Friday, May 29th

You are here: Home

Editorial - A word to the wise

It may seem like "the same old story," but a warning by the Committee for Financial Supervision CFT (see Thursday paper) against taking up too much debt should not go unheeded. After the Antillean debt relief by the Netherlands that accompanied the constitutional reforms per 10-10-10 Curaçao's debt again has reached 40 per cent of its gross domestic product (GDP), the norm internationally considered acceptable.

St. Maarten's debt is reported to be just slightly lower, but that is no reason for ignoring the call to keep it in check. Doing so requires not only prudence when taking on long-term financial commitments, bus also striving for productive capital investments in the sense that they either save government money or allow it to make more.

It is also in this light that leasing out part of what is popularly known as Emilio Wilson Estate (EWE) for the RainForest Adventures Park ought to be seen. Government purchased the historically and environmentally significant property to preserve it for future generations at the request of Parliament, but apparently realised it would have to generate some type of income to offset at least part of the purchase and interest costs.

In addition, the project actually should produce other revenues for the national treasury in various forms such as wage tax from its employees. Obviously not everyone is happy with the decision, but from a financial-household point of view it certainly makes sense.

In general, contracting loans should be considered only if they contribute to the local economy either directly or indirectly, so that also the public sector may benefit through increased earnings. It simply would not be smart to borrow money that ultimately will only add to expenses when there are already so many budgetary issues.

CFT's "a word to the wise" advice is clearly well-taken.