ORANJESTAD – The Prime Minister recently informed the Parliament of Aruba that the Government would be seeking an AWG. 1.3 billion loan on the international market to cover the financial impact caused by the ongoing coronavirus crisis.
The Prime Minister also announced that the loan only would not be enough to cover all the costs and that the situation will require the sacrifice of the entire public sector. It is obvious that the private sector is already undergoing difficult times with thousands of jobs being terminated. Many companies will not be able to survive this crisis and will inevitably be forced to close. This means that the majority of businesses are already dealing with these challenges, and now is the time for the public sector to do its part. The Minister of Finances has presented a detailed plan of how the Government is attending with this crisis. This will be done in 3 phases:
- Phase one includes a calculation by entities like Central Bureau of Statistics, the Central Bank and the Department of Economic Affairs, assisted by the IMF and Standard and Poor’s, to assess the financial damage caused by the crisis including the loan of AWG. 1.3 billion.
- Phase 2 includes finding funds to cover and stabilize the funds of the AZV and SVb and to guarantee the Government has enough funds to continue its operations. This has been approved on March 24, 2020, by the Parliament. The Government can now seek funds on the international market. Once the Government finds the funds, it can proceed with the third phase.
- Phase 3 includes the reduction of the government’s costs. Drastic cuts are needed and the spending patterns have to change according to the new reality. The Government will be making the needed adjustments in the budget to match the current situation.
The Prime Minister emphasized that to continue as a government, drastic cuts will be inevitable for the Ministers, Members of Parliament and the public workers. Partial cuts in salaries and benefits are inevitable since the Government will not be able to cover all their costs. Those who wish to continue in the public sector will have to make the sacrifices needed, since that is the harsh reality due to this crisis. The cuts are not established yet since these still have to be calculated. The need, for now, is to find the needed funds to stabilize the AZV and SVb funds and to guarantee the Government’s operation so that they can assist those affected immediately in this crisis.
