vindication for Ms. Spears.”

September 8, 2021  NEW YORK (AP) — With Katie Holmes and Lil’ Kim on his front row and singer Marina on the mic high above his runway, Christian Siriano helped kicked off New York Fashion Week’s first big pandemic round of in-person shows Tuesday with a flurry of neon and lace-inspired in part by all the Italian women in his life. From ornate Gotham Hall, beneath a stained-glass skylight 70 feet up, Siriano’s commitment to size inclusivity was never stronger as he opened and closed the show with plus-size breakout model Precious Lee. She first walked in a stunning yellow trouser suit with wide loose pants and an asymmetrical jacket, a matching crossover bralette underneath.

September 7, 2021  VENICE, Italy (AP) — Paul Schrader knows he has a limited number of films left, so whatever he does from here on out is going to be for himself. At 75 years old, the writer of “Taxi Driver” and “Raging Bull” and director of “American Gigolo” and “Mishima” was even somewhat prepared to call it a day after his 2018 film “First Reformed,” for which he got his first Oscar nomination. He didn’t want to. He just knew it might be the reality. “I thought I would go back to this character again for about the fifth time,” Schrader said in a recent interview. By “this character” he means “the man in the room.” It’s Travis Bickle. It’s John LeTour. It’s Julian Kay. And it’s a formula he’s been working with for 45 years.

Business News

September 8, 2021  -Stocks were mostly lower in Asia on Wednesday after a lackluster session on Wall Street, where weak jobs data and pandemic concerns weighed on sentiment. Shares rose in Tokyo after economic growth for the April-June quarter was revised upward to an annualized 1.9% from an earlier estimate of 1.3%. “Any feel-good factor was ignored, though, given the climb was less than half of the 4.20% fall in Q1,” Jeffrey Halley of Oanda said in a commentary. “Japan will be lucky to break even this year as the current Covid-19 wave will almost certainly have weighed on domestic consumption,” he said.

September 8, 2021 NEW YORK (AP) — There will be something missing at two Whole Foods stores opening next year: the rows of cashiers. Amazon, which owns the grocery chain, said Wednesday that it will bring its cashier-less technology to two Whole Foods stores for the first time, letting shoppers grab what they need and leave without having to open their wallets. Cameras and sensors track what’s taken off shelves. Items are charged to an Amazon account after customers leave the store with them. But there will be an option for those who want to shop the old-fashioned way: Self-checkout lanes will be available that take cash, gift cards and other types of payment. Amazon first unveiled the cashier-less technology in 2018 at an Amazon Go convenience store and has expanded it to larger Amazon supermarkets. But it will be the first time it has appeared at Whole Foods, a chain of more than 500 grocery stores Amazon bought four years ago.

September 8, 2021  BEIJING (AP) — An avalanche of changes launched by China’s ruling Communist Party has jolted everyone from tech billionaires to school kids. Behind them: President Xi Jinping’s vision of making a more powerful, prosperous country by reviving revolutionary ideals, with more economic equality and tighter party control over society and entrepreneurs. Since taking power in 2012, Xi has called for the party to return to its “original mission” as China’s economic, social and cultural leader and carry out the “ rejuvenation of the great Chinese nation.” The party has spent the decade since then silencing dissent and tightening political control. Now, after 40 years of growth that transformed China into the world’s factory but left a gulf between a wealthy elite and the poor majority, the party is promising to spread prosperity more evenly and is pressing private companies to pay for social welfare and back Beijing’s ambition to become a global technology competitor.

Fashion News

“Representation Is the Bare Minimum”: Modeling’s Biggest Stars Speak Out