Sint Maarten’s Financial Tightrope: A Recipe for Disaster?

As Sint Maarten teeters on the brink of another hurricane season, the latest report from the Board of financial supervision (Cft) paints a grim picture of the island’s fiscal management. With echoes of the recent GEBE power crisis still reverberating through the community, one can’t help but wonder: Is Sint Maarten setting itself up for a perfect storm of financial and infrastructural collapse?

The Cft’s findings are nothing short of alarming. A budget surplus 8 million guilders lower than projected, tax revenues falling short by a staggering 26 million, and wild deviations in personnel costs and goods and services expenditures. It’s as if the government is playing a high-stakes game of financial roulette with the island’s future.

But perhaps most concerning is the government’s apparent nonchalance towards these discrepancies. The Cft notes a stark lack of explanation for these variations, rendering their report almost useless for any meaningful analysis. One might ask: Is this incompetence or a deliberate attempt to obscure the true state of affairs?

The parallels with the GEBE debacle are hard to ignore. Just as poor governance and lack of oversight led to a power crisis that left residents in the dark, the government’s financial mismanagement threatens to plunge the entire island into economic blackout. The recent power outages might seem like a minor inconvenience compared to the looming fiscal storm.

As if to add insult to injury, Sint Maarten has only invested a paltry 3 million guilders out of a 61 million capital loan received in late 2023. With hurricane season approaching, one can’t help but wonder: Will Sint Maarten have the resources and infrastructure to weather both a natural and financial storm?

The Cft’s recommendation for a budget revision and surpluses of at least 0.5% of GDP seems to fall on deaf ears. The government’s reluctance to adopt these recommendations is reminiscent of GEBE’s failure to heed warnings about generator maintenance and replacements. Are we witnessing history repeat itself, but on a national scale?

Perhaps most chilling is the prognosis of only 1 million guilders in liquid resources by the end of 2024. With GEBE’s instability and the ever-present threat of hurricanes, this isn’t just financial mismanagement – it’s playing Russian roulette with the island’s future.

The need for structural reforms in the tax system and cost control isn’t just advisable – it’s critical for survival (sorry Casino’s and all other tax exempts). Yet, like a captain steering a ship towards an iceberg, Sint Maarten’s leadership seems content to maintain course, promising vague plans for deficit compensation in future reports.

As Sint Maarten faces a cumulative deficit of 594 million guilders to be compensated, one can’t help but draw parallels to GEBE’s mounting maintenance backlog. Both scenarios stem from years of mismanagement, short-term thinking, and a lack of accountability.

Sint Maarten stands at a crossroads. The financial mismanagement exposed by the Cft report, coupled with the recent GEBE crisis and the looming threat of hurricane season, creates a perfect storm of vulnerability. Without immediate, drastic action to address these financial and governance issues, Sint Maarten risks not just metaphorical power outages, but a complete shutdown of its economic and social systems.

The question remains: Will Sint Maarten’s leadership rise to the challenge, or will they continue to fiddle while Rome burns – or in this case, while the generators fail and the coffers run dry?