confident, forwardleaning country and not become hunkered down behind cultural walls. if a problem arises, we do not have to fight the problem but rather, we have to understand the problem and solve it. instead of looking through one end of the telescope, both sides tend to look through the other end at a myriad of little problems. in my opinion, some innovations are necessary in the way we deal with each other in the kingdom to improve the functioning of the new constitutional structure. in this context, it is important to realize that although we are equal partners in the kingdom, we are not similar. the netherlands has a long tradition as a democratic constitutional and welfare state and a much larger population and economy than the caribbean kingdom partners. for example, the combined population of the caribbean kingdom partners is less than 2 % of the population of the netherlands, while the combined economies are less than 1 % in terms of gdp. this asymmetric reality has created a cultural misunderstanding which has led us to an excessively one - directional reliance on holland to solve problems that are deeply rooted and not fully understood. a great deal of time and patience will be required to work out a more balanced relationship. curacao and sint maarten are microstates, but they have to build up and maintain all the institutions necessary to function as a democratic constitutional state. this institution building began only three years ago in sint maarten. curacao has a longer tradition in this area because the former central government was concentrated in willemstad, but it is still struggling to merge the central and island administrations. moreover, the distance between politicians, civil servants, and citizens is much smaller than in the netherlands. these differences imply that the strength of governance can never meet the standards common in the netherlands. however, we have to be mindful of the dangers of exceeding the limits of this argument. recent events have reminded us that self - serving arguments can extract a huge historic price. ladies and gentlemen, we tend to recur too frequently to international law and regulation standards when calling for necessary improvements in the caribbean kingdom partners. however, it is important to remember that domestic moods are driven by where the shoe pinches, and they can be exaggerated by fears and ignorance. therefore, local capacity limitations and differences in culture must be taken into account. i think we can work together in the kingdom in a constructive way that will produce additional benefits for all individual partners and for the kingdom in its entirety. to achieve

– promoting a safe and efficient payments system. a safe and efficient payments system has two parts : the cash system and the noncash system. the role of the central bank in the cash system is to issue and bring into circulation bank notes and coins. innovation plays a major role in the design and composition of bank notes. security features to minimize counterfeiting are constantly evolving. also the materials of which bank notes are made are evolving to prolong durability and, hence, reduce the cost per note. for example, bank notes made of polymers, better known as plastic, instead of paper are gaining ground and were recently introduced in canada. also the processing of used bank notes has become fully automated. we have a sophisticated machine that selects bank notes still fit for circulation and bank notes to be destroyed based on set quality parameters. innovation contributes to new machines that work faster and make fewer errors. the bank is currently evaluating all those new features to include in the long overdue new bank notes. the current paralyses in the decision - making with regard to the new bank notes are causing unnecessary risks to the current system. the noncash payments system comprises cheques, written bank transfers, and all electronic payments such as the use of debit cards, credit cards, and internet banking. the transactions between clients of different banks are cleared daily through the central bank. this process is largely automated through the netherlands antilles clearing system ( nacs ), which all local banks ( including those on the bes islands ) are connected to. the system is updated regularly by adding new functionalities with the aim of a fully automated clearing process. noteworthy is that the local banks have indicated that they want to gradually phase out the use of cheques, which require very costly and labor - intensive processing, and phase in electronic forms of payment. we welcome this development. the central bank also supervises the payment systems at the individual banks to make sure that they meet international standards for security and reliability. ladies and gentlemen, the task of promoting the stability of the currency – the first main task in the central bank - charter – is executed by the central bank ’ s monetary policy. the fixed peg of the netherlands antillean guilder to the us dollar can be maintained only by guaranteeing that sufficient foreign exchange is always available to settle our international payments. our benchmark is foreign exchange reserves sufficient to cover at least 3 months of goods and services imports. this brings me to a simple explanation of the monetary transmission