With the approved budget, the Government can look for funds on the international market to provide aid to those most affected by the Coronavirus crisis.
The Minister of Finances announced the steps the Government has been taking to address this crisis:
- The first step taken on March 13, 2020, when the first cases of Coronavirus were confirmed in Aruba, was to calculate the financial impact this crisis will have on Aruba. Different scenarios and calculations were made together with the Central Bank of Aruba and with information provided by the Standard and Poor’s and IMF.
- The second step is to find the funds needed to stabilize the situation to guarantee the continuation of the AZV, SVb and the Government. On March 24, 2020, the Parliament approved the 2020 budget. Now the Government is awaiting approval by the Council of Ministers of the Kingdom of the Netherlands to seek funds on the international market.
- Once the funds are in, they will proceed with the third phase that includes the reduction and adjustment of the Government costs, since it will take Aruba many years to fully recover from the effects caused by this crisis.
The 2020 budget includes a stimulus package as a temporary relief in 3 areas:
- Unemployment, mass layoffs due to the economic crisis caused by the Coronavirus. This stimulus plan includes an investment of AWG. 214 million.
- AWG. 40 million will be invested in small or medium businesses (SME’s) with less than 50 employees.
- AWG. 429 million will be injected into the social insurance funds of the AZV and the SVb. This is based on the deficits due to the shutdown of most businesses. In total the budget is AWG. 683 million to cover the proper functioning of these organizations.
Prime Minister Evelyn Wever-Croes stated that these are not the only financial needs of the Government, since the fiscal reform package eas not included in the budget, which would have contributed with another AWG. 103 million.
The Government will now have to find this AWG. 103 million somewhere else. The economy will shrink this year due to the Coronavirus, and that is the reason the Government needs to find the funds to cover the loss of revenue.
The Government has also considered the fact that companies and taxpayers will face difficulties paying their taxes and have calculated a deficit of AWG. 250 million. All by all, the Government is in the financing need of AWG. 1.3 billion.