Tuesday, 31 May 2011
The 44th year of the Anguilla revolution quickly approaches. It finds Anguilla at a critical point in its development. The crisis is a mountain of debt, political ineptitude and a general lack of political vision or will. The problems surround every aspect of life on the island and they will not be solved by playing the blame game although it is important for the people to know the root of the problems. There are tough decisions that need to be made and making them at the moment is akin to political suicide especially in light of the myriad of promises made to the electorate over the years. I am sure the AUM administration realizes this and the AUF realized it and that is why they avoided making the tough decisions before the election. The abdication of the previous government to make the tough financial decisions when the economy first took a down turn was a shrewd political move but it has created a financial disaster. The criticism of the AUM and its promise to fix the economy within a short time of taking office was also a shrewd campaign promise but a promise that will undoubtedly damage its political credibility. The AUM has also spent way to much time fighting with the clueless and uncaring British.
The fact of the matter is that the size of the government is not in tune with the islands economic reality. The cuts in pay for the civil service only affects moral it does little address the financial situation. The size of the Government and its services needs to be reduced as quickly as possible. The politicians know it is political suicide and they are likely to resist it, with promises while praying that the economy quickly turns around. The economy will not turn around unless the burden of government is reduced to a manageable size. The size of government affects the level of taxation that individuals are expected to pay and it affects the participation of businesses within the economy. It is political suicide to cut the workforce and increase joblessness in the middle of the worst recession in history but it is necessary if Anguilla is going to recover. It is political suicide because the local businesses are so shaken by the recession that they will be unable to create sufficient jobs to fill the gaps created by a mass reduction in government jobs. It is political since based on the current global recession as the island is unlikely to find a worthwhile large project. It is also political suicide and national suicide to maintain the status quo. Over the years the Government has reduced the number of services it offers through a process of privatization and the creation of statutory bodies, yet despite these fancy accounting gimmicks the size of the civil service continued to grow. The current state of the economy demand not only the reversal of this trend, it demands an end to the practice of political patronage that fuels the growth of the civil service. I highly doubt that the AUM political style of popular politics will have the required backbone to tackle the problem just as the previous administration use of smoke and mirrors caused the problem at a time when the economy was in better shape financially.
The problem with Anguilla’s model of development is that is based on perpetual quest of finding the next big project or the alienation of land. Successive politicians have done little to create a sustainable economy. The politicians over the years even those who consider themselves brilliant economic managers failed to create the links of sustainability. The government borrowed heavily to fund projects that are not profitable. The road to hell is not only paved with good intentions it is paved by people are nothing less than earnest incompetents.
The cost of doing business in Anguilla is too high and it needs to be quickly reduced however it’s difficult to reduce costs when the government is bloated. Anguilla is currently living in an economic bubble and the cost of its debt is likely hinder future economic growth. Looking at the current situation Anguillians can be thankful that monetary policy is made by an independent policy. If our government was responsible for making monetary policy there is a strong chance that the policies, lack of vision and the level of debt would have seriously devalued the currency and created hyper inflation.
The challenges facing Anguilla is unlikely to disappear anytime in the near future as the situation in the rest of the world will either remain the same or get worst. The first world countries including Britain and the USA are currently living in a state of denial and their policy fixes are either delaying or postponing the inevitable. Anguilla needs to quickly examine both its financial hemorrhage.
The difficult choices facing Anguilla will out last all of the current politicians, yet the danger is that neither Hubert nor Victor is capable of solving the problems. Their economic policies and world view is seriously flawed. When the economic flaws is merged with political considerations it is easy to understand that Hubert will not act unless he can cast all the blame and negatives consequences of his actions on the previous government and Victor wont act because it will require him to accept responsibility for past AUF failures. The burden of moving the economy forward therefore rest with the people.
The problem is not the British or the ability to show a penny, it’s the realization that if you carelessly step on a hoe, the handle will hit you in the face.
By: Statchel Warner
Posted by Realist Spikenice at 17:46