Saturday, 4 February 2012
This weekend, yet another time we suffered anxious moments as we heard the report that a group of our hardworking and courageous fishermen were missing at sea. It is the kind of report that we all dread. As an island surrounded by the sea it has been the source of our livelihood over the centuries but it has also caused us much pain and loss. There will always be fishermen, sailors, and other lovers of the enchanting waters around Anguilla --- so we have come to expect anxiety and sadness from time to time. My good friends Claude Richardson and Cecil “Kitto” Edwards with young George Romney left our shores to ply their trade and met with misfortune at the hands of the very ocean that was their regular provider. We commiserate with the family and friends of Cecil “Kitto” Edwards who did not make it through the ordeal --- and we rejoice with the family and friends of Claude and George to whom God’s providence granted safe return. We are grateful to all those who took part in the search effort and their eventual rescue. And may “Kitto’s” soul rest in peace!
There was also some good economic news over the weekend. For many creditors, suppliers, contractors, sub-contractors and other individuals who have been waiting patiently since the closure of the Flag Project for some relief on the monies owed to them --- Mr. Lee Rizzuto, the new owner, came through. In this regard he has been a “man of his word” and despite the setbacks and the breakdowns of negotiations, since he won the property in auction several months ago --- he has indeed delivered. I would like to personally thank Mr. Rizzuto through this medium for his generosity to the people of Anguilla. As we all must know by now --- he did not have to do it. This is the kind of outcome that all Governments would hope for in such situations, and this Government can take credit for seeing it through. The unfortunate fact is that whenever a Government is involved in trying to do something right which involves compensation/money --- rather than being thanked for its efforts it may encounter a number of dissatisfied recipients who believe that they did not receive enough as well as a number of disgruntled spectators who believe that someone got too much. It is a situation that many of us in the AUF Government have learned well from our experience with the Airport Expansion Project. However, I am happy to know that a number of Anguillians have finally received some well needed relief.
It was brought to my attention by one of my friendly “blog monitors” that someone maliciously included my name and that of our Party Chairman, Mr. Fritz Smith as recipients of payments from the Flag Project. This was seen on the “Anguilla Transparency” Blog. I am not sure of the motive but I can assure you that neither one of us were on the list for or recipients of payments from Flag. Were I to hazard a guess I would suggest that this is a way of implying that this scheme even benefitted top members of the Opposition Party. This is just another AUM propaganda posting to mislead Anguillians.
Speaking about misleading Anguillians, I have listened to a number of AUM Ministers, advisors, supporters and commentators use a number of financial terms and statements in a manner that is less than honest in an effort to perpetrate their lies and half truths about the state of the economy when they came to Office as well as now that they are in Office. I therefore decided that I have to “clear the air” because I continue to hear this group speaking with authority on the various talk shows using these false statements and misinformation as if they are truth and facts. The most recent such statement being that now Anguilla has no debt. Let me highlight some of these fallacious statements and comment on them as follows:
1.) The AUM Commentators continue to say that when they came to Office they met no money in the Treasury. The truth is that Government money is not stored in the Treasury --- it is deposited in the Bank. The importance of making this clarification is that, believe it or not, there are persons who believe that the members of the past Government took the money out of the Treasury when they left office. And still others who believe that all the money to run Anguilla is sitting in the Treasury in cash at the beginning of the year. They therefore readily believe that that money was stolen. It is what they are maliciously led to believe.
2.) The AUM Commentators continue to say that they met a deficit of approximately 70 million EC dollars, which they reduced in a few months to 20 million EC dollars. The truth is that the deficit that they are referring is the difference between the actual revenue collected by Government in 2009 and the actual money spent. It is a deficit on paper! Because the additional money spent in 2009 came from three sources, namely, the 40 million dollars in reserves that the Government had saved in the good years; the monies amounting to some 24 million dollars due to Government from the European Development Fund which we had spent on their behalf; and short term advances from local banks and the ECCB. So in February 16, 2010 when the AUM came to office the only surplus they met outside of the overdraft facility was EC$511,081.08. This is from the numbers in the Financial Position, which they presented at the Rodney McArthur Rey Auditorium in March 2010. The last portion of the deficit that was not financed at the end of 2009 was less than EC$ 9 million. That deficit did not affect the performance of the new Government. What affected their performance was that revenue continued to fall short of expenditure on a monthly basis such that a deficit situation continued throughout the entire year. They did not reduce a deficit of EC$70 million in 2010 and they did not meet any such deficit that required their attention.
3.) The Chief Minister and some of his Ministers who simply regurgitate his flawed statements continue to say that the past Minister of Finance believes in “deficit financing”. The definition of “deficit financing” that he appears to be using is: “deliberately spending more money than we expect to earn in revenue”. The fact is that the only deficit budget that was ever brought to the Anguilla House of Assembly since the mid 1980’s when the British Government took Anguilla off of “grant-aid” was in 2010 by Mr. Hughes himself. However, if Mr. Hughes means that “deficit financing” is borrowing for Capital Projects, then he needs to understand that this is the only way that the Government of Anguilla has been able to achieve any major development since the British Government stopped providing grants for infrastructure development. The AUF Government would not have been able to provide over 300 million dollars in capital development if we only spent the revenue we received in a given year. This is not “deficit financing” in the normal usage of the term --- this is long-term borrowing for critical development issues. Many Anguillians would not have a home if they did not borrow for amounts greater than their net earnings. Many of us are not as fortunate as Mr. Hughes who never borrowed from a bank. Neither is the Government of Anguilla.
4.) The Chief Minister also boasts that he managed the finances of Anguilla so well in the last seven months of 1999 when I resigned as Minister of Finance that he left the incoming Government in February 2000 a healthy surplus. The truth is the healthy surplus in 1999 had absolutely nothing to do with Chief Minister Hughes’s fiscal prudence it came as a result of the “bump” in revenue collections from the Transshipment. A project for which I was mainly responsible. In fact the year before when I was Minister of Finance the surplus was two and a half times higher than in 1999 and every year preceding that we had a surplus even in 1995, the year of Hurricane Luis. Therefore to boast that he left the Government of 2000 a healthy surplus because of his skill as a Finance Minister is really not the truth. The truth is that, prior to 2010, the longest time Mr. Hughes served as Finance Minister was eleven months in 1984-85.
5.) Some AUM supporters have been saying that I wrote off certain bills owed to Government by persons in the community. The idea is that in my official capacity I have written off moneys owed to Government by specific persons. The truth is that as Minister of Finance I cannot write off any bills owed to Government. This must be done by Executive Council upon the advice of the Treasury and technical Officers in the Ministry of Finance. Another important point is that writing off a bill does not cancel the debt. The Government can still collect the funds owed. Such an act of “writing off” is often advised by the External Auditors in their Audit report. No Minister of Finance has such powers.
6.) The Chief Minister and other AUM “parrots” continue to repeat that the past Government breached the borrowing guidelines in a manner that would suggest that a crime has been committed. In fact I heard a caller to one of the Talk Shows declare with a semblance of authority that the past Government should have been dismissed by the British Government for breaching the Borrowing Guidelines. “Poor soul” was not aware that as he was speaking this Government is also in breach of the borrowing guidelines. The truth is “breaching the borrowing guidelines” simply means that one of the levels of gross debt, repayment or reserves, which we agreed with the British Government has been surpassed. In the case of the past Government because we were forced to use up our reserves we were automatically in breach. That means that based on our agreement, we were not allowed to borrow without seeking the approval of the British Government. It is not a crime it is a financial situation. The present Government is also in breach of the borrowing guidelines that is why any time they need to borrow they must ask the Secretary of State. Until we regain the level of our reserves; the level of our overall debt as compared to revenue; and the level of our overall annual debt repayment as it relates to revenue or change the present guidelines we will remain in breach.
7.) The Chief Minister and his colleagues when they speak about the budget being balanced have somehow planted the idea in the minds of some of their supporters that Anguilla is out of debt. The Chief Minister did a great job of giving the impression that Anguilla had the highest debt levels in the OECS when he came into Government. The truth is Anguilla had the lowest debt levels in the OECS, excluding Montserrat that receives grant from the UK. The figures from their own forum in March 2010 show that by subtracting the EC$10 million they borrowed from Social Security upon coming to Office, they met a total debt of EC$162 million. This was debt ranging back to the early 1990’s and included loans for the Airport Expansion Project; Port Development; Road Development, etc. Even if one would suggest that this represents loans by the past Government over ten years it still represents an average of EC$1.6 million a year. But the truth of the matter is that the present Government has a total debt of EC$ 234 million. This represents an additional debt of EC$72 million in less than two years, that is, EC$36 million per year. While this may be considered unfair analysis, given the dynamics of debt and the need to borrow at this time, it is not any more unfair than the manner in which the Chief Minister and his colleagues have tried to denigrate the past Government for its overall debt over a ten year period. The present Government has increased the debt burden that they met by 44% in less than two years. The Chief Minister used the term piling up massive debts to describe the tenure of the past Government. But in his short sojourn in office he has contributed significantly to increasing that burden. Anguillians need to know that the debt amount has not gone away it has gotten larger. No wonder the main reason AUM supporters give for seeking Independence is to be able to borrow without having to worry about the British and their guidelines.
I have taken the time to respond to these issues because the more I listen to supporters of the AUM the more I get the feeling that they really believe the fallacious statements; misleading comments and outright lies coming from The Chief Minister and his colleagues. But these are not exhaustive. There are many more examples and there is certainly no doubt in my mind that they are deliberately breaching the honesty guidelines of responsible leadership. And I consider that to be a serious crime against a people who were promised good governance!
Victor F. BanksVictor Banks is a former Finance, Economics, Commerce and Tourism Minister on Anguilla. He is presently the leader of the OpositionAnguilla United Front Party, writer and author of a weekly political article for theAnguillian News Paper, lyricist, and a self-employed entrepreneur.
Posted by Realist Spikenice at 21:56