Klaas Knot: Step by step towards a sustainable future
Speech by Mr Klaas Knot, President of the Netherlands Bank and chair of Financial
Stability Board, at a lunch of the Curaçao Business Association on the importance of
sustainable green finance, Curaçao, 15 February 2024.
* * *
"Fall in love with the pearly white sandy beaches, breathtaking diving locations and the
colorful street scene of Curaçao. Choose a holiday in Curaçao and do what the
residents have been doing for generations: relax!"
That is the text on the website of a large travel organization. It could almost make you
think that life on this island is all about relaxing. But you know better than anyone that
nothing could be further from the truth. Because entrepreneurs like you work hard every
day. To keep Curaçao's economy running and its residents at work. To ensure that the
people here are secure in their livelihoods. To ensure that all those tourists get the
holiday they dream of.
All that would not be possible without entrepreneurs. Without entrepreneurs who are not
afraid to think out of the box, who dare to be innovative and decide to be sustainable.
Entrepreneurs who don't believe in standing still but in moving forward, towards a
sustainable economy and a sustainable future.
A future in which we choose the long term instead of the short term, in which we
choose prosperity and well-being, economic development and quality of life.
That will not happen without choices and challenges, opportunities and threats, risks
and investments.
As your chairman Zeno Circkens said last year in his speech about the future of
business in Curaçao: "We stand at a crossroads." I can assure you: you are not
standing there alone. Working on a sustainable future, on sustainable economic growth,
is first and foremost a question of teamwork. The driving force behind that team is the
government. A government that takes responsibility for creating the right preconditions
to enable, encourage and support sustainable choices.
A government that is a reliable partner for citizens and businesses in the transition to
sustainable economic growth. A government that ensures a reliable financial system.
Of course, a reliable financial system cannot exist without financial stability.
And that is where that other team members enter: the central banks.
Because financial stability is their - our - responsibility. But we can only fulfill that role
with a clear and unambiguous mandate. Independent of political whims.
In all confidence. It is only when we have the trust of our governments and are
independent from politics that we can do what we have to do: ensure financial stability
and confidence in the financial system.
To play our part in building and managing a reliable financial system that ensures a
stable and responsible provision of credit to the real economy, that ensures that citizens
and companies can build their future, in the knowledge and confidence that their money
is safe. In the knowledge, in the confidence, that they can pay their bills without any
problems and that they can get credit to buy a house or start a business. That is our
role in the team.
To play that role best, it is important that we work together with the other team
members. Not only with the government, but also with other central banks, the financial
sector and with the business community.
I am therefore happy to be here now to further strengthen our ties with the Central Bank
of Curaçao and St. Maarten and with your business communities.
I am also happy to be your guest today, because I know that you can and want to play
an important role in the transition to a sustainable economy here on Curaçao.
Your actions make that clear.
For instance, in the financial sector. I start there, because it is the sector I know best.
But also because the financial sector is the hub for bringing savings and investments
together. The hub that ensures that entrepreneurs can do business.
The financial sector can only be a sustainable sector if it it focuses on more than just
large companies. It is a sustainable sector if and when it also finances small and
medium-sized enterprises. The CBCS is working hard to make this possible.
Why is this important? Because this is how the financial sector can become more
diverse and more inclusive, and therefore more sustainable. Another way to make this
happen is by providing basic payment accounts to people who currently do not have
access to banking services. And by empowering those who are less experienced with
financial matters to understand how the system works..
And, if necessary, by promoting digital skills. The CBCS is involved in all of this.
A sustainable financial sector is also a sector that combats money laundering.
It is very promising that a National Risk Assessment has been carried out in Curaçao.
And that Sint Maarten is working hard to make this happen too. This assessment
makes clear what the remaining vulnerabilities are. I hope and expect that these will be
sufficiently addressed before the next review by the Caribbean Financial Action Task
Force later this year.
A sustainable financial sector is also a sector that can withstand setbacks.
For instance by making sure that savings are protected in the event of a bank failure.
We learned from the global financial crisis how important that is for ensuring and
safeguarding trust in the financial system. We learned that without trust there is no
financial system. So it is good news that your Deposit Guarantee System is almost in
place.
But to make real progress towards a sustainable economy, towards a sustainable
future, we have to look at what entrepreneurs can do.
"Soñ'e, dese'e, logr'e (Dream it, wish it, achieve it)"
I am impressed by how quickly the tourism industry in Sint Maarten and Curaçao has
recovered after the pandemic. For Sint Maarten this came in the wake of hurricanes
Irma and Maria in 2017. The speed of the recovery from this devastation has exceeded
expectations.
The tourists are back in force. That is good news, but the success of the tourism sector
also leads to new challenges, of course. Challenges for the environment, because
tourists not only use energy and produce waste, they can also be a threat to
biodiversity. And naturally you want those beaches to stay pearly white and your flora
and fauna breathtaking. Not only because they are a source of revenue, but because
they are your heritage and your home, and because they are too beautiful to neglect.
A good reason to look for diversification. To look for other business opportunities
outside the tourism sector.
Another reason, of course, is that diversification makes your economy less vulnerable.
A vulnerability you experienced during the pandemic.
And diversification can be found in investments in the energy transition, a double step
towards a sustainable future. Curaçao is currently heavily dependent on fossil fuels,
which produce high levels of greenhouse gas emissions. To reduce these emissions, it
is necessary to switch to renewable energy sources such as solar and wind energy, and
energy storage technologies. This transition takes time, money and manpower. It
requires investments and efforts, it requires entrepreneurs with vision and courage.
And the willingness to work together. Because a lightly populated island like Curaçao
cannot make this transition on its own. You need to attract foreign investments and
engage in international collaboration. And that is what you are doing.
A good example of such a collaboration is the memorandum of understanding for the
development of a wind farm in Curaçao that our Climate Minister Rob Jetten signed
here last May. May much more collaboration follow!
Because the path towards a sustainable future goes ' Paso pa paso, dia pa dia' (step by
step, day by day), as you say here.
Central banks can help you take these steps. We can help to shape the transition to
sustainable economic development. We can help ensure that sustainable choices are
not only made, but also successfully encouraged and implemented. As supervisors, for
example, we help the financial sector to identify sustainability risks and encourage
institutions to take action where necessary. We are committed to making payment
transactions more sustainable, including when it comes to the paper and printing
process for the money we issue. And we have an important role and position as an
advisor to politicians and the government, for instance in the debate about a
sustainable economy and the energy transition.
In short: we are part of the team that will bring about a sustainable future.
As are you. Let's take this opportunity to share thoughts and ideas about the way
forward. I know you have a proverb that would be a nice motto for our team:
' Soñ'e, dese'e, logr'e' (Dream it, wish it, achieve it)