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Today's News: Financial Turmoil on the Island

mpgoede

Today's News: Financial Turmoil on the Island

 

June 20, 2024

 

In today's newspaper, two articles captured my attention: the bankruptcy of JetAir and the million-dollar loss reported by the largest credit union, ACU. These stories unfold in the broader context of financial instability on the island, highlighted by the recent bankruptcy of one of the island's oldest radio stations, which has been broadcasting for nearly 90 years. This comes alongside ongoing troubles with Ennia, the island's largest insurance company, and the aftermath of Giro Bank's bankruptcy. In addition to the issues with the new hospital and the salary raises for top officials of the Central Bank of Curaçao & St. Maarten, it's clear that the island is facing significant financial, governance and management challenges.

I find myself feeling detached about the airline's bankruptcy. It's not that I don't care, but I simply have no more tears to shed. I never had much faith in JetAir, as history has shown that only small carriers like Divi Divi Air have survived in our market. Numerous airlines have come and gone, all ending in bankruptcy. The investors behind JetAir lacked experience in the airline industry, which was a red flag from the start. When planning a trip to Medellin, I considered JetAir but discovered it was cheaper to fly via Panama than to book a direct flight with them. Shockingly, a trip to Amsterdam costs less than a flight to Medellin with JetAir.

As an early member of the ACU credit union with over 25,000 members, I'm deeply concerned about the financial loss they've reported. It's likely that some members will leave the credit union due to this setback. One of the main issues ACU faces is the high rate of non-performing loans; many members simply don't repay their loans. This is puzzling, especially given that the central bank intervened and imposed significant costs for their oversight.

This reinforces my belief that we suffer from poor governance and management on the island. Nepotism leads to disastrous outcomes, with appointments based on family and friendships rather than merit. I'm baffled as to why there isn't a textbook for business students that documents these cases. The lack of relevant study material means students don't learn from these repeated mistakes.

We need a systemic overhaul to address these issues, and we must start by ensuring that our leaders and managers are qualified and held accountable. Only then can we hope to see a more stable and prosperous future for our island.


Miguel Goede

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