Aruba and Curaçao have agreed to liberalize their economies in order to qualify for continued financial support from the European Netherlands, without which the islands would almost certainly go bankrupt.
The coronavirus pandemic has brought tourism, on which the islands depend, close to a standstill.
Time is running out for the autonomous Dutch islands in the Caribbean to do a deal with their former colonizer.
Coronavirus has brought tourism, the mainstay of the island economies, close to a standstill. Tax revenue has dried up while unemployment has soared. Without support from the European Netherlands, the governments of Aruba, Curaçao and Sint Maarten will run out of money in weeks.
The government of the Aruba, a Dutch island in the Caribbean, has presented a five-point plan to restructure its tourism-dependent economy, which has been decimated by COVID-19.
Meanwhile on neighboring Curaçao, pro-independence parties are boycotting the inauguration of a pro-government lawmaker, bringing politics on the island to a standstill.
The two islands, and Sint Maarten, are autonomous countries within the Kingdom of the Netherlands and have yet to approve Dutch terms for financial support to cope with the effects of coronavirus. Read more “Contrast in the Dutch Caribbean”
The prime ministers of Aruba, Curaçao and Sint Maarten have turned down conditions to qualify for as much as €1 billion in coronavirus aid from the European Netherlands. A cabinet meeting in The Hague on Friday, which the leaders of the three islands attended, failed to produce a compromise.
The Dutch have proposed appointing a three-person panel to oversee reforms to which the aid is tied. The Caribbean islands consider this an infringement of their autonomy.
Eugene Rhuggenaath, the prime minister of Curaçao, went so far as to accuse The Hague of having “an agenda for the takeover and control” of the islands, echoing the rhetoric of pro-independence parties that supported violent protests against spending cuts two weeks ago, which prompted the Dutch to deploy troops to support the local police. Read more “Dutch Caribbean Resist Terms of Coronavirus Aid”
Politicians in the Dutch Caribbean have reluctantly agreed to spending reductions and reforms to qualify for €370 million in financial support from the European Netherlands:
25-percent cut in the salaries of politicians.
12.5-percent cut in the salaries of other public-sector workers.
Capping public-sector wages at 130 percent of the prime minister’s salary. (Such an income limit already exists in the European Netherlands.)
20-percent contribution from firms to wage subsidies for the unemployed.
Oversight from the Dutch Central Bank in the financial industry of the islands.
With their tourism-dependent economies in free fall due to the outbreak of coronavirus disease, the leaders of Aruba, Curaçao and Sint Maarten felt they had no choice but to agree to what Prime Minister Eugene Rhuggenaath of Curaçao called “unrealistic demands” and John Leerdam, a former Labor Party politician, who was born on Curaçao, called a “diktat” from The Hague.
But the terms (which do not apply to emergency food and health-care aid) still fall short of the more thorough and long-term reforms Dutch governments, of the left and right, have advised for years, in some cases decades:
Changes in the tax law, so the wealthy pay a bigger share.