Anguilla government to borrow $100 million to maintain its projected rate of expenditure. Did I 
hear right? Did the radio announce that government is going to borrow $100 million from the public by issuing Treasury bonds?
I know it is not a lot of money for some of us. But, for a little island with a fragile economy like the one we have? On top of our present borrowing? I think it is a lot of money for little Anguilla.
It seems to me, ignorant as I am of public financing, that this measure puts Anguillians into more debt. I wonder if Anguillians would support this measure if they were consulted. I doubt so.
I imagine that the government thinking is, well, if it is a 10-year bond, the economy is bound to have rebounded by then, and it will be easy for us to pay it back in 10 years, together with the interest.
But, what if the bond issue is successful and government does nothing to cut back on expenditure? Will it not mean that, unless taxes are increased in a pre-election year which is an unlikely event, more borrowing will be necessary later in the year, and next year as well. So, it starts at 100 million, but what will the total debt end up being?
Who will pay this borrowed money if and when the government cannot pay it back? We who buy the bonds, of course. Repayment of the bonds will then be deferred and the rate of interest altered, as I am informed government has the right to do. Either that, or they will have to increase our rates and taxes to pay it on time.
Would it not be more sensible for government to do what we are all doing at this time? Reduce our expenditure to meet our income.
The last time I looked, Anguilla is not the USA. We cannot influence the economy by borrowing our way out of the hole we are in. My concern is that, more likely, we will be in the bottom of the hole that we are digging for ourselves.
I know the Chief Auditor has not been happy in his last few Audit Reports on the expenditure of the government of Anguilla. Should not the Opposition be doing their job of organising the Public Accounts Committee and checking how various government departments have been spending the public money?
This is a challenging time for us, and I do not think borrowing money to maintain our current life-style is the answer. At least announce some significant reduction of public expenditure at the same time. That would be more reassuring.
100M (EC or US$) means that the borrowing is around $8000 for every man woman & child in anguilla. far less than the US debt - in fact way less.
ReplyDeleteTwo things to think about:
ReplyDeletePay as you go. Have all government finances open to the public, some governments even have all check, etc. posted on the internet.
Follow the money. Look at what brings money to Anguilla and refine how it comes. Maybe encourage retired foreigners to stay long term. Encourage foreigners to bring money and leave it behind. The real economy is selling sunshine. Ask the real economy what they want.
again: Follow the money and what brings it to Anguilla.
If Anguillians are brave enough to subscribe to this government borrowing, the stark economic consequence will be that it will reduce (not increase, as claimed by the government) the liquidity available in the general economy by diverting the moneys subscribed into the government's public spending excesses.
ReplyDeleteEvery day that passes makes Anguilla seem more like a basket case, but there is at least qualified encouragement to be had from the well targeted attacks Her Majesty's (not so loyal) opposition has at last started to mount.
Mr. Mitchell, todays Anguillian newspaper has an article entitild " Social Security being Proactive in challenging Time".
ReplyDeleteThe article quotes the Director, Mr. Timothy Hodge, as saying:
1. the Board lost money on its US Stocks investments. He doesnt say how much was lost. He also doesnt say whether the investments were made throuigh National Bank of Anguilla/Smith Barney and at what cost to the Fund in commissions to NBA and Smith Barney, if any.
2. He says that projected total income for 2008 is $37 million dollars. He doesnt say what the losses were.
3. He says that Benefit expenditure was 7.4 million dollars, and now, for the devastating part, that "..administrative and other expenditure totaled $6.1 million."
He doesnt say what the administrative expendituires were, and what the amounts were, and he doesnt say what the "other" expenditures were and what their amounts were.
4. He says that the reserves were at year's end $208 million dollars!
Now, what can justify "administrative and other expenditures" of Trust Fund monies of $6.1 million dollars?
How can they justify 6.1 million dollars in expenditures when they pay only 7.4 million dollars in benefits to the Beneficiaries of the Fund? Thats a whopping 82% cost of expenditures over Benefits!
How can they justify a reserve of 208 million dollars while paying little or no real benefits to the Contributors who are the Beneficiaries of the Fund? While the same contributors suffer when they are laid off, when the medical bills come up and the like?
How can they justify any of this, and making all kinds of "donations" to all sorts of non - benefit related causes like Queen Shows, while the Beneficiaries suffer?
The Social Security Scheme is a Statutory Trust and the use of its funds, must be in accordance with tyhe broad terms of the Trust, which is the Benefit of the Contributors!
Instead of wasting the Contributors money on the likes of the sponsorships and other " expenditures" they make, the monies should be used to benefit the Contributors. Provide full mediacl and health care to the Contributors out of their money which is boasted as "reserves". It is THEIR money after all, not the Government's, not the Board's, not anyone's other than the Contributors. It MUST be used to benefit THEM!!! Not Clubs, Community organizations, or otherwise.
Mr. Mitchell, as Anguilla's defacto Ombudsman you are obliged to fully investigate the Social Security Scheme in the interests of its Contributors.
I second that motion Mr. Mitchell
ReplyDeleteFOLLOW THE MONEY is good advice. The many expats living in Anguilla full or part time are an important part of the Anguillan economy. These people patronize grocery and beverage stores, restaurants, local shops, gas stations, ferry boats, banks, utilities, and cable services. They purchase insurance, medical and health care products and services, and hire local workers. Difficult to determine exact amount they contribute to the economy but it’s a very sizable sum.
ReplyDeleteAlso, they are honest people who seldom raise their voice or ask for preferential treatment, don’t have children in schools, seldom request law enforcement services, and always willing to contribute and help.
Millions of dollars are spent to attract people to Anguilla and expats are already here. Making it easier for them to deal with immigration and residency issues and bring other like-minded people to Anguilla is indeed, a noble and worthwhile endeavor. .
Too often, we look so hard at the horizon; we fail to see what we have at home. FOLLOW THE MONEY.
Before we look and borrowing an outrageous sum such as this, shouldn't the government do some "belt tightening" like all other countries? Want some ways? (1) start collecting property taxes and rental property service charges from all those who have never paid; (2) enforce dog licenses;(3), cut off water from the 100's who are stealing it, or make them pay - especially apartments; (4) does it REALLY take 4 guys to ride around in the water department pick-up looking for leaks?; (5) finally, why not give 2 unpaid days off per month to government workers? Others are being laid off or having hours cut back - why not the public sector? When the above are done, come back and I'll give you 5 more ways.
ReplyDelete