Country Report Sint Maarten 1st Quarter 2015

Update Country Report Sint Maarten 17 Feb 2015

Government at odds with Netherlands over integrity reforms

Event

An ongoing row over how best to institute integrity reforms in Sint Maarten is rankling relations between the island's elected officials and the Dutch government.

Analysis

A series of scandals in recent years, some involving accusations of ministers accepting bribes, has highlighted the weakness of institutions on the island and prompted a slew of investigations and calls for reform. Three separate integrity reports-a review initiated by the country's independent General Audit Chamber; a parliamentary committee investigation called for by the then prime minister Sarah Wescot-Williams (2010-14); and an inquiry prompted by the Dutch government and conducted by a consulting firm, PricewaterhouseCoopers-were issued in 2014. A fourth report, being conducted at Ms Wescot-William's request by Transparency International, a corruption watchdog, is still being compiled. The reports generally agree on the problems plaguing the island's institutions. Improper interference from politicians, a lack of regulations and poor financial controls all contribute to widespread institutional shortcomings.

Disagreement on the best way to implement reforms has put the newly appointed prime minister, Marcel Gumbs, at odds with the Dutch government. Mr Gumbs, who leads a coalition dominated by the United People's party (UP), faced a four-month delay in forming his government, mainly because the Netherlands insisted on unprecedented deep background screening of ministerial candidates. Mr Gumbs wanted Sint Maarten's parliament to oversee a future "Integrity Chamber" that would propose reforms, but the Dutch minister of the interior and kingdom relations, Ronald Plasterk, disagreed, exercising a clause in the constitution of the Charter of the Kingdom of the Netherlands to create a fully independent chamber.

Dutch officials also floated a separate initiative to strengthen the island's justice system, wherein 50 to 55 Dutch detectives, funded by at least EUR10m (US$11.4m) in Dutch funds, would have investigated suspected integrity violations. The proposal was leaked to newspapers, and generally opposed owing to fears that it would challenge the island's sovereignty. Sint Maarten officials have since said that this option is "off the table", but it is unclear what will take its place. Dutch policymakers appear to be losing patience with what they perceive as Sint Maarten's opposition to improving governmental integrity. Additional Dutch intervention is likely.

Impact on the forecast

The event supports our forecast scenario that institutional shortcomings will remain a major issue in the island's business environment and will continue to affect bilateral relations with the Netherlands.

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