"ALLOW US TO BORROW, OR WE WILL DI TI OURSELVES," ANGUILLA DELEGATION TELLS BRITISH OFFICIALS

At the end of the discussions in London which involved the Anguilla delegation and the British Government, the cordial relationship remained intact, but there was obviously a considerable amount of frank and strong talk between both sides at the table.

L-R: Chief Minister Osbourne Fleming, Hon. Victor Banks and Hon. Evans Rogers

This was indicated at the Chief Minister’s press conference in Anguilla on Monday this week. The main controversial matter was that the Anguilla Government wanted a relaxation of the British guidelines for its Overseas Territories to enable Anguilla to borrow large sums of money for its public sector investment programme. On the other hand, the British Government expressed opposition to the proposal stating its reluctance to becoming involved in “contingent liabilities” if Anguilla could not repay its loans; and suggested taxation measures instead, a matter the Anguilla delegation was not prepared to discuss, let alone consider.

The delegation returned to Anguilla without receiving any commitment from British Government officials as to what they would do in relation to the island’s economic situation and requests, but with the promise that they would set out their position in a soon-to-come letter.

“A lot of Anguillians felt that we were going to England to ask the British for money, and we made it very clear that we were not going to ask for any money,” Mr. Fleming told reporters. “Anguilla has reached a point in its development whereby it should bear in its own burden. From 2005 to now we have not received one penny from the British Government to help us with Anguilla’s development and we did not intend to ask them for a penny this time.

“What we wanted to ask them was to consider the borrowing guidelines whereby in this [economic] environment we can keep Anguilla afloat. We have not had any direct answer but we are awaiting a letter from them sometime during the course of this week to see exactly what the position is.” Mr. Fleming indicated that if the British Government did not give approval for Anguilla to borrow the money it needed his Government would consider taking the matter to the House of Assembly to authorise the borrowing.

Mr. Banks, in his capacity as Minister of Finance and Economic Development, put the talks in London in greater focus. He said that in advance of the visit the Government had prepared a fiscal economic recovery plan which included issues not only during this period but in 2010 and beyond. The plan also proposed some “stimuli and other initiatives to assist the economy during this very challenging period.” He stated that the talks were very frank with the main focus on creating the flexibility needed to deal with the unusual circumstances resulting from the world-wide recession and that foremost among the issues was the relaxation of the borrowing guidelines.

“For the past four years before 2008, the Government has been in full compliance with the financial corridors which required us to do borrowing without the need to seek the approval of the British Government,” Mr. Banks continued. “That is because we had reserves in place. The debt to revenue ratio was intact as well as debt service to revenue. Where we have fallen down, in recent times, is in terms of a reserve requirement. All the other requirements are in place, but the reserve that is required based on what we have agreed, was not met. As a consequence we require the approval of the British Government in this period.

“We had discussions with the new Minister [for the Overseas Territories] the Honourable Chris Bryant. We both made presentations at that meeting and we also had interventions from our technical staff Dr. Aidan Harrigan and Mr. Foster Rogers. The meetings did not come to a conclusion in terms of the agreements with the British Government and the Government of Anguilla. They indicated that they would respond to us within a couple of days…We made our case very strongly. We indicated to them that this is an unusual period and therefore we need to have unusual measures.

“They were concerned about the ability of the Government of Anguilla to withstand any further debt at this time. We pointed out to them that it was necessary to create economic activity [by incurring] some debt, a debt which was not frivolous but which related to long-term investments which would assist the Anguilla economic recovery over time. In the short term it would also assist in recovery efforts by creating jobs and business opportunities for the people of Anguilla.

“If I were to report fairly on the outcome of those discussions I would say that I was not happy, but that does not mean that at some point in time the argument that we made would not sink in. I am hopeful that they would respond much more favourably than we would have anticipated based on those discussions. They made some very strong statements which we responded to on the basis of the level of vulnerability in our economy, the fact that we depend on tourism; the fact that we do not have a diversified economy; that we are an open economy and therefore it is difficult to anticipate the turnaround in the world economy and to make a determination of how long it would take us to be able to sufficiently meet our commitments based on any borrowing that we undertake.

“We pointed out to them very clearly that the Government of Anguilla has always been resourceful, that because the economy was small any small interjections of investment could create a turnaround; and what we had to rely on was the importance of responding to the issues… They also expressed a concern about the level and the nature of the tax regime. We responded to that very negatively because if it is not appropriate to borrow in these times, it is even less appropriate to increase taxation or implement new tax measures…"

During question time, Mr. Banks made a number of further points as he spoke about the talks in London and the stance taken by the British officials. “We threatened that we would go to the press (the BBC) and say that the only solution they were coming up with was further taxation,” he reported. “The only solution we have is borrowing to generate economic activity so that we could create that bridge when the developed countries recover. We cannot say that the Government of Anguilla has a plan because every plan must involve the developed countries…The continued contingent liability that the British Government has is what it is. It will always be there because if we have a natural disaster, they will have to help. If we have an economic disaster they will have to help as well.” He said the British officials asked the delegation not to go to the press and not to send a strong letter to the Minister and stated that they would send a letter first to let us know what the position is.

“As the Chief Minister has just expressed, we have a course of action which we will take if we are not happy with what the response is,” he emphasised. He hinted that independence was one of the matters which the delegation made reference to as an alternative. “At the end of the day the British Government is not doing anything for us financially and economically, so why is it that we have to come with begging bowl asking for flexibility?” he went on. “We are very grateful for the relationship we have with the British Government. We believe that relationship is the best of both worlds. It has its benefits. Finance is not the only benefit it has. The fact that we are a British Overseas Territory creates the perception that we are in a stable environment and that we are well regulated. It assists us in all the investments that we undertake and it creates a better investment climate for us…so there are positives. But by the end of the day if we are going to starve and suffer in any way, and are not going to get a positive response from the British Government… to give us the approvals based on a constitutional relationship to get things going… and they are not coming up with any other solution…, then we have got to take some action.”
Chief Minister Fleming noted that at one of the meetings he commented that he was going back home. He said Anguilla was not advocating independence at this time, but the island had been surviving on its own for a long time, and he took exception to “be begging for the right to borrow money.” He added that the British officials were talking about contingent liabilities “when they never had to pay a bill for us.”

Other Matters
Other matters which came up in the press conference included a further report by Mr. Banks about the work of the delegation. He said the Chief Minister had signed a tax information exchange agreement with the Minister for the Overseas Territories. He, Banks, signed two: one with the Netherlands and Ireland. Other agreements were in the works with Canada, Germany and seven other Scandinavian countries and all of them were in connection with Anguilla being a developing financial centre. He explained that over the past four weeks a team comprising Carl Harrigan, Serena Connor and Lorna Smith, an Anguillian national with a consultancy company in Tortola, had been negotiating with various international governments on the signing of the agreements.

On another matter, Mr. Banks said Dr. Harrigan and Mr. Rogers had travelled to Brussels for discussions with European Union officials and that agreement had been reached for the release of 24 million dollars by December and due to Anguilla under the EDF 9 agreement. A further 45 million dollars is expected later under EDF 10.
In London, Harrigan and Rogers also had discussions on the Sombrero Lighthouse Station, air transport agreements relating to aircraft operations from Anguilla to other Caribbean destinations as well as various maritime transportation matters.

The Chief Minister and the Minister of Finance were joined at the press conference by the Minister of Social Development, Evans Rogers. On the home front Mr. Rogers expressed delight and support for a number of social summer activities which were organised for the youth by a number of groups and individuals. He also commented on the only known case of swine flu in Anguilla and noted that the affected young man was responding to treatment and that there were supplies of tamiflu available to treat other cases which may develop.

All three Ministers joined in wishing the Elected Member for Road North, Edison Baird, a speedy recovery from injuries sustained in a road accident in June. He returned to Anguilla on Sunday, July 26, from St. Thomas where he had been receiving treatment. He was welcomed at Wallblake Airport by the Chief Minister and a number of other persons.

The three Ministers expressed the hope that the Summer Festival, commencing this week, would be incident-free and an enjoyable experience for all. The Chief Minister extended a warm welcome to all visitors including returning Anguillians. He also took the opportunity to express his pleasure of meeting with the Anguillian community in Slough and for the warm interaction which the delegation enjoyed with the nationals while in England.

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