ABA, AGDA and MinFic

ABA vs AGDA

For historians’ sake, this is how it went. Years ago, the banks told their gas station clients, if you give me your business, I will take care of your third-party network charges, that were negligable then.

In the case of the network, the bank is a go-between, an agent, connecting the service-provider with the customer. At the time the agreement was inked, the charges were minimal.

They are still very small today, 0.0075%

I wish the bank would charge me, as little as that, for all my transactions.

AGDA was told a few months ago, that the fee structure is antiquated and must change, it has not been updated in decades, and the bankers can no longer support the stations.

Nothing happened until last week when AGDA decided to go rogue, and wash dirty laundry in public. In the heat of the moment it also decided not to accept plastic anymore.

It is obvious that they need to work together, for the good of the public, with the aim at sustaining a cashless society.

AGDA’s complain that GOA capped gas prices, and only allows them a small margin, is not credible. Both gas stations and banks are money making machines, and I have no empathy for them, they have to get along, no one gets a free ride.

And remember that handling cash is super expensive between security, transport and storage.

ABA asked the Minister of Economic Affairs to intervene. He did, and got us three more months, a reprieve,  meanwhile the players have to come up with a solution.

AND…. this tempest in a tea cup has nothing to do with gas prices rising, the global gas and oil market is facing monumental difficulties, and we must pay.

GOA’s fixed expenses.

Following MinFic’s press conference on July 11, 2022, we were presented with GOA’s fixed expenses, payroll, rent, services, as if etched in stone, beyond GOA’s control.

Nothing can be done about the payroll, and very little can be done about all other expenses.

She showed graphs and proved to us, nothing can be done, besides total destruction, her hands are tied.

A fixed expense if fixed, that’s why we call it fixed.

The knowledge that if we don’t get it right, we lose it all, hasn’t sunk in.

To us, it is clear, that a deficit of 236 million florin is NOT manageable, in the way that MinFic thinks. As long as a country-budget shows a deficit, it means that the government is losing money and spends more than it makes. In 2022, the government paid 19.6 million florin a month in debt, which leaves nothing for healthcare, education and/or infrastructure, and leads to a failing economy, a bankrupt country. That seems to be the course that we are on, if there is nothing we can do.

Quoting a recent Accion21 press release: After 2022, Aruba can no longer turn to the Netherlands to refinance the 4-billon florin of debt maturing between now and 2026. In another year, Aruba will have to rely on the international money market, and borrow more money to pay for its existing debt thereby creating NEW DEBT. Our financial position has deteriorated significantly since the pandemic and we now owe more money than our economy can make, as debt surpasses 100% of GDP. No country can be successful by consistently creating bigger debts. More worrisome is the fact that the government does not even show signs of cutting expenses, reorganizing efficiently, or diversifying the economy. Cabinet Wever-Croes has no idea how to ​produce a surplus, we are on the road that practically guarantees us bankruptcy.

But, I guess there is nothing we can do.

And, if we do nothing the doomsday picture she painted, will present itself.

 

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July 13, 2022
Rona Coster