What would you do with EXTRA Awg 30, or even Awg 40 million, each year?

If you were the decision-maker on the island where would you funnel the money you saved, that would benefit the community most?

I say Respaldo.

We recently heard a sad story in which a mom knew that her son would implode, yet Respaldo had no resources to give her.

Or maybe Education

We know they have no school book on order in the system, and that photocopy machines are working overtime, just before the opening of the new school year.

How about SABA

That amount of money could really make a HUGE difference in the life of our elderly.

We’re talking millions, each year. That could be invested in health care, education or elderly care.

Where would the money come from?

ATIA, the Aruba Trade and Industry Association informed us today that 1% saving on interest, equals Awg 9 million.

Percentage of what?

Of what we are about to pay to refinance the Corona-aid loans, due in October.

We borrowed almost a billion — Awg 915.5 million, to be exact, from the Netherlands.

(In addition to all other outstanding loans, which we pay steep interest for, without even touching the principal. There was just a GOA bond issue at 6%. Aruba again raised money from local lenders, luring them to invest with a generous rate.)

The Awg 915.5 million borrowed from the Dutch as ‘liquidity support’ during the pandemic when little or no money came in, was a Bullet Loan. Payment of the entire principal of the loan, and sometimes the principal and interest, is due at the end of the loan term.

Prime Minister Evelyn Wever Croes is campaigning against signing what she already signed for twice. Her campaign rejects the Dutch refinancing at 3.2% to 3.5% because of some financial supervision attached.

(3.2 to 3.5% according to government sources, my economist friends say 2 to 3%)

She would rather pay 6% to 8% to a foreigner lender, so that her legacy will not be tarnished, as the woman who handed over the key, while in fact we proved we are incapable of self-government, and handed most keys over, a long time ago.

Many of Aruba’s IOUs are held by the Dutch government and they have been merciful, charging between 0% to 2% interest, perhaps more now, unlike foreign entities that charge double, perhaps triple.

Besides, my friends think that GOA doesn’t reports accurately, and that is why it has been difficult to audit, with information habitually missing. Our accounting has also been flawed since 1986, and according to the land plan, the Landspakket, we do not have sufficient qualified people to handle our book keeping and the major fiscal issues we have.

In any case, the decision must be made soon, we have a hard deadline, at the end of the month.

And the difference is Awg 30 to 40 million a year, in interest alone, conservatively speaking

One of my economist friends confirms: Aruba currently has a BB+ rating, Netherlands AAA. The difference in the yield of (say) 10 year bonds could be about 3%. This implies an extra cost of 30 million per year on a total debt of 1 billion.

According to ATIA, the DIFFERENCE in numbers runs between Awg 27 million in interest annually to Awg 90 million, that’s Awg 90.000.000, depending on where we get the money from.

What would YOU do with the money saved?

Our government CHOOSES to pay more interest instead of less. Why? Why is the Dutch option so ‘bad,’ that it is worth penalizing the public for.

Why burden us further, in the name of false pride and misguided sentiment?

 

 

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July 28, 2023
Rona Coster