Saba Island Council shares concerns about precarious financial situation

Saba’s Island Council responded very concerned to the announcement of Finance Commissioner Bruce Zagers during a Central Committee meeting on Tuesday, August 25, that the Public Entity Saba had closed off the 2019 fiscal year with a deficit of just over US $621,000. The Island Council was advised to have the deficit deducted from the general reserve.

The Island Council has been very vocal about the financial concerns and even walked out of an Island Council meeting in November last year during the handling of the 2020 budget to reemphasize that operating on skeletal budgets was no longer acceptable. The warnings of Commissioner Zagers that without sufficient structural funding to cover the operational cost of government, eventually there would be a financial shortfall, became a fact. The Island Council was informed of this fact during the presentation of the 2019 year report and the financial statements on Tuesday. On Thursday, August 27, the year report and the financial statements were handled in a public Island Council meeting.

Individual Island Council Members, all of the reigning WIPM party, responded critically. “Where is the outrage in The Hague that Saba, which has been a great financial steward and a model for political stability, today is now recording its first and very significant deficit? The warning bells that this day would come clearly have falled on deaf ears,” said Vito Charles.

Right track

Eviton Heyliger said that Saba has always been on the right track when it comes to handling its finances. “We have a good relationship with the Netherlands and this must be kept. We need to cooperate more closely to solve our financial predicament.” Heyliger noted that things were very hard at the moment. Saba was still recovering from the September 2017 hurricanes Irma and Maria when the coronavirus pandemic hit, which is resulting in more hardship. “Government is doing its best, but there is only so much one can do with whatever is there to work with. This includes our reserves. At this moment there is little that can done.”

Hemmie van Xanten reiterated that in November 2019, all members of the Island Council walked out of the 2020 budget meeting to protest the fact that the island is run mostly on incidental funding and that the structural funding in the form of a higher free allowance is lacking. “The 2019 year report is a confirmation of this.” He referred to the big increase in project subsidies. In 2015, there were 34 subsidies. In 2019 this had increased to 86 subsidies.

“Although these subsidies benefit certain projects and are in the interest of the island’s development, it must be stressed that running an island on a daily basis can no longer be funded by a free allowance that is clearly too low. It is about time that the federal government recognizes this, and honors the perfect financial reporting of the island for the last years with more financial freedom and less incidental solutions,” said Van Xanten.

Different situation

Esmeralda Johnson said she hoped that the worrisome message of Commissioner Zagers would not go over the heads of decision-makers and influencers in The Hague. She noted that the situation on Saba was very different compared to its sister islands where it came to financial management and that this fact had also been mentioned in the Netherlands.  “However, Saba continues to suffer and does not receive the support that it deserves.”
Johnson said it was “sad” to read again in the annual report that the Public Entity Saba navigates on a skeleton budget, which looks balanced on paper, but which is far from realistic. “We cannot continue like this. These challenges and the inability to cover all costs are messages that Saba has given to the Netherlands for several years. We walked out of a meeting last year, multiple letters have been sent and still it did not have an impact on the decisions made in The Hague. I wonder what is needed to get everyone’s attention.”

Carl Buncamper said that at some point, trust must be achieved and prevail in any relationship between governments, if these governments are to operate in harmony and with positive impacts on their communities. “It is my opinion that the reluctance to make funds structural and instead continue on an incidental basis is all about the loss of control where it comes to the execution of local tasks.”

Dimished control

According to Buncamper, increasing the free allowance mainly meant a diminished level of control by The Hague on Saba’s budget. “At the same time, we are aware of the many examples where things have gone wrong, not necessarily on Saba, but elsewhere in the Kingdom. Reluctance is understandable to an extent. Saba has done great with financial management, but are they ready to trust us on the norm-conforming results on The Hague’s agenda? That is the true dilemma.” Buncamper suggested to be more conservative in accepting incidental funding and entering into loans, because experience has proven that as top of the class, Saba actually got penalized in comparison to its sister islands which received grants for investments.

Vito Charles expressed concerns about the consequences of the precarious financial situation of government. “Most worrisome about this is that it impacts our ability to provide social services to our people who are living in or just at the edge of poverty at a time when they need it most. The time has come to give to Saba what is due to Saba. Let us solve this once and for all.”

Eviton Heyliger worried about the job opportunities for locals. “Word on the street is that government is a no-vacancy government. Persons who apply for a job in government receive a letter in response that there are no vacancies. This is sad cause people are hurting financially. How do you explain the reason why there is no work?”

Letter to Parliament

On May 28, the Island Council sent a letter to the Second Chamber’s Permanent Committee for Kingdom Relations with a collegial appeal and to share its concerns. The letter stated that unfortunately, the forceful signal of the walk-out by the Island Council in November 2019 was not picked up by the Dutch Government and that once again Saba was faced with an unworkable situation.

The fact that the free allowance is too low for the Saba government to execute all its legal tasks was pointed out in the letter, and the fact that since 2012, with the exception of some minor adaptations in connection with price increases, there have been barely any substantial adaptations. “This, while in the course of the past years more tasks were added, and the execution of existing tasks intensified. Incidental allowances were allocated, which mostly concerned investments, but without structural amounts being added to the free allowance to facilitate the maintenance and upkeep of these investments,” it was stated in the letter which mentioned a number of examples where the funding was too low to execute a specific task.

The Island Council pointed out that Saba was extremely grateful for the for the emergency measures that the Dutch Government has allocated after the corona crisis. As political representatives, the Island Council Members emphatically asked their colleagues on the other side of the ocean to instruct their government to secure the necessary funding so Saba can properly execute its tasks.

“We hope that you will understand our urgent call and that with the same broad Parliament support that you give us in the areas of poverty eradication and the social minimum you will also be able to accomplish the issue of an adequate free allowance.”

GIS Saba