Kingdom of the Netherlands—Curaçao and Sint Maarten: Staff Report for the 2016 Article IV Consultation Discussions—Informational Annex

The currency union of Curaçao and Sint Maarten has important strengths, including a high level of development, good infrastructure, and relatively low public debt. However, preserving these going forward will require surmounting some critical challenges. GDP per capita is already at high-income country levels, but the islands must combat lackluster growth and high unemployment levels by addressing weak competitiveness and improving the investment environment. The fiscal situation remains relatively stable, following the debt relief in 2010, but sustained efforts on fiscal and structural reforms are required to lock in gains and ensure continued fiscal and debt sustainability. The authorities' structural reform plans are welcomed, but continuity in policy will be essential going forward, particularly in the context of the upcoming elections in both countries, scheduled for September 2016.

Abstract

The currency union of Curaçao and Sint Maarten has important strengths, including a high level of development, good infrastructure, and relatively low public debt. However, preserving these going forward will require surmounting some critical challenges. GDP per capita is already at high-income country levels, but the islands must combat lackluster growth and high unemployment levels by addressing weak competitiveness and improving the investment environment. The fiscal situation remains relatively stable, following the debt relief in 2010, but sustained efforts on fiscal and structural reforms are required to lock in gains and ensure continued fiscal and debt sustainability. The authorities' structural reform plans are welcomed, but continuity in policy will be essential going forward, particularly in the context of the upcoming elections in both countries, scheduled for September 2016.

Fund Relations

(For the Kingdom of the Netherlands, as of June 30, 2016)

Membership Status: The Kingdom of the Netherlands is an original member of the Fund. On February 15, 1961, the Kingdom accepted the obligations of Article VIII, Sections 2, 3, and 4 of the Articles of Agreement for all territories.

General Resources Account:

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SDR Department:

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Outstanding Purchases and Loans: None

Latest Financial Arrangements: None

Projected Obligations to Fund (SDR million; based on existing use of resources and present holdings of SDRs):

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Exchange Rate Arrangements:

The Netherland Antilles guilder has been pegged to the US dollar at NAf. 1.79 per US$1 since 1971. The exchange regime is free of restrictions and multiple currency practices.

Article IV Consultation Discussions:

This is the third Article IV consultation discussion with Curaçao and Sint Maarten, following the dissolution of the Netherlands Antilles and the granting of autonomy to both countries on October 10, 2010. The board concluded the last Article IV consultation discussions for the Curaçao and Sint Maarten on July 30, 2014, on the basis of IMF Country Report No. 14/239. It is currently envisaged that the next Article IV consultation discussions with Curaçao and Sint Maarten will be held in 24 months.

Statistical Issues

I. Curaçao and Sint Maarten: Assessment of Data Adequacy for Surveillance

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Curaçao and Sint Maarten: Table of Common Indicators Required for Surveillance

(As of June 30, 2016)

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Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.

The general government consists of the central government and the social security funds. The composition of financing distinguishes foreign, domestic bank and domestic nonbank financing.

Including currency and maturity decompositions.

Includes external gross financial asset and liability positions vis-à-vis nonresidents.