Public Meeting with ATIA on the Kingdom Act HOFA and the National HOFA Ordinance
ORANJESTAD – Minister of Finance, Economic Affairs, and the Primary Sector, Geoffrey Wever, has organized a series of public meetings to promote greater understanding and dialogue regarding the Kingdom Act HOFA (Sustainable Public Finances Aruba Act) and the National HOFA Ordinance (LHOFA) within the Aruban community.
Various labor unions and civil society organizations are participating in these meetings.
As part of this initiative, a meeting was held with ATIA on May 25. ATIA is an important organization representing the private sector and plays a vital role in Aruban society. Since 1945, ATIA has represented the trade sector and currently consists of approximately 150 members, collectively representing more than 5,500 employees. ATIA’s voice is highly valuable to Aruba’s current business environment, employment sector, and future development.
The purpose of these public meetings is to provide accurate and comprehensive information about both laws, create opportunities for questions and dialogue, and enable the community to form informed opinions based on complete and factual information.
During the presentation, Minister Wever explained that Aruba is already subject to financial supervision at the Kingdom level under the Aruba Temporary Financial Supervision Ordinance (LAft), which has served as the legal basis for the current supervision framework since 2015. The proposed HOFA legislation does not introduce financial supervision for the first time; rather, it proposes a new structure focused on sustainable public finances and a more flexible legal framework for the existing supervision system.
One of the key topics discussed during the meeting was the Advisory Council’s opinion regarding Article 38 of the Kingdom Act HOFA. According to the Council, this article may conflict with Aruba’s Status Aparte (Aruba’s autonomous constitutional status within the Kingdom of the Netherlands). The discussion also addressed the so-called “exit clause” included in the Kingdom Act HOFA. Unlike previous legislation, Article 42 of the Kingdom Act HOFA contains an explicit mechanism through which financial supervision may be terminated once Aruba has met the agreed financial and institutional conditions over a specified period of time.
With regard to the Advisory Council’s opinion, the government is currently awaiting the advice of the Council of State on the Kingdom Act HOFA in order to prepare the next steps.
Minister Wever emphasized that this aspect is important for understanding the legislation as a whole.
"Public debate often focuses on individual elements of the proposal. However, the legislation also contains a concrete mechanism for ending supervision once Aruba has achieved the agreed objectives. This is an important element in balancing financial responsibility with institutional autonomy," Minister Wever stated.
It was further explained that the new legal framework is based on the principle that Aruba remains responsible for managing its own public finances. The objective of the legislation is to strengthen and safeguard public finances, create a stronger foundation for economic growth, investment, and financial stability, and reduce Aruba’s financing costs.
The meeting also addressed how the financial standards established under the Kingdom Act HOFA focus on the sustainability of public debt, fiscal discipline, and long-term financial stability. These standards are set out in Articles 3, 4, and 5 of the Kingdom Act HOFA and include debt benchmarks, primary balance targets, the convergence process, and standards for financial management. The ultimate goal is to strengthen Aruba’s financial position and create more room for investments that directly benefit the community.
Minister Wever noted that the Kingdom Act HOFA could also provide direct financial benefits to Aruba. Aruba currently pays an interest rate of 6.9% on its COVID-related loan from the Netherlands. Under the proposed framework, that rate could be reduced to approximately 3.5%, resulting in estimated interest savings of approximately AWG 128 million.
On loans that Aruba currently holds on the international capital market, the country pays approximately 6.5% interest. The Netherlands has indicated its willingness to refinance these loans at an interest rate of approximately 3.5%, which could generate an additional estimated savings of approximately AWG 238.5 million.
In total, Aruba could realize interest savings of at least AWG 366.5 million. In addition, Aruba may be able to secure future financing at significantly more favorable rates than those currently available on the open market.
According to Minister Wever, the funds saved through lower interest payments could be reinvested in community priorities such as infrastructure, education, public transportation, the primary sector, and maintaining a clean and attractive Aruba.
Minister Wever thanked ATIA and its members for the open, constructive, and productive dialogue.