The Board financial supervision (Cft) notes considerable risks to Sint Maarten’s public finances within several state-owned companies. In addition, the social security and health insurance administration organization (SZV) is in trouble. If no measures are taken, the reserves will be depleted, which will bring major consequences for public finances. Alongside the delayed 2026 budget, Sint Maarten is currently working on a timely budget for 2027. It is crucial for this budget to adequately address the risks facing the country.
Sint Maarten does not yet have an active shareholding policy, which has led to problems within government entities. Among others, the telecommunications company TELEM, the electricity and water provider GEBE, and the postal company PSS are facing limited financial options and are under severe pressure. It is important to implement solutions and address governance issues. A fully functioning Board of Supervisory Directors and Board of Directors is a prerequisite for implementing changes effectively.
At the same time, the Government of Sint Maarten must address the acute risks to public finances within these entities through a clear strategy. This means that agreements must be made with the entities in crisis regarding financial sustainability or market-based solutions. Looking ahead, the Cft advises implementing an effective shareholding policy as soon as possible and executing it with the required capacity and expertise to ensure these problems do not recur.
Focus on a Timely Budget
In addition to the aforementioned matter, Sint Maarten has been facing substantial delays in the budgetary process for many years. This year, the budget is once again too late. The 2026 budget will not be adopted until mid-year at the earliest, which frustrates policy-making capabilities and the ability to address risks. In practice, plans and investments are repeatedly postponed.
The Kingdom Council of Ministers requested Sint Maarten to draft an improvement plan for the budgetary process. The Government has addressed this request diligently. Sint Maarten started preparing the 2027 budget on time and shared an extensive timeline with the Cft. Furthermore, the Government reached an agreement on expenditure frameworks at an early stage. At the same time, the Cft notes that there are currently bottlenecks in the process because not all Ministries are submitting information on time. The Cft urges the Council of Ministers in its entirety to assume its responsibility. Only if all parties involved make their contribution can the 2027 budget be established before the start of the new fiscal year, in line with the set goal.
Affordability of Healthcare and Pensions at Stake
One of the acute risks for the coming years that must be addressed in the 2027 budget is the deficit within the healthcare funds. Annually, the healthcare funds managed by the Social and Health Insurances (SZV) incur losses of approximately ANG 35 million. Until now, these deficits – which have since risen to approximately ANG 500 million – were absorbed through the reserves of the remaining funds, primarily the AOV pension fund. Within a few years, these reserves will be depleted, putting the affordability of healthcare and pensions for the citizens of Sint Maarten under intense pressure.
The Cft has pointed out the seriousness of this situation several times. No more time can be lost. The measures identified by Sint Maarten must be implemented. According to Sint Maarten, the implementation of a General Health Insurance (GHI) will lead to a reduction in annual deficits. It is essential to introduce the corresponding legislation starting from the most current target date, January 1, 2027.
In addition to the GHI, other measures must be implemented that will lead to revenues and/or expenditure reductions. For example, Sint Maarten aims to introduce a tourist tax starting January 1, 2027, and is working on reforms of the tax system and the tax authority to improve tax collection and compliance. This creates possibilities for the country to both absorb the deficits in social security and make other prioritized expenditures. In its current state, the country’s liquidity is too limited and the risks are too great, also considering the current geopolitical situation. Now is the time to act.