The Kingdom Council of Ministers, RMR, met yesterday, Friday is their D day, D as in deliberation, and the suspense was quite palpable here.
Our financial supervisors, CAft, recommended giving the island specific instructions, not just any instructions, but Royal instructions, the most powerful decree in the land, and we were wondering, will the Council of Ministers follow the advice of last resort, or pick another strategy.
They picked another strategy, though the threat still stands.
They nixed the proposal of restoring 5% of public sector employee salaries.
Though it was promised by MinPres and hinted at by the Secretary of State.
Salaries of public sector employees will not revert to pre-pandemic level because, GOA did not make any progress introducing sustainability into public finances, did not cut the budget, did not economize, and basically resisted all suggestions stubbornly, all along.
How can you give people more money when you are in debt up to your eyeballs?
From the tone of the July 14, 2022 letter, recommending sanctions, meaning royal instructions, you could sense CAft was losing patience, all this ping pong, back and forth with no results, was getting on the administrator’s nerves.
CAft has been engaged in this ping pong process with GOA for years, giving GOA many chances to explain and argue, multiple times. It has been sounding the alarm, and finally, Dutch patience ran out.
Salary cuts were introduced early in the pandemic. GOA said it was the Netherlands’ idea. Then in court the truth was revealed. GOA implemented salary cuts as a cost saving measure.
The Netherlands suggested cutting costs, and GOA instituted salary reductions.
That did not sit well in Labor Union circles and the promise to ‘negotiate’ pay restoration was made again and again and again.
We got, it, we almost got it, we’re going to get it, but at the end we didn’t get it.
This subject of 5% pay restoration was discussed day in and day out, as if it is the only theme of importance.
The ship was going down, and the captain was redecorating cabins.
CAft had outline 13 major area in need of improvement and the only issue of concern was giving government employees more money.
Instead of reducing the debt burden GOA was creating more debt.
Our deficit now is more than 7.5 billion, will get close to 8 billion at year’s end, in two more years we will be 10 billion in the hole, if nothing is done, causing more inflation, less tax income and a higher interest rate for refinancing.
The system is currently rigged to keep pueblo in the muck, while public employees are on high ground.
While this island once had a strong middle-class it is now poor, the actual income per capita has remained the same, but the burden of tax on individuals increased.
What will happen if Aruba has to declare itself bankrupt? Will rescue capital come in from the Netherlands without conditions?
What if IMF is asked to help? What will happen then?
Two things came to mind yesterday, the former Secretary of State, Raymond Knops, was direct and dry, he shared his viewpoints publicly. The current Secretary of State, Alexandra van Huffelen, is more passive-aggressive, playing nice on the island, staging feel-good events, tackling politically correct issues, but taking care of tough business upon her return to the Netherlands.
We were also thinking if things were different on Election Day, last year, and Mas/Raiz/Accion21, the three smaller parties would have struck an alliance, would/could things look differently for us today?
Aruba is in big trouble: Following CAft recommendations and implementing the Landspakket could save us, but it would take a lot of sacrifice, that no one wants to undertake.
