WILLEMSTAD - In its most recent report, the Court of Audit notes that again there are serious shortcomings and weaknesses in the country’s financial management. It noted that since 2010 and as a point of measurement the agreement to the acquisition of the status of autonomous Land within the Kingdom as a measurement point, that the annual accounts have been rejected on a yearly basis by the Court of Audit.
Call for Good Public Administration
According to the Court, plans have been continuously talked about to address the shortcomings but without timely implementation or sufficient progress made. Public accountability has been called for with transparency and compliance with all relevant legal provisions.
Research Findings
The Think To DO Institute, in its 2020 research in response to conclusions of the Kingdom government related to the Size of Government, noted also these costly inefficiencies in the Institute’s report to the Government of Curacao and the Kingdom.
The purpose of this research was to conduct an independent inquiry into whether the “size of government” of Curaçao is too big compared to regional and/or international norms. At the time of the research, there are assumptions that the size of government is “too big” and that this has a detrimental effect on the broader economy. The inquiry was conducted at the request of the Ministry of Planning dated May 19, 2020 (case number 2020/014891) based on a set of questions determined as key foci to the inquiry.
The inquiry was to determine if, by comparison to other small island nations and to international norms, an independent analysis would offer clarity. The parameters of the inquire included comparisons based on population size, global representations, regional representations and government forms. The research recognized that some small island nation structures are more autonomous, some independent and some territorial. This provided the opportunity to see if those relations or “devolved dependencies” influence size of government, and if so, in what ways. Eleven countries and Curaçao were selected for inclusion for qualitative comparison purposes in this study. Of these twelve countries, based on the available quantitative data, 6 countries were included for quantitative comparison.
There is a long-term pattern of external pressures from annual reports of IMF, CFT and other reports that relate to the efficiencies and effectiveness of the government. There is also concern related to the long-term challenge of the country’s ability to manage its public debt, and, thereby, the country’s solvency. And most recently, there is pressure from the Kingdom to address these concerns by way of a structural reform plan. This concern remains.
The Think To DO Institute believes that it is important to republish their previous recommendations, especially those related to the country’s finances and institutional strength:
- All Ministries, Departments and Data Dashboards of government and government-held entities adhere to a consistent system of Standard National Accounts Guidelines in order to definitively determine the participants of government and public sector.
- The Standard National Accounts Guidelines that are referenced in Recommendation 1 be confirmed in annual reporting across all public sector ministries and departments, semi-governmental entities and any entities receiving subsides; and there is a validation process of the use of consistent accounting definition and algorithms applied and used methodically year after year.
- The review of the wage bill needs to be undertaken immediately to understand its main drivers (including consumption vs. employment) and then put in place consistent, lasting strategies that result in the most agile and effective government structure possible to offer the best services to the people.
- The creation and implementation of a coordinated plan to review and revise government spending structures, processes and priorities needs to be put in place to address and connect the wage bill (what the government is spending on wages, i.e., consumption) to the broader economic context (GDP). This plan must include:
· a monitoring system with consistent algorithms, and corrective measures.
· strategies to reduce the percentage of public employees as percentage of the workforce, while acknowledging that “Small Island Development States (SIDS)” consistently have a larger workforce in order to provide basic services effectively and efficiently to the community
· actions highlighting how to reduce the cost of middle level civil servants as those costs are disproportionate to their responsibilities.
· alignment of the civil servant evaluation system, the jobs description book, the payment scale, etc. to the new, modified government structure and include measures to encourage and reward effectiveness and efficiency standards of service.
- By way of strategies outlined in Recommendations 1-4, improve country status in cross country comparisons used by the IMF to measure effective government performance as measured by:
· Government expenditures in percent of GDP
· Government employees wage bill in percent of GDP
· Government employees wage bill in percent of government expenditures
· Percentage point difference between GDP growth minus wage bill growth
· Public employees as a percentage of labor force
It must be noted that all of these recommendations are best realized as a part of a well-organized, long term, country master plan based on three to five overall goals that can be carried by all ministries and that has been authorized by Parliament.
For more information and the complete report, contact the Think To DO Institute at contact@thinktodoinsitute.com
The Think To DO Institute is an independent, apolitical think tank located in Curaçao, Dutch Caribbean. The T2DI has as its purpose to help Curaçao become a more resilient society by producing research that is based in best practice, and which delivers practical solutions to the barriers that hold the community back from becoming more resilient. Research evidence shows that Resilient Societies are created by attention to people, to organizations, to place, and to knowledge. Resilient Societies design, redesign organizations, institutions and systems to better absorb disruption, operate under a wide variety of conditions, and shift more fluently from one circumstance to the next. For more information about the Think To DO Institute, visit the website: www.thinktodoinstitute.com