Cft Warns Caribbean Countries Hidden Debt Risks Still Loom Despite Visible Progress
https://sxmnews.ai/from-bid-rigging-to-land-stealing-story-of-christopher-emmanuels-crash-out/
The Board for Financial Supervision (Cft) has issued a stark warning to Aruba, Curaçao, and Sint Maarten: don’t let falling debt ratios mask dangerous structural weaknesses.
In a direct address to the Dutch Senate’s Kingdom Relations Committee, Cft Chair Lidewijde Ongering acknowledged notable fiscal improvements since the COVID-19 pandemic.
However, she stressed that key vulnerabilities persist—most urgently in Aruba.
Debt-to-GDP ratios have declined across the Dutch Caribbean. Aruba’s ratio dropped from a staggering 115% in 2020 to 71% in 2025.
Curaçao and Sint Maarten now hover around the International Monetary Fund’s benchmark of 50–55%. These gains stem largely from rebounding economies and stronger tax revenues. But the Cft insists this recovery tells only part of the story.
Aruba, in particular, faces mounting interest payments that consume nearly 16% of its annual budget. That’s three times the legal cap set for Curaçao and Sint Maarten.
Unlike its counterparts, Aruba borrows independently on the open market and faces higher rates. The absence of regulation under the Kingdom Act on Financial Supervision leaves the country exposed to spiraling debt service costs.
Another red flag is the widespread use of bullet loans. These loans require no interim payments and demand full repayment at maturity.
With large amounts maturing soon—such as Curaçao’s 140 million guilder loan due in October 2025—repayment could trigger serious fiscal strain. In response, the Cft urges a shift to linear loans, which offer steady, manageable repayment schedules.
To avoid sudden shocks, the board recommends that Curaçao repay 60 million of the maturing loan and refinance the remaining 80 million. Moreover, it calls for long-term strategies like building repayment buffers and enhancing debt oversight.
Despite positive headlines, the region’s reliance on tourism and external markets leaves it vulnerable. For that reason, the Cft emphasizes proactive, sustainable borrowing over short-term fixes. Visible improvements must not distract from deeper financial risks—especially when the next crisis may not offer a second chance.