13 August, 2009


FCO Turns Down Anguilla Request to Extend Borrowing Limits. Well, we all heard Minister Banks speaking at the Chief Minister’s Weekly Press Conference this week. I cannot pretend to quote him exactly. However, he tells us in essence that the British turned down his plea to permit us to borrow more money. His proposal was that we be permitted to borrow a large amount of money to take us through the present recession.

We recall that just a couple of months ago the government persuaded the House of Assembly to approve issuing some $200 million in bonds. It was not so difficult to persuade the House. After all, of the 11 voting members of the House, only 2 are in Opposition. The British would be well aware of how farcical such an approval is.

Then our brilliant leaders discovered they needed Auntie’s approval to make the borrowing that had just been approved. So, off they went to London, expecting it would be a breeze. After all, everybody knows what good businessmen they are. How could anyone in London doubt the seriousness of their proposal? Especially when there are general elections due in six months’ time. Surely the politicians in London would understand the exigencies of the situation?

Well, there was just one question. How are you going to pay back the money you plan to borrow? You are not going to leave it to the British taxpayer to bail you out, are you? Oh, you have no plan! A hurricane may strike next month and set all your plans aside? Is that any reason not to have a plan for paying back the borrowing? Do you go to a bank to borrow and not come with a business plan showing how you expect to be able to repay? Is getting permission to increase borrowing any different? Of course it is not!

And, Hubert is so right. Government has just given away one of its main sources of revenue. And, apparently, to people who were not even asking for the gift. First, they announced that they were going to bail out Flag Luxury Resort by taking over the white elephant golf course in exchange for all the bed tax and aliens landholding revenue from that real estate development project. For the next thirty years! Then they announced that they will severely cut the taxes for Viceroy. Then, they will severely cut the taxes on real estate transactions with all foreigners until further notice.

Anguilla made its reputation as a destination of choice through its little up-market boutique resorts. We risked destroying that market by permitting mega-resorts like Flag and Viceroy. We said we were doing it for two reasons. One was we needed major new employers for our burgeoning population of school-leavers who were entering the work force. Secondly, we needed the revenue that the sales would produce. To hell with boutique and with up-market. It is a question of jobs.

Well, we permitted Flag and Viceroy to import massive amounts of cheap Asian ‘slave’ labour, resulting in minimal local employment. Then, we astonished them by gifting them with the opportunity to unload their over-priced units free of all sales taxes. Our explanation? We thought it was an excellent initiative to stimulate the economy!

No income. No ability to pay back borrowings. No way.


    4:20am Friday 17th July 2009

    A "credible plan" must be set out by the Government for reducing public debt more quickly than currently planned when Britain starts to emerge from the recession, the International Monetary Fund (IMF) said.

    In its annual assessment of the UK economy, the IMF warned recovery would be "subdued and gradual" and "hinges on the trust of the public in the solvency of the government".

    "The authorities need to commit to a credible plan to reverse the deterioration of the fiscal position in the medium term and build a broad public consensus around a concrete consolidation plan," it said.

    "The focus should be on putting public debt on a firmly downward path faster than envisaged in the 2009 Budget. The credibility of such plans would be enhanced by clarifying early the specific measures needed to achieve the adjustment, including in the context of the next Comprehensive Spending Review."

    Prime Minister Gordon Brown, who has been accused by the Tories of misleading voters over the need for public spending cuts, on Thursday admitted the Government faced "tough choices".
    But he denied plans were being made for deep cuts, apparently putting him at odds with the country's top civil servant and Business Secretary Lord Mandelson, and suggested there was little prospect of a spending review soon.

    The IMF warned that the speed and strength of the recovery remained "highly uncertain" and that there were "sizeable" underlying vulnerabilities.

    Despite massive taxpayer-funded bail-outs and plans for reform, "the financial system may not yet be repaired to a level where banks are ready to increase lending sufficiently to underpin a strong recovery". And the post-crisis increase in net borrowing was projected to result in a doubling of gross general government debt over the next five years to about 99% of GDP, it added.

    COMMENT: (sarcasm intended)
    Chris Bryant is only parroting what the IMF told Great Britain. He did not even have to come up with an original line for Little Anguilla!


  2. Don,
    these are all semantic games.If the government of Anguilla can get a lender to agree to lend money to the government WITHOUT the British guarantee of repayment, then it can borrow the money anyhow.Efverything else is just political posturing for the benefit of the easily influenced.It makes the politicos look good for raising their crest and taunting independence,which the British would grant immediately to get rid of the embarassing media coverage of how they have neglected to support their colonies during the past 100 years.We should be granted the same amount of UK financing that a 15,000 person city in the UK gets for roads,education,security etc. instead they have gotten by for years with pittances.Where are the funds that we could use to de-colonise?If they were to give us
    US$1 Billion to build a proper infrastructure then we could go indipendant.Not until then.
    Pressure for financial aid should be levyed by using the media.Lets get the BBC here to do a series of reports on how little aid Anguilla gets from "mother" or "Auntie".It is disgraceful.For the last 20 years Anguilla has managed to make ends meet without imposing income taxes on people who bareley make a living off their wages. How much of a percentage of GDP are our customs duties?Don't they compare as a percentage of government revenue to the UK system of income tak?Per ca[pita?It would be great to see a comparison.

  3. Annoyed, good response but the fact still remains that if you intend to borrow money one of the first things you need is a means of paying back the money or in other words a credible plan of paying back the money. And that goes for any government whether it be a British, Anguillian or a Timbuktu government. If such was not the case anyone could go to a bank and get a loan.

  4. 15,000 people in the UK would have paid lots of taxes to the UK and so deserve to have the UK spend some money on them. We do not pay taxes to the UK now and I hope we never do. That we get any money while paying no taxes is a good deal.

  5. So, there is speculation in the news now that NBA and CCB are going to merge.

    The bubble collapse is an obvious cause, but does the loan refusal also have something to do with it?

    Kinda makes ya reconsider the financial monoculture that is modern Anguilla, versus the, um, diversity, of the past...


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