Switching from the Antillean guilder to the US dollar
The discussion about switching from the Antillean guilder to the US dollar in Curaçao and St. Maarten when the Netherlands Antilles ceases to exist has died down somewhat since a symposium on the subject at the end of last year. However, preparations for “dollarisation” continue unabated behind the scenes in financial circles in Willemstad, confirmed director Chicu Capriles of Maduro & Curiel’s Bank (MCB), the parent company of Windward Islands Bank (WIB), during a recent interview on TeleCuraçao.
The banker was quite candid about it, saying the move made sense considering the strong economic ties to the US. He added that the public would be duly informed in due time and every effort would be made for the process to go as smoothly as possible.
The fact that the BES islands Bonaire, St. Eustatius and Saba, which are to become special overseas bodies of the Netherlands, have already chosen for the US dollar – rather than the euro, which says a lot – plays a role as well. Maintaining an Antillean guilder only for the two islands in the process of becoming autonomous countries in the Dutch Kingdom simply is not worth it, also because the dollar already rules in St. Maarten. The latter is definitely the case and has been for years. In fact, if it were not for government and people having to pay a one per cent foreign exchange licence fee at the bank every time they take out dollars, most likely even fewer guilders would be in circulation on the Dutch side.
That’s why it’s hard to understand why the local political establishment appears to be dragging its feet on this issue. After all, a switch to the dollar on “The Friendly Island” with its one-pillar tourism economy and North America as predominant source market most likely would be much easier and less cumbersome than in Curaçao. Not only that, but if Curaçao goes the dollar route it would leave St. Maarten little choice, because an own currency just for the island considering the widespread use of the dollar is hardly worth considering. In addition, the agreement for the two future countries to continue sharing the Central Bank would lose much of its value, because the role of that institution would be severely diminished in case of ”dollarisation” and it probably would be replaced by a much smaller and less influential regulatory board to supervise the financial sector.
It’s noteworthy that Central Bank President Emsley Tromp is the main proponent of switching to the dollar, despite the strongly limiting effect it would have on the very institution he heads. His position apparently has been adopted by financial circles in Willemstad to the point where work is already underway it make it a reality.
St. Maarten should waste no time in doing its own homework. A switch to the dollar would indeed seem to make every sense in the world and at least would spell an end to the current undesirable practice of penalising local residents with a licence fee for doing business in the predominant currency.
Source: The Daily Herald St. Maarten
Venezuela protests to US on claimed air incursion
CARACAS, Venezuela — AP. Venezuela made a diplomatic protest to the United States and the Netherlands on Monday, saying a U.S. military plane violated its airspace last week after taking off from the Dutch Caribbean island of Curacao. A U.S. diplomat denied it.
Venezuelan Foreign Minister Nicolas Maduro called the purported incursion “an attempt to provoke some type of incident.” He presented a protest letter to John Caulfield, charge d’affaires at the U.S. Embassy in Caracas, and to Dutch diplomat J.G. van Vloten Dissevelt.
Maduro expressed concern about the Netherlands’ role, saying that “we are worried that their territories are being used by the United States to make illegal incursions into our airspace.”
Caulfield denied the accusation, saying a U.S. military plane has not strayed into Venezuelan airspace since 2008, when the U.S. acknowledged what it called an accidental incident involving a Navy plane. Caulfield noted U.S. and Venezuelan officials discussed that incident in 2008.
“We have not had any other event of a violation of Venezuelan airspace by American planes,” Caulfield said.
In making the allegation last week, Chavez accused Washington of trying to provoke his government by sending an American P-3 plane from Curacao to twice enter Venezuelan airspace Friday. The plane was met by Venezuelan F-16s and escorted out of Venezuelan airspace, he said.
Venezuelan Vice President Ramon Carrizalez appeared on state television Monday to present what he said was evidence of the alleged incursion. Flanked by military officials, Carrizalez showed diagrams of what he said was the route taken by U.S. aircraft after its takeoff from Curacao.
“We are showing the country and the world that incursions into our airspace are occurring to provoke us, to test our reaction and possibly, at any moment, to launch an attack,” Carrizalez said.
U.S. officials have said the American military’s use of airfields in Aruba and Curacao for counter-drug flights poses no threat to Venezuela.