Very mixed feelings prevail this week in Curaçao and Sint Maarten. On the one hand, there is great relief that the Dutch government is reaching out to 30,000 affected pensioners and policyholders of the Ennia pension fund. Due to years of malpractice under owner and businessman Hushang Ansary, the pension fund was emptied. The money is still missing and Ennia is struggling with major shortages. Policyholders are in danger of having to give up 80 percent of their pension. On the other hand, the consequences of the loan are feared.
“The feeling is bittersweet“, says Giselle Mc William, leader of the social democratic opposition party Movementu Alsa Nashon (MAN). “The policyholders are grateful and relieved. The loss of pensions would have had a huge impact. But at the same time people think: another loan from the Netherlands, under strict conditions. What are the consequences of this?”
The announcement by outgoing State Secretary for Kingdom Relations Alexandra van Huffelen (D66) in a letter at the end of August to lend an additional 600 million euros to the islands has a political component that is sensitive here. And that is: more supervision from The Hague on the financial housekeeping in Curaçao, Sint Maarten and Aruba. Since October 10, 2010, the three Caribbean islands have acquired a more autonomous position as separate countries within the kingdom.
Nevertheless, they need The Hague to close the gap with Ennia, the largest pension fund and insurer in the Dutch Caribbean. They themselves cannot borrow such a huge amount at affordable interest rates on the capital market. The outgoing cabinet uses this dependence as leverage to increase political control. The Hague wants more thorough financial supervision and also wants the islands to curtail their expenditure. If they cooperate, they pay 3.1 percent interest on the loan. If they do not cooperate, they will pay 8 percent interest, which would amount to an amount of 48 million euros.
‘Government debt too high’
But there are also other factors at play. The loan of 600 million means that the islands will have to go deeper into debt in the coming years. And that is causing objections, it was reported The Financial Times Thursday, from the Financial Supervision Board of Curaçao and Sint Maarten (Cft). This board, which includes former minister of finance Hans Hoogervorst (VVD), can independently issue advice to the island administrators on financial management.
According to the Cft, the 600 million loan ‘will result in a significant increase in the government debt and debt ratio (the government debt as a percentage of GDP, ed.) for Curaçao’, which is contrary to the Financial Supervision Act. The islands’ public finances are not in great shape, according to the Cft, because they already had to borrow 1.17 billion euros from the Netherlands during the corona pandemic.
At the end of August, State Secretary Van Huffelen offered Curaçao, Sint Maarten and Aruba to repay these loans, which would have to be repaid from October, at a later stage, so that the island governments could continue to pay for the facilities for their residents. But this also comes with requirements: the islands must draw up a Multiannual Economic Framework that provides insight into investments and reforms. The Netherlands also wants an independent calculation of the refinancing, in order to determine the debt burden per country.
Quincy Girigorie, leader of the opposition party Partido Alternativa Real (PAR) and former Minister of Justice, is afraid that the loan will put too much of a strain on the islands’ economy. “We have many challenges here. In Curaçao, 43 percent of people live below the poverty line. We need investments in healthcare and education. The growing debt burden makes things look bleaker.” It is important to him that the loan conditions enable healthy socio-economic development of the islands.
Politician and businessman from Iran
For The Hague, the priority is more supervision of the islands. That is exactly what was missing when Hushang Ansary started to strip Ennia financially from 2006 onwards. The 97-year-old businessman served as Minister of Economic Affairs under the Shah of Iran in the 1960s. He was also ambassador to the US. After Khomeini took over power, the entrepreneur left for the United States with a well-filled wallet, where he acquired a passport and maintained friendships with leading Republicans such as Henry Kissinger and James Baker, and did a lot of business.
When Ennia came into his hands, Ansary promised to strengthen the capital position of the pension fund. He did the opposite: for years, Ansary transferred reserves from Ennia to his own companies. Ennia invested in shares of his companies and subsequently lost heavily. A purchase of a hotel on Sint Maarten, Mullet Bay, was also booked by Ennia for more than 400 million euros, while the market value was just over a tenth of that. All in all, Ennia lost almost three quarters of its assets to Ansary, approximately 570 million euros.
Despite various reports from whistleblowers and highly critical reports from DNB, it took until 2018 before the Centrale Bank of Curaçao and Sint Maarten (CBCS) placed Ennia under guardianship and a civil case was filed against Ansary and his accomplices, including his daughter and three Ennia directors. In 2021, the court in Curaçao stated that Ansary had to repay 500 million euros. To date he has not returned anything. The verdict in the appeal filed by Ansary will be announced next Thursday.
The Minister of Finance in Curacao, Javier Silvania, recently called Ansary a “thief” on the radio. “That was an embarrassing display,” says Giselle Mc William of MAN, “because his ministry has not yet filed a report for further criminal prosecution of Ansary. And this minister himself had a conversation with Ansary last year. How is that exactly? This is a slap in the face to the affected policyholders.”
Financial dependence
Criminal charges or not, the first question is whether Ansary will pay back the money he siphoned off – and when. As long as that is not the case, the islands will remain in a difficult position of financial dependence with regard to Ennia’s pension fund. In the coming weeks, the island authorities must decide under what conditions they will accept the loan. “The government of Curaçao is not open about which option they will choose, but we expect that there will be a deal with the Netherlands by the end of September,” says Quincy Girigorie (PAR). “What is at stake is the socio-economic position of the islands in the short and medium term. That we remain able to fend for ourselves. As far as we are concerned, it should not be about financial supervision from the Netherlands, but we should look at broader cooperation. But the government here does not seem open to that at the moment.”
Next Wednesday, the Senate and House of Representatives will meet about the loan to the Caribbean Netherlands. The State Secretary has urged MPs to decide on this urgently. There is currently no long-term certainty for the affected Ennia policyholders in the Caribbean Netherlands.
A version of this article also appeared in the September 9, 2023 newspaper.