CABINET OF THE MINISTER OF FINANCE HON. M. FERRIER – OPENING PRESENTATION AT CC MEETING #24 OF PARLIAMENT – APRIL 26TH, 2018


CABINET OF THE MINISTER OF FINANCE HON. M. FERRIER – OPENING PRESENTATION AT CC MEETING #24 OF PARLIAMENT – APRIL 26TH, 2018

Madame President, Members of Parliament, good morning.

Thank you for the opportunity to address you in this setting and to elucidate budget 2018 in its latest format. But before I go to the budget I would like to set the stage, if I may, and if you permit me:
Those of us who are either born here, or born to be here for the past 60 years or more, have witnessed the growth of an island from a sleepy laid-back natures paradise, to a bustling mecca of businesses that served as a magnet to tourists as well as job-seekers from abroad, especially from right here in the Caribbean, looking for a better life. This 37-square mile island catapulted to the top of the tourism food chain through the vision of great politicians like Dr. Claude Wathey, Clem Labega, Lionel B. Scott, dr. Hubert Petit, Sam Hazel, Felix Choisy, Albert Fleming, Vance James and others, who laid the ground work for modern St. Maarten/Saint Martin.

Fast forward to September 2017, when after having endured many previous hurricanes like the Big one in 1950, Donna in 1960, Luis in 1995, Lenny in 1999, numerous other smaller ones in between, Hurricane Irma knocked us to the ground, leaving our Island, its people and our economy in shambles. In the USA, when a hurricane is threatening a state, the Governor of that state can, even before the hit, declare a state of emergency. That act triggers access to and mobilization of Federal emergency funds and manpower. These are Federal government funds sitting in a “calamity war chest”, contributed to, by taxpayers of the ENTIRE United States of America. In other words, no individual state as small as Vermont and up to as large as California needs to “go it alone” in case of calamities,

This 37-square mile island, as is the case with ALL of our Caribbean neighboring islands, is no match for a huge calamity like Hurricane Irma. WE do not have a FEMA to call for help. We do not have a “calamity war chest”. At best, what we have is some insurance, some savings and for the most, a resilient population with a drive to rise again from the ashes. In times like these, all we need is help to get us over the hump, out of the gutter, however you want to phrase it, to get back on our feet and be off to the races we have ran so well in the past once more, in spite of our size.

That is why when Holland generously made it known to the world that they are making 550 million euros available for the recovery and reconstruction for the Southern side of Sint Maarten, we were delighted, although taken aback that this recovery and reconstruction aid was offered subject to months old pre-Irma conditions. True St. Martiners are no beggars, and I dare say that eventually even without any help from outside, because of the previously mentioned resilient spirit of our people Sint Maarten / Saint Martin would get back on its feet. It would only take a lot longer because of our economy of scale.

I say again, we are grateful for the help and generosity we have received and are receiving from abroad.

All we need is to be able to shift our sluggish post-Irma economy into a higher gear in order to pick up speed again. For that we must firstly get our International SXM-airport, the MAIN portal to our economy, repaired and up & running on short notice. The present tents are simply not good enough, as with even the THREAT of any Category hurricane, will cause the closure of our airport for days and possibly weeks due to tear down and rebuild of the tents. Secondly, we need our major stayover guest hotels and resorts rebuilt and back online. Thirdly, we need as many of the small, medium and large businesses on the Island to be able to access low interest financing to see them through the remainder of 2018 and deep into 2019, all with the ultimate goal to create employment for our citizens and produce tax revenues for this and future governments.

The interim government headed by Prime Minister Leona Romeo-Marlin, under very, if not THE most challenging governing circumstances encountered in the history of our Island, has since January 15th last, given its ALL to accomplish as much as possible for our community. All this with one hand tied behind our collective backs, due to an aggravated cash flow shortage that will only get worse, before it gets better.

So, the budget I am about present to you is not a pretty picture. Do we believe it is an adequate budget? Absolutely not. Do we believe that this budget will meet the needs of our population? Absolutely not, especially since post-Irma we have drastically reduced income and at the same time extra ordinarily higher expenses.

This is why the promised 550 million euros sounded like music to our ears. But because of warranted, unwarranted and perceived lack of trust of the Dutch in the body Politics of Sint Maarten, they decided in their infinite wisdom to enlist the services of the World Bank (who work in accordance to set rules and norms we now have to live up to) by strategically placing it between us (SXM) as Recipient and them (Holland) as Donors, to manage the spending of THEIR taxpayers promised 550 million euros. After deduction of fees, a Nafl 50 million loan to Sint Maarten and other upfront expenditures, the 550 million euros have in the mean time already dwindled to 470 million euros or approximately 526 million US dollars. The good news is that ALL the money that is allocated to the TRUST FUND for the the recovery of St. Maarten, is a grant (or gift) to St. Maarten and NOT a loan.

Madam President, through you I need all to understand that it is estimated by the World Bank and corroborated by the IMF, that hurricane Irma has caused over 2 billion US dollars’ worth of physical damage and economic losses for our 16-square mile half of this Island.

So even when we eventually receive the very last Euro of this Trust Fund – which by the way is not going to be available in a lump sum, but in tranches over a 3,5 year period – we will still be short another 1.5 billion US dollars to complete the recovery – barring any further disasters.

I therefore ask for collaboration, rather than confrontation. I ask that all Members of this prestigious body put aside petty partisan politics and for this budget cycle and hopefully the next 3 following cycles during which the post hurricane Irma recovery efforts will be ongoing, we come together and truly make a difference for the people of this Island nation. As Parliament, as Government, as a people, as a community we have ALL been touched by the devastation. We now have a choice: raise the level, so all boats can float together, or look for easy to find sticks to beat this dog.

The budget deadline of May 1st, 2018 is one of the conditions set by the Kingdom Council of Ministers to prevent Sint Maarten from getting a Financial/Formal Instruction. Hence, my April 9th, 2018 memo to all concerned respectfully requesting an expedited handling of budget 2018, so we can move on and concentrate on the important and daunting task of repairing some, if not most of the yet untouched damaged roofs of our citizens 7 ½ months after that faithful day.

Permit me now to shed some light on this latest version of budget 2018:

<PowerPoint Presentation budget 2018>

Minister of Finance

Michael J. Ferrier                           St. Maarten, April 26th 2018

Advertisements