Medium Term Budgeting Building Fiscal Discipline and Capacity
From Crisis to Planning: A Shift in Focus
Sint Maarten has made progress introducing medium-term forecasts in its recent budgets. This shift marks a step away from short-term, reactive budgeting toward a more strategic and forward-looking approach. Forecasts help identify future fiscal pressures, align spending with goals, and manage investment needs.
Medium Term Budgeting Building Fiscal Discipline and Capacity
Still, challenges persist. The 2025 budget is already delayed, just like in 2024. These delays disrupt execution, limit transparency, and undermine confidence. For long-term stability, the island must now turn reforms into routine practice.
Strengthening Public Financial Management
Planning isn’t enough—execution matters most. To improve implementation, the government should:
Medium Term Budgeting Building Fiscal Discipline and Capacity
- Develop a medium-term expenditure framework.
- Regularly publish statements of contingent liabilities.
- Make public wage structures more flexible to attract talent.
- Improve coordination across ministries for better budgeting and delivery.
Limited capacity in line ministries is a major constraint. Projects stall due to bottlenecks in procurement, planning, and staffing. This undercuts growth and weakens returns on public spending.
Leverage the Trust Fund’s Expertise
The Trust Fund, managed with the World Bank since Hurricane Irma, will close in 2028. Before it ends, Sint Maarten should institutionalize its best practices. A centralized public investment planning unit could:
- Maintain a live pipeline of projects.
- Monitor and coordinate implementation.
- Outsource selected tasks to the private sector, when appropriate.
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This would ensure continuity and reduce the island’s dependence on external partners for core government functions.
Conclusion
Budgeting for the future requires more than numbers—it demands discipline, skill, and structure. Sint Maarten has the opportunity to build lasting public financial management capacity. With the right systems in place, it can make every guilder count.
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