Category Archives: Economy

What budget does Statia need to be just above the poverty line?

The Nibud (agency for budget information in the Netherlands) was assigned by the executive council of Bonaire to help in the proces of making exemplary budgets for the people on Bonaire.  http://www.nibud.nl/over-het-nibud/actueel/nieuws/artikel/minimumvoorbeeldbegrotingen-voor-bonaire.html

According to Nibud the following budgets are needed to have the minimum level of welfare (just above poverty line)

Here you can see the budget examples: the entire report is not publicized.budget examples

 

 

 

 

 

 

 

Two journalists of the NTR website have also done research and come to the conclusion that daily shopping on Bonaire is 40 percent more expensive then in the Netherlands. http://caribischnetwerk.ntr.nl/2014/02/18/boodschappen-op-bonaire-ruim-40-procent-duurder-dan-in-nederland/

The situation on St. Eustatius is most likely approximately the same, since the island is also almost entirely dependent on imported goods, has the same tax regime and no price control.

SUBSISTENCE AGRICULTURE FOR SUSTAINABILITY IN SMALL ISLAND ECONOMIES

(from the Daily Herald Nov 22)

SUBSISTENCE AGRICULTURE FOR SUSTAINABILITY IN SMALL ISLAND ECONOMIES

 

2014 is the International Year of Family Farming (IYFF).  The IYFF aims to raise the profile of family and smallholder (subsistence) farming by focusing world attention on its significant role in alleviating hunger and poverty, providing food security and nutrition, improving livelihoods, managing natural resources, protecting the environment, and achieving sustainable development.

No one will disagree that the price of food in the Caribbean is expensive.   Sometimes the expense causes us to make unhealthy choices.  Poor food choices are directly linked to many public health problems today (hypertension, diabetes, cancer etc).  It is indeed time to celebrate the IYFF as it can potentially lead to increased food security and a general improvement in public health.

 

While the IYFF is important, there are some challenges. I myself am currently living in Sint Eustatius, Caribbean Netherlands.  Much of my discussion surrounds my reaction to comments heard or actions observed while residing on this island.   I do not assume that my personal experience and observation permeates throughout the rest of the Caribbean. However, knowing some of the dilemmas facing a small island may assist others.

 

On Statia there are a few local farmers, a wide variety of free ranging livestock (cows, goats, sheep chickens, pigs etc), and of course seafood.  It is my opinion that Statia, as small as the island is, has the necessary resources to be semi self sufficient in terms of producing the food that people need and consume.

 

Interestingly, every other week there is a sale of local meat and fish.  Every week there is a market for local produce.  Interestingly, a great percentage of the people supporting these events are not local (migrated for work on the island).  This is not to say that no Statian ever visits the markets.  They do.  But the proportion is very low.

 

What this means is that the local population is potentially inhibiting economic sustainability by not supporting the local farmer and ultimately increasing the risk of food insecurity.  This also means that they may be working in opposition to their best interest by endangering their own health in the long run by making a choice to choose foods that have less nutritional value.

 

It is not my intent to blame people outright because there is usually a history behind why people think the way they do.  So lets explore this history.  Many scholars agree that the belief that better food comes from the outside and the action of not supporting the local farmer derives from the colonial period when food was not grown for consumption because this detracted from the utility of the land and the production of exported foodstuff (for profit).  Subsistence needs were met through importation of products.  This colonial ideology must simply be discarded.  Local foods are healthier (field to table equates to less transition time), taste better, and their purchase assists in developing sustainable economies.

 

 

I have also heard that the food produced on the island is not safe.  However, most food born illness result from handling, preparation, or storage. Food born illness not resulting from these factors can generally be attributed to not knowing where your food originates.  For example, mad cow disease is a progressive neurological disorder of cattle that results from infection by a prion. There is strong evidence that the outbreak in the UK was caused by feeding prion-infected meat-and-bone meal to young calves.  Therefore, the outbreak resulted from feeding cows meat and bone- something that cows are not supposed to eat.  Therefore, local meat is likely much safer because cattle are generally free ranging and eat what cows are supposed to eat…GRASS.  Furthermore, when buying food locally you can always ask the owner of the animal what the animal eats.

 

 

There is another historical explanation but this one regards the reason why people do not plant anymore.  Historically, upon the eve of the industrial era, there was a shift and people left the agricultural field to find employment in industrial settings.  Corresponding with this shift was also a change in the mentality where people began to feel that farming was not a reputable occupation.  It is at this time that there was a shift from subsistence (family) farming to commercial farming (for profit).  What we know now is that the system of agriculture is not working (resulting in the high price of foodstuff and malnutrition).  Consequently, there is more emphasis on local production and community distribution of food. Generally food production must be removed from its current anonymity and once again acquire a face and identity.  This would result in the re-establishment of some form of communication with one another and a feeling of responsibility for one another.

 

So here are my suggestions.  We need to remove the social stigma attached to farming and train a new generation of small scale framers.  They need to be developed and nurtured locally and nationally so family farming can become a developing economic agent.  They will come to play an important role in reducing the vulnerability of food insecurity for households, communities and nations and will also help mitigate high food price inflation.  Second, people must realize the importance and safety of buying local.  Purchasing locally produced food is beneficial to the local economy and the public’s health.  2014 is the International Year of Family Farmers.  Let’s work to make it successful!

 

 

 

Dr. Teresa E. Leslie is the president and founder of the Eastern Caribbean Public Health Foundation which is based in Sint Eustatius.  Dr. Leslie can be reached at tleslie612@gmail.com

Mixed reactions to oil spillage report

ST. EUSTATIUS–The Department of Waterways of the Ministry of Infrastructure and Environment recently issued a report on the October 20, 2012, oil spill at NuStar Statia Terminal. The company’s response had been too little and too late, in certain respects, it was stated in the report. The Daily Herald asked several stakeholders in St. Eustatius for their reactions.

“I think it has been made clear to NuStar that the rules are being applied and that from now on the company is expected to act adequately under such circumstances. According to me, the report is clearly stating that (financial) sanctions will be imposed and that slow response will no longer be tolerated,” Commissioner Koos Sneek said.

 The oil spillage, which occurred in the early morning hours, was caused by a ruptured hose at Statia Terminal’s floating hose station, while oil was pumped into a ship. Some 15 minutes after the spillage was first reported, NuStar started investigations, but no oil was sighted until one hour later around the hose station. One hour and 25 minutes after the spill started, NuStar decided to halt all activities at the loading station. Efforts to contain the pollution and to clear the oil didn’t  start until 7:00am. Divers found the hole in the cargo hose at 8:35am, after which it was temporarily closed at 10:25am.

NuStar said the spillage was a result of third-party damage. “Although it was still dark at the time, NuStar employees immediately implemented an investigation to identify the source, as well as determine the nature of the release. NuStar personnel also began mobilizing people and equipment for containment and cleanup, and worked with government officials in the response effort. NuStar acted quickly and appropriately in investigating the release, and preparing for containment and cleanup. NuStar deployed all necessary people and equipment in as safe and efficient a manner as feasible under the  circumstances, and used all feasible methods to recover the product. Thanks to quick response and mutual cooperation, the cleanup was implemented quickly and safely and there was no  resulting damage,” company management stated.

In the report it was stated that a speedy response by the terminal was hindered by the fact that the oil spill occurred at night with limited vision. The Inspector considered the response timely, but was critical of the fact that efforts to contain and clear the oil contamination didn’t start until four hours and 15 minutes after the spillage was first reported, which was considered a violation of NuStar’s responsibilities as stipulated in its permit.

NuStar also failed to take certain preventive measures, such as placing an oil-containment screen. measures taken along the shore near the terminal were deemed sufficient. Company management  said to be pleased that the agency concluded in large part that NuStar acted responsibly and in compliance with the laws and its permit. But it disagrees with a few assertions in the report, including statements regarding the presence of oil in Saba.

 “Our investigation in the area around Saba revealed no evidence that the fuel from the subject spill reached Saba. We will be discussing the report and these and other issues with the agency, and are hopeful that we can reach a favourable resolution via further discussions,” NuStar management said.

 According to the report, part of the oil spillage had drifted into open sea. As a result of this, oil globules were found in Saba and part of the contamination drifted over Saba Bank. This was also considered a violation of the permit. NuStar said to be committed to working cooperatively with government officials with respect to its operations on Statia and to being committed to safe and environmentally sound operations. Investigations revealed that the cargo hose was damaged by the propeller of a ship or boat. The report said it could not be established whether the damage was caused by a third party or by NuStar itself. The damaged cargo hose was confiscated by the Prosecutor’s Office. The report said that measures will be taken if the permit’s stipulations are violated again before February 1, 2014.

“A report is only as good as its follow-up,” according to Statia Safe and Sound Foundation, which is critical of NuStar’s late response to the spillage and of the Dutch authorities seemingly extenuating this. “Everything revolves around monitoring and enforcement. You can have as many rules and regulations, but if not upheld, those rules are only there to point out the culprit, while those affected remain with the damage,” said Safe and Sound Chairman Walter Hellebrand.

He also pointed out that the report did not indicate measures to be taken to prevent similar damages to the oil installation in the future. Hellebrand said that NuStar, in conjunction with the Harbour Master, was to restrict access to the terminal’s loading and unloading zone and to indicate the location of pipes at sea by lights. But even though these measures were due November 2012, “this is still a work in progress,” Hellebrand stated.

 St. Eustatius National Parks Stenapa, which borders with the terminal, was also asked for comment, but didn’t provide any.

Bonaire, St. Eustatius, Saba and Dutch government embrace development plans

Press Release

March 14th, 2013

 

Bonaire, St. Eustatius, Saba and Dutch Government embrace development plans

 

The Hague – Ministries in the Dutch Government have reacted positively to development plans drawn up by the public entities of Bonaire, St. Eustatius and Saba. The Dutch Government has the ambition, together with the islands, to remove the physical and social backlogs. The Dutch government recognizes that more needs to happen. The pace at which the various backlogs will be removed is dependant on the budgetary possibilities of the Kingdom. The removed backlogs must however be maintained.

 

The plans formulated by the public entities of Bonaire, St. Eustatius and Saba will be worked out in further consultation. With this correct priorities can be established. The Ministries of Home Affairs & Kingdom Relations (BZK), Economic Affairs (EZ) and Infrastructure & Environment (I&M) offer expertise to arrive at more detailed plans. The Ministry of Home Affairs & Kingdom Relations will further make available 0, 5 million Euros. For investments in nature a regulation for contribution is being developed in which a total of 7, 5 million

Euros will be made available. The remaining financing of the adjusted plans will be worked out further in the framework of the preparation of the 2014 budget. The Dutch Government-  preconditioned by budgetary space-will prepare the detailed plans (for example the integral plan for Rincon-Antriol-North Saliña) to realize the implementation by means of extra-ordinary allowances or interest free loans, or  subsequently  through the execution of the plans by the concerned ministries.

 

The Dutch government finds that the current rules with regard to interest free loans should not cause obstructions for realizing the implementation of plans with good potential. Here then applies the condition that the Commission for Financial Supervision establishes that the

public entities can comply with the financial obligations. The Dutch government therefore agrees to further work out how through own investments by the public entity and/or through the granting of interest free loans by the Kingdom plans can be realized.

The delegations are also satisfied with the confirmation that Minister Plasterk of Home Affairs & Kingdom Relations will expressly function as the coordinating minister for the development plans.

Nustar Terminals permit drafted

ST. EUSTATIUS–The executive council of the Public Entity of St Eustatius has announced that the draft permit and the accompanying application for a permit for NuStar Terminals NV under the Hindrance Ordinance St. Eustatius 1993 has been published, a press release from Government Information Services said. The draft decision concerns a permit resulting from an application by NuStar Terminals NV for the storage and overhaul of mineral oil products and a refinery located at Tumble Down Dick Bay. There are regulations associated with the permit for the interest of protecting the environment. Any person may register a written objection against the requested permit starting from March 8 through April 8. In accordance with article 14, second paragraph of the Hindrance Ordinance St. Eustatius 1993, the person who submits a notice of objection, may request not to have personal information disclosed. To be able to lodge an appeal on the final decision in a later phase, a notice of objection must have been submitted against the draft decision. The draft decision and the documents pertaining to the decision are open to public inspection during regular office hours at Planbureau in Fort Oranje. One can make one’s objections regarding this draft decision known by sending them to; Executive council of the Public Entity of St Eustatius, Government Guesthouse, Oranjestad, St. Eustatius. Further information regarding the content of the draft decision can be found by contacting the head of the Planbureau, M. Timber at +599-318-3283, or planning.bureau@statiagov.com

Govt denies RCN request for permit

PHILIPSBURG–As per court order, government has responded to the request by Kingdom Service Caribbean Netherlands RCN for a permit to land a fibre optic cable on St. Maarten by denying this request in writing.

The reply by St. Maarten’s Minister of Telecommunications Romeo Pantophlet is in keeping with the position of his predecessor Franklin Meyers and with comments made recently by Prime Minister Sarah Wescot-Williams: St. Maarten will not take a decision that could adversely affect the TelEm Group of Companies. The premise of St. Maarten’s government has consistently been that the country already has a fibre optic cable from San Juan to St. Maarten and, although understanding the benefits of an additional one, the country is not depending on it. Smitcoms’ investment into the current fibre optic cable is some US $18 million. It is argued that if a permit for a new fibre optic cable is granted and a competitor of TelEm buys into this new fibre and bypasses Smitcoms, its average cost is only approximately US $2.4 million, putting it in a position to compete much more aggressively than TelEm, which would be burdened by large overhead. The matter ended up in court and RCN lost the court procedure. RCN had started laying fibre optic cables in Saba, St. Eustatius and St. Kitts.

About Turn Over Tax SXM

 

The reason for this “decree,” according to Tuitt, is the issue of the ToT. The Dutch Government wants St. Maarten to remove ToT from goods intended for Dutch public entities Saba and Statia. The Dutch want their demands to be met before meetings can be held with St. Maarten.

The ToT issue and other matters are to be looked at in a technical committee comprising two representatives from The Netherlands and two from St. Maarten. That committee is to formulate and present solutions to the two governments.

However, Tuitt pointed out that St. Maarten has never levied ToT on Saba and Statia. “The problem of the Turnover Tax has been created by Holland. It has not been created by St. Maarten. … Turnover Tax is included in all the prices on St. Maarten. Turnover Tax was implemented years ago, not yesterday.”

Turnover Tax was also implemented on Saba and Statia, he continued. However, when the two islands became Dutch public entities, the Dutch Government opted to impose “a kind of sales tax.” This tax is levied at the importation end and at the sales end. “You created a second, so why do you want someone who has a tax already to subsidise your tax, because you implemented a new tax? If doesn’t have logic.”

 

Aspects concerning the real estate tax (opinion)

Aspects concerning the ‘vastgoedbelasting’ (real estate tax)     February 2013

 

The real estate tax, as the name itself implies, is the tax levied on a plot with a house built on it that is not being used as permanent residency by the owner. In the Netherlands the equivalent of this tax is the ‘onroerend zaak belasting’ (ozb).

 

Real estate tax and ozb are municipality taxes that cover the costs of certain matters in a municipality.

 

To define the real estate tax, one needs a valuation of the plot and the house. Two years ago pictures were taken (from a car) of all the houses on the island. The valuation has been defined based on these pictures, which is not a valid way of assessing a valuation. To define the real estate tax the valuation needs to be done based on the market value. The officials did not inform themselves about the prices that are being paid when property is sold.

Furthermore some contracts of sale contain restrictive conditions, for example a long lease agreement.

 

The risk of estimating the value in this manner is that it will be difficult to negotiate about the  valuation.

In the Netherlands there are small organizations that make such arrangements for costumers on the expenses of a municipality.

 

The average percentage of what has to be paid on the market value of a house in the Netherlands is estimated on 0.1 %.

 

On the island this was 1% and is reduced to 0.8%. That is still 8x as much as in the Netherlands.

 

For example, the levy on a plot in the Netherlands that is 200 euro per year, will cost about 1200 USD per year on the island.

(Not 1600 USD due to an exemption of 50,000 USD on the praised value)

 

To explain this difference, the officials say that one can not compare the real estate tax on the BES-islands with the ozb in the Netherlands due to added components to the tax in the BES.

 

Because the profit tax has been eliminated something else needed to replace it and more means are needed to cover the largely increased costs of health care.

 

Before explaining why these items can not be added to the real estate tax one needs to understand that profit tax and health care are national matters. Real estate tax is a matter of a municipality. Therefore these matters can not be combined.

 

If someone rents out one or more accommodations or uses it in another way for business purposes, then the owner should be charged based on how he benefits. The present real estate tax is not based on how the real estate  is used, but is a fixed amount per year. Therefore a situation of inequality arises.

 

Business people who do not inhabit their houses and make a profit on them,

will most likely accommodate these houses in a private company or a similar structure. In this way they will have to pay less tax on their merits.

 

We notice that of two identical plots, the owner that makes much more profit on his plot will obviously benefit more than his neighbor while both pay the same amount of real estate tax.

 

Pensionados who do not rent out their house while being away will have no benefits from this house. They do have to pay the full real estate tax and therefore have to suffer for the eliminated profit tax of which they do not and did not take part.

 

It would be fair if all house-owners, who would be considered for real estate tax, would be levied according to the Dutch standards. Furthermore the ones who make profit on the rent of their accommodations should be levied in the regular manner and not through this real estate tax.

 

Concerning the excessive increased costs of health care, this of course has nothing to do with the real estate tax.

 

The consequences of the present plans are:

 

The lessors of accommodations will increase the costs to the tenants.

 

Owners of a second home who do not rent out their house and do not make a profit on the house, will be disadvantaged. It is unjust that they will have to pay a tax including components that are not applicable to their situation.

Therefore some of them will want to sell their property and others may not continue maintaining their property anymore. These houses will be neglected and their value will decrease. Then the validation will be even more invalid and the island will be spiraling downwards.

 

The decision to send an assessment to a select group of people instead of everyone at the same time, is a form of legal inequality.

 

Lastly retroactive levying, back to 01-01-2011, must be an error in procedures since no-one has ever been informed in an earlier stage and was therefore not prepared to this unexpected high expense.

 

Hopefully the officials who are responsible for the design and execution of the real estate tax will realize the consequences of certain aspects of this tax and reconsider them.

 

A concerned inhabitant of Statia