“Na e momentonan akí, solidaridat ta mas importante ku nunka” E IMPAKTO DI COVID-19 TA UN DESAFIO GRANDI PA KÒRSOU I SINT MAARTEN / “Solidarity is now more important than ever” THE IMPACT OF THE COVID-19 PANDEMIC PRESENTS MAJOR CHALLENGES TO CURAÇAO AND SINT MAARTEN

March 20, 2020 REDAKSHON

“Na e momentonan akí, solidaridat ta mas importante ku nunka”
E IMPAKTO DI COVID-19 TA UN DESAFIO GRANDI
PA KÒRSOU I SINT MAARTEN

WILLEMSTAD/PHILIPSBURG – Centrale Bank van Curaçao en Sint Maarten (CBCS) ta
hasiendo un análisis di e impakto ekonómiko i finansiero di e pandemia di COVID-19, esaki
entre otro riba petishon di e gobièrnunan di Kòrsou i Sint Maarten. E análisis en kuestion ta
unu sumamente kompleho i p’esei mes, te asina leu, ta komentario global so por hasi
enkuanto su resultadonan. Ta pa e motibu ei mes tambe e institushonnan internashonal mas
grandi i prominente tampoko no a publiká nan pronóstikonan finansiero ainda.
Perspektiva ekonómiko di e union monetario tabata pinta skur kaba for di promé ku e
pandemia akí a kuminsá. Tabata antisipá un kontrakshon adishonal di ekonomia di Kòrsou
(ku aproksimadamente -2,5%) debí na e ahustenan struktural (medida pa drecha finansa
públiko, i un bahada adishonal den aktividat di refinashon na Kòrsou) komo resultado di e
desaroyonan na Venezuela. Pa ekonomia di Sint Maarten a premirá un kresementu ménos
rápido (di 5,0% pa 2,9%), debí prinsipalmente na ménos kresementu den turismo krusero.
Awor, e perspektiva a deteriorá. E desishon inevitabel di sera frontera pa protehá e
poblashonnan lokal kontra COVID-19 lo rekerí hopi sakrifisio. Turismo, ku ta e sektor di
eksportashon prinsipal di e union monetario, a básikamente para. Barku krusero no ta mara
mas na e islanan i, pa falta di konekshon aéreo ku mundu eksterior, turismo di estadia a
disparsé. Komo resultado, ekonomia di tantu Kòrsou komo Sint Maarten lo kontraé.
“Mirando ku ekonomia di e union monetario ya kaba ta delikado debí na Orkan Irma i e
situashon na Venezuela, sektor empresarial lo no ta kapas pa apsorbé e gòlpi akí sin risibí
yudansa,” segun Presidente Interino di CBCS, Dr. José Jardim.
Esaki ta debí direktamente na tamaño i struktura ekonómiko di Kòrsou i Sint Maarten. Ta
trata aki di dos ekonomia chikitu, basá riba servisio i ku ta dependé grandemente di eksterior.
Pa duna un idea: Eksportashon di produkto i servisio ta representá aproksimadamente
70 porshento di Produkto Interno Bruto (PIB) kombiná di e dos ekonomianan di e union
monetario, i importashon ta representá aproksimadamente 90 porshento. P’esei, ekonomia di
e union monetario ta èkstra vulnerabel pa gòlpi for di eksterior.
Presis kuantu ekonomia lo kontraé ta dependé di kon largu e situashon aktual lo dura. No tin
manera di bisa for di awor kon lihé e situashon por bolbe na normalidat, pero e echo ku ainda
e kantidat di infekshon na Europa ta oumentá eksponensialmente ta indiká ku e situashon lo
tin ku sigui empeorá un ratu mas promé ku por kuminsá mira un mehoransa. Lo dura a lo
ménos algun luna promé ku e situashon kuminsá normalisá.
Algu ku tambe ta mustra riba gravedat di e situashon ta e echo ku den apénas un par di dia,
Reserva Federal di Estádos Unídos a baha su tasa di interes na dos okashon, ta na e nivel di
mas abou posibel sin yega sero, di manera ku awor e tasa akí ta bèk na su nivel di mas abou
den historia. E úniko otro bes den pasado ku el a yega asina abou ta durante e krísis finansiero
di 2008-2009. Diferente gobièrnu, tantu di Europa komo di Estádos Unídos, ta konsiderando
e posibilidat di implementá pakete di estímulo fiskal na balor di hopi míles di mion i asta kisas
di vários bion dòler pa asina evitá imploshon di ekonomia.
Segun CBCS: “Kòrsou i Sint Maarten no tin e instrumentonan ni e rekursonan pa por suavisá
impakto di un krísis manera esaki.” E gobièrnunan no tin espasio presupuestario pa apsorb’é.
Ademas, di akuerdo ku Lei di Reino pa Supervishon Finansiero, Kòrsou i Sint Maarten no
por hasi fiansa pa atendé ku e situashon. Jardim a enfatisá ku: “Kòrsou i Sint Maarten tin un
tarea difísil nan dilanti. Ta presisamente den tempu manera esaki, e paisnan den Reino lo
mester t’ei pa duna otro apoyo i asistensia. Na e momentonan akí, solidaridat ta mas
importante ku nunka.” Loke ta úniko tokante e situashon akí ta ku tur parti di Reino ta
enfrentando e mesun desafionan kolosal i na e mesun momento.
En bista di e défisitnan grandi ku lo akumulá inevitablemente riba kuenta koriente di
gobièrnu, CBCS no ta mira otro opshon ku duna espasio pa e paisnan desviá for di e
normanan finansiero fihá den Lei di Reino pa Supervishon Finansiero di Kòrsou i Sint
Maarten. Ademas, CBCS ta di opinion ku ta sumamente importante pa implementá un pakete
di apoyo (den forma di un liña di krédito di emergensia) pa yuda gobièrnu di Kòrsou i esun di
Sint Maarten kubri nan défisitnan riba presupuesto, i pa duna asistensia finansiero na sektor
privá di e dos paisnan ku e meta di evitá despido masal. “E úniko manera pa suavisá e gòlpi
ku komunidat lo sufri ta si sigui paga salario apesar ku benta a kai”, asina Presidente Interino
Dr. Jardim a deklará.
E desafionan ku tin nos dilanti sin duda lo pone hopi preshon riba gobièrnu di tur dos pais.
P’esei mes, CBCS lo hasi tur su esfuerso pa asistí e gobièrnunan di Kòrsou i Sint Maarten. Por
último tin ku bisa ku CBCS ta den deliberashon estrecho ku e representantenan di gremio
bankario pa formulá sierto ahuste ku lo yuda e bankonan kumpli ku nesesidat di nan
klientenan i, di otro banda, permití e bankonan mes tambe ta den un mihó posishon pa
apsorbé gòlpi, tantu esunnan ku por premirá komo esunnan ku no por premirá.

Willemstad, 19 di mart di 2020
CENTRALE BANK VAN CURACAO EN SINT MAARTEN

“Solidarity is now more important than ever”
THE IMPACT OF THE COVID-19 PANDEMIC PRESENTS MAJOR
CHALLENGES TO CURAÇAO AND SINT MAARTEN

WILLEMSTAD/PHILIPSBURG – The Centrale Bank van Curaçao en Sint Maarten (CBCS) is
preparing an economic and financial impact analysis on the COVID-19 pandemic, partly at
the request of the governments of Curaçao and Sint Maarten. The analysis involved is highly
complex and any comments on its results can only be presented in quite general terms at this
stage. That explains why the economic forecasts of larger and more prominent international
institutions are also still pending publication.
The monetary union’s economic outlook was bleak even before the start of this pandemic,
showing a further contraction of Curaçao’s economy (by approximately -2.5%) due to the
structural adjustments as a result of developments in Venezuela (measures to improve public
finances and a further decline in refining activities in Curaçao) and a slowdown in
Sint Maarten’s economic growth (from 5.0% to 2.9%) mainly due to weaker growth in cruise
tourism.
This outlook has now deteriorated. The inevitable decision to close borders to protect the
local populations against COVID-19 will be at great cost. Tourism, the monetary union’s
main export sector, is basically coming to a standstill—Cruise ships no longer call at the
islands and, in the absence of air connections with the outside world, stay-over tourism has
ceased. This will result in economic contractions on both Curaçao and Sint Maarten. “Given
the already fragile state of the monetary union’s economy as a result of Hurricane Irma and
the situation in Venezuela, businesses will not be able to absorb this blow on their own,”
according to CBCS Interim President Dr. José Jardim.
This is a direct result of Curaçao and St. Maarten’s size and economic structure. Both are
small service-based economies that are heavily dependent on foreign countries. By way of
illustration: Exports of goods and services account for around 70 percent of the combined
Gross Domestic Product (GDP) of the monetary union’s two economies and imports
account for around 90 percent. This makes the monetary union’s economy particularly
vulnerable to external shocks.
The exact extent of the contraction will depend on how long the current situation will
continue. It is impossible to predict how quickly the situation may return to normal, but the
current exponential increase in the number of infections in Europe is an indication that the
peak has not yet been reached. It will take at least a few months before some level of
normalcy returns.
The seriousness of the situation is also reflected in the fact that the US Federal Reserve cut its
interest rate down twice in just a few days, to the level just marginally above zero, bringing it
back to the all-time low of the 2008-2009 financial crisis. In both Europe and the US, several
governments are considering fiscal stimulus packages ranging into the hundreds of billions
and even trillions of dollars in order to prevent the economy from imploding.
According to the CBCS: “Curaçao and Sint Maarten do not have the tools and resources to
mitigate such a crisis.” The governments do not have the budgetary scope to absorb it.
Moreover, under the Kingdom Law on Financial Supervision, Curaçao and Sint Maarten are
not allowed to borrow in order to deal with the situation. Jardim is adamant: “Curaçao and
Sint Maarten are facing a difficult task. It is precisely in times like these that the countries
within the Kingdom of the Netherlands should provide each other with support and
assistance. Solidarity is now more important than ever.” What sets this situation apart is that
all parts of the Kingdom are facing these same profound challenges at the same time.
In view of the large current-account deficits that will inevitably accumulate, the CBCS sees no
other option than to make allowance for the countries to deviate from the financial standards
laid down in the Kingdom Law on Financial Supervision of Curaçao and Sint Maarten. The
CBCS also considers it extremely important that an aid package (in the form of an emergency
credit line) be implemented for the governments of Curaçao and Sint Maarten and the
countries’ respective private sectors, to cover public deficits and provide financial support to
the private sector; the latter with the aim of preventing mass redundancies. “The harm to be
suffered by society can only be alleviated if salaries continue to be paid despite the loss of
sales,” said Interim President Dr. Jardim.
The challenges of the coming period will undoubtedly put enormous pressure on the
governments of both countries. The CBCS will therefore make every effort to be of
assistance to the governments of Curaçao and Sint Maarten. Finally, the CBCS is currently in
close consultation with the representative organizations of the banking sector to arrive at
adjustments that will help banks to meet their customers’ needs and on the other hand be
better able to absorb any (un)foreseeable shocks themselves.