04 February, 2010

Borrowing still

Did Anguilla really need to make this borrowing?  There is an interesting question and answer exchange in the House of Lords concerning Anguilla in this morning’s sitting.  Lord Jones of Cheltenham, a Liberal Democrat peer, had posed the following written question to the British Labour Government:
To ask Her Majesty's Government why the Government of Anguilla have not received their European Development Fund tranche 3 payment, due by 31 December 2009; and what steps they are taking to ensure it is paid.
Baroness Kinnock of Holyhead, a Labour peer, responded:
The European Commission has authorised the disbursement of funds for Anguilla's third tranche of budget support under European Development Fund (EDF) 9 for €2.31 million. Anguilla should receive the funds shortly. There is no set timetable for the disbursement of EDF. Overseas Territories can request disbursement of each tranche of funding once they have implemented the conditions set out in the financing agreement between the European Commission and the territory. Although Anguilla's original request was sent in April 2009, the Commission did not receive all the associated paperwork from Anguilla until early January 2010.

The Minister for the Overseas Territories wrote to the Commission in July 2009 noting the delays in the disbursement of funds under EDF and urging the Commission to expedite their assessment of funding requests. Officials remain in regular touch with the Commission about the disbursement of funds.
Personally, I find this response very revealing.  It would appear that we had applied for this third tranche of €2.31 million in April 2009.  That is nearly a year ago.  It then appears that we failed to complete the associated paperwork until early January of this year! 
That extraordinary delay suggests to me that there is perhaps nothing urgent about this borrowing.  However, I did a search of The Anguillian to see if there was a recent reference to an EDF loan.  I came across an article in the issue of 14 September last.  It appears to explain what this loan is all about.  It reads in part:
Perin Bradley, Trade and Investment Officer, who spoke on the Government’s financial options on Friday, said the loan of 49 million dollars which was being sought, was intended to pay the Government’s overdraft of 20 million dollars, take care of some other debts, top up the reserve fund and pay outstanding loans owed to CCB and NBA to the tune of 7.4 million. He said a 20 million dollar loan from the Eastern Caribbean Financial Holdings would be used to finance the required safety end at the airport and the balance of 24 million, from the European Development Fund, would go towards the Government’s reserves.
The article does not explain which institution is granting us a loan of EC$49 million.  However, it is clear that the EDF loan is intended to go towards the Government’s reserves.  That is very vague, so vague as to be meaningless to a mere layman like me.
There is an interesting little side play here.  A British Liberal Democrat peer living in England is not likely to have such familiarity with Anguilla’s financial affairs to be able to ask such a question on his own initiative.  I surmise that some Anguillian politician who has become acquainted with Lord Jones prevailed on him to ask the question in an attempt to embarrass the Europeans into hurrying up the funding.  The reply of the Labour Peeress ensured, ever so politely, that the embarrassment fell squarely where it belonged: on the Anguilla Ministry of Finance which had apparently failed to send off the required paperwork to comply with the EDF requirements for disbursement.
Are you, look a wuk!


  1. A December 2008 report on EU relations with Anguilla [http://ec.europa.eu/development/geographical/regionscountries/countries/country_profile.cfm?cid=ai&type=short&lng=en] suggests that the loan is to do with the airport expansion project.

    The part of the report in question states that, “The initial 9th EDF allocation to Anguilla amounted to € 8 million. Adding the transfers from previous EDFs, the indicative territorial allocation amounts to € 8.29 million. The total amount of € 8.29 million is granted to Anguilla as sector budgetary support to infrastructure, and in particular air transport. The entire initial allocation has already been committed. Following the 9th EDF Mid-Term Review, the initial allocation has been increased with 3 M€, for an extension of the existing budget support programme (resulting in a total of 11.29 M€).”

  2. I agree with the first poster above.

    In a government press release issued in 2006
    http://tinyurl.com/yers7ry we find some details on part of the financing for the Wallblake Airport Expansion Project, known as "WAEP" by those admitted to the Inner Circle:

    "One year and nine months after the completion of Wallblake Airport Expansion Project, the Financing Agreement, which paves the way for European Union assistance to Anguilla’s Medium Term Air Transport Sector Plan, covering the period 2004 to 2008, was officially signed by the Territorial Authorizing Officer for Anguilla and Permanent Secretary, FEDICT Dr Aidan Harrigan. This is a process that started in 2003 when the Single Programming Document was drafted and submitted to the European Commission. This now clears the way for the release of 3.5 million Euros as Budgetary Support for Anguilla. This is the first tranche of an allocation of 8.0 million Euros for Anguilla earmarked for the Air Transport Sector. A further 1.0 million euros from in unutilized funds from the EDF 8 programme is also available to Anguilla.

    "Over EC$50 million was estimated to have been spent on the Wallblake Airport Expansion Project. Out of this amount EC$40.5 million was borrowed from Scotiabank for the project. The funds received from the European Union will be used to repay the short term loan of $27 million due to be fully repaid in 2008."

    Although we are a year or two late, I believe this is the EDF money Don refers to. In our fine tradition of blaming foreigners for everything that besets any Anguilla ruling party, we blame the late payment on the EDF. At the CM's weekly press conference a year or two ago (undated): http://tinyurl.com/y9dy7uc
    Victor complained about late payment by the EDF:

    "Mr. Banks said that Anguilla was part of the European Fund EDF 9 and that the delegation was concerned that three disbursements of the funds to the island had been very late. According to him, the funds total EC$25 million at the present exchange rate."

    At the recent Consultative Council meeting in London, several Overseas Territory leaders complained to Chris Bryant about the time it takes to collect funds from the EDF once the funds are committed. As Bryant answers in the House for the FCO Overseas Territories Ministry, perhaps he felt it inappropriate to ask this Parliamentary Question and asked his friend Lord Jones to do so in the Lords. Helping colleagues carry their bucket of shit is common in Parliament.

    10 years ago last week, Lord Jones of Cheltenham and his assistant were attacked by a deranged constituent using a samurai sword. The loyal assistant was killed trying to protect his Lord, for which act he was awarded, posthoumously, the George Medal. Lord Jones was seriously injured. Please forgive him if he's been a mite goosey of late.


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