Aruba finally signed an agreement with the Netherlands, about financial supervision. The agreement spelled out the term of repaying borrowed money, better known as the pandemic loans, and the possible refinancing of all of Aruba’s national debt, between 6, some say 7 billion florins.
By the time our MinPres scribbled her John Hancock on the document, it felt anti-climactic.
We have been waiting for it so long, we were mad it didn’t happen earlier, and when it materialized, it made only few muted headlines.
Parliamentarian Miguel Mansur recently wrote that it cost us, the citizens of Aruba, 100 million florins, over the past years. Aruba was charged a much higher interest on loans, because of its refusal to accept tighter financial supervision.
Just one MEP party dinosaur condemned what he called a sellout of the original Aruban vision, the dream for independence – that never was.
In March 2020, when the wheels of our economy came to a complete standstill, the Netherlands offered liquidity support, long term loans to help its poor, struggling Caribbean nations over the hump.
The details were to be worked out until October 2022, when the loans matured.
The Dutch then came up with something they called Landspakket, reforms designed to tackle and improve our Financial Management, and measures to control the costs and effectiveness of our Public Sector. They tried to make sense of our complicated Tax System and recommended changes and adjustments in the Financial, Economic, Health Care and Education Sectors. They aspired to strengthen the rule of law, across the board, by supervising us closely.
But in the eyes of the local politicians, on all Dutch Caribbean islands, they were being coerced to reform by a colonial mentality, the Dutch were forcefully and unlawfully pressuring them to compromise their so-called cherished autonomy. They dug in their heels and opposed the suggested Kingdom laws, written to put the respective Landspakketen, the required reforms, into action.
“We took out the loans with our backs against the wall, they cried, with the pandemic looming over the heads and our country treasuries empty.”
Fortunately for them, post-pandemic, the island economies recovered, and they felt there was absolutely no reason to amend their wasteful ways.
The Dutch were unmoved, they encouraged the islands to sign their financial supervision agreements, by charging them regular interest rates, VS much lower ones, once documents are signed.
And we have been waiting, paying higher interest rates, for more than a decade.
Aruba was asked to sign a Kingdom law, Raft, which cannot be tweaked by the local parliament. GOA offered a LAft, a local law. The negotiating parties locked horns and arrived at a stalemate.
But then the first cracks appeared, and compromise was in the air.
And that is how this week, Aruba signed a hybrid Kingdom law for financial supervision, a RAft that acts like LAft, or vice versa, details to be worked out soon.
The agreement allows Aruba to get lower interest rates on its debt and loans. The Covid loans interest rate will go from 6.9% to 5.1%, saving the country millions. This will go further down to 3.4% as soon as all details are completed. And some of Aruba’s debt, estimated at 6 – 7 billion florins, may be refinanced by the Dutch at 4%. Saving fortunes, which could then be invested in education, and/or heath care.
Once all tees are crossed, our financial supervision will hopefully keep us on track, achieving a budget surplus, paying off debts.
The deadline for the Kingdom law to reach Aruba Parliament is May 1, 2025. Let’s see if we can meet that. The agreement also includes provisions on how to resolve conflicts relating to our financial supervision and a window of opportunity for more investments.
