News item | 21-10-2022 | 13:45
On the proposal of State Secretary Van Huffelen of Kingdom Relations, the Kingdom Council of Ministers has decided not to give Aruba an indication for 2022. Unexpected windfalls ensure that the deficit amounts to 112.7 million Aruban Florin (AWG), or 53 million euros. This means that it remains below the agreed AWG 131 million and a designation is not necessary this year.
Aruba’s windfalls emerged after the advice of the Aruba Financial Supervision Board (CAft). The CAft advised the Kingdom Council of Ministers on July 13 to give the country an instruction because the government of Aruba did not have the budget in order. The CAft also saw no steps towards balancing expenditure and income. According to the CAft, the country is also doing too little to get the housekeeping book right for the long term.
“It is great that the government of Aruba has had a number of windfalls at the last minute, so that the budget deficit for this year remains below the agreed limit,” said State Secretary Van Huffelen. “This has prevented an indication before 2022.”
But the concerns for the future of the country and the Arubans have certainly not left the State Secretary and the Dutch cabinet. “We see that Aruba continues to have huge debts, more than 90% of the Gross Domestic Product. That should be half less. Now almost 19% of the budget is spent on paying interest. You cannot spend that money on education, on health care or on poverty alleviation, all things that are so very important to the people there.”
It was previously agreed in the Kingdom Council of Ministers that the country will again adhere to regular budget rules next year. They state that Aruba must have a surplus of 1% of the Gross Domestic Product. In 2023, Aruba can no longer rely on emergency loans from the corona time, the so-called liquidity support. “In order to build a country and maintain confidence in the financial markets, it is important to have a budget that is right. With a debt of 5.8 billion AWG now, Aruba saddles future generations with a huge bill. That is why it is so very important that the budget meets the agreements and that there is money for all those things that Arubans want for their country,” said the State Secretary.
On behalf of the cabinet, the State Secretary sent a letter to the government of Aruba in response to the decision in the Kingdom Council of Ministers. It also mentions the replacement of existing liquidity loans for new loans, the so-called refinancing. That should happen next year. The letter states that a balanced budget, linked to a reliable implementation and adequate financial supervision by means of the Aruba Financial Supervision Act, is essential to be able to discuss this refinancing with each other.