Anguilla: Sustainable Recovery
and Resilient Development Post Irma
This
is the title of a letter Mr Ben Merrick, the supervisor of all British Overseas
Territories’ Governors, wrote to Anguilla’s Chief Minister on 23 December 2017. In it, he offers us a £60 million
(approximately EC$250 million) reconstruction grant.
This British taxpayers’ money is to help us
build back stronger after the devastation of Hurricane Irma. It is a grant, a gift: we don’t have to pay back a cent of it.
There has been no discussion of this letter
in the public domain that I know about, other than a cursory mention by the
Chief Minister in his January press conference.[1] The letter came to my attention only last
week. It deserves to be publicly
discussed.
Reading it, I gather that they have no
intention of just dropping the money on us.
They have set out a number of conditions we have to meet before they let
us have the first payment. And, we have
to satisfy them at quarterly intervals that we are keeping our promises and
commitments, if we are to continue receiving disbursements.
First, we must agree a revised Medium Term
Economic and Fiscal Reform Programme (MTEFRP);
[2]
Second, we must appoint a Financial Adviser
to sit in ExCo and in the Ministry of Finance;[3] and
Third, we must submit a clear list of the
projects we will spend the money on, with agreed implementation arrangements.
The letter claims that if we can meet the
first condition, we will not just be building back infrastructure, but also
maintaining strong public finances and creating an environment that encourages
business and attracts significant investment.
We already have an MTEFRP. But Hurricane Irma committed euthanasia on
it. It has been put to sleep. That is why we have to agree another
one. Meanwhile, our national debt is well
over EC$400 million and growing (EC$206.53 million in 2015 and EC$419.24
million in 2016.)[4]
The full aid package will
not be handed over in one lump sum. It
will be disbursed in stages, and only if we can show that we are making
progress in implementing the MTEFRP. No
more will we be permitted to submit wonderful sounding promises, take the
money, and then just go back to the old ways of spending it.
The MTEFRP was due by 31
January 2018. In it we had to show (1)
how we would manage our public finances; and (2) how we would progress sustained
economic development.
Anyone who has read the 5-page
certificate to the Chief Auditor’s ‘Audit of Accounts 2013’, published in 2016 on
the Government website, will be aware that we have failed to manage our public
finances.[5] Many departments of government keep no proper
record of where they got their money.
They can’t account for where they spend it, or who they spend it on.
Taxes, duties and levies are
forgiven without authority, and with no record made. The result is that for the past 40 years we
have never had a clean audit.
To get this promised money,
we have to set out in detail the steps we intend to take to achieve a current
account budgetary surplus from 2019 onwards.
In my opinion, it is simply impossible for us to achieve a current
account budgetary surplus from 2019 onwards. Our public debt continues to
increase. I would guess that we won’t
achieve a surplus for decades to come.
Alternatively, we could set out the steps we intend to take from 2019
onwards. But, we would not be able, on
past evidence, to stick to our undertaking.
We can supply, as they
request, an updated public finance projection from 2018-2025. That is not difficult. We are experts at drawing up projections and
writing reports.
They ask us to clearly
identify what actions we will take to manage public spending, and increase the
efficiency of the public service. I
don’t think we can meet this condition. We
permit public servants to arbitrarily reduce assessments, duties and taxes
without any record being kept, or any report being made, as the ‘Financial Administration
and Audit Act’ requires. See the Chief
Auditor’s Certificate.
Next, they want us to take
clear steps to raise revenue through increasing tax compliance rates, reducing
arrears, and extending taxation.
We have to provide a clear
Work Plan for each measure, including actions that need to be taken and target
outputs per quarter.
We must prepare a Risk Register
including mitigating steps to manage future pressures from such things as more hurricanes
in the years to come.
We must provide a Timetable
and a process for reporting on a quarterly basis to ensure the momentum on
reform efforts is maintained.
These are high bars for us
to cross. We long ago decided that we
will never enforce our tax laws if it means, to repeat the memorable words of a
former Chief Minister, “criminalising innocent Anguillians”.
In my opinion, it is
unlikely we can meet these conditions for receiving this money. Unless we change our past ways, we will never
receive one penny of the offered grant.
If we get any of the money, it will most probably be for having
successfully pulled the tam down over their eyes.
Edited
12 March to include (a) in the 3rd paragraph mention of the Chief Minister’s
January press conference; (b) in a footnote to the 5th paragraph, the
preparation and approval of a draft MTEFRP; (c) in a footnote to the 6th
paragraph, the appointment of a Financial Adviser; (d) in a footnote to the
12th paragraph, a link to the Chief Auditor’s Report; and (e) a revision of the
13th paragraph for clarity.
[2] The Minutes of Executive Council for 8 February 2018 reveal
ExCo’s approval of a draft MTEFRP with instructions to the Ministry of Finance
to send it to the FCO for discussion.
This draft has never been publicly mentioned or discussed: http://www.gov.ai/documents/exco/180208%20Mn18-128.pdf
[3] In the Anguillian Newspaper of 26 February, we learned that Mr
Stephen Turnbull was recently appointed the new Financial Adviser: http://theanguillian.com/2018/02/editorial-who-is-guarding-the-guard/
