Letter To Sheridan Smith

You strike a most appreciative chord with me when you essentially highlight the virtues of “small” over “big”. You have most eloquently described the benefits to Anguilla of the some 750 private home owners, of which I am one, over the disadvantages of some of the larger projects pursued by an earlier government. However, the larger projects were permitted and encouraged during a period of global economic boom. Had they not been mismanaged, nor experienced the economic downturn, and turned out be successful as contemplated, your criticisms of them may have become invalid, and the earlier government’s decisions to support them, vindicated.

1. It is my contention that the revenues from issuing permits and charging annual fees to the “Provisional Residents”, definitely a more desirable term than a Alien Land Holding Licensee, may only add a few thousand dollars a year. Say there are an average of 5 Provisional Residents per home, in 500 of the 750 private homes, and an annual fee of say USD$50 is charged per person for the proposed ID card, akin to a Driver’s License fee. This would result in an addition of USD$125,000 per year to GOA’s revenues, not quite the high amount anticipated by you. There would also be some expense associated with the issuance and monitoring of the ID cards. Also, the Provisional Residents may resent this fee, considering that they paid a 17 1/2% Alien Land Holding tax to the government on the purchase of their land.

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2. The $2 billion EC stock of saleable property on the island is not selling because of the general absence of buyers, determined primarily by their current financial conditions and the possible lack of comfort and confidence in future economic forecasts in their present countries of residence. Reducing the Land Holding fee to 6% is unlikely to significantly boost sales and provide the expected fee of $120 million EC. While potential buyers would welcome a reduction in the fee, they are unlikely to be hugely influenced in their decision to buy, because of a lower fee. There are a lot more, other important and contributing factors, influencing their decisions to invest in a second home in Anguilla.

In the current environment, I think an effort by the government to improve its revenues and decrease its expenses from less traditional sources should become the focus. This may ease the burden on the people, that unfortunately cannot be completely erased in the near term. I believe an increase in agricultural and fishing activity could benefit Anguilla in a more effective and sustainable manner.

Five to ten acre government-owned plots of land could be leased out to potential farmers at very nominal costs, to encourage farming to produce fruits, vegetables, crops, and even flowers for domestic consumption and eventual export. I am given to believe that fresh produce imports to Anguilla are in the region of around USD$8-10 million annually. Reducing this by just $1MM each year for the first 3 years and progressively by higher amounts in subsequent years could possibly lower the imports to half their current value in 5 to 7 years – a steady annual saving of $5MM per year after say 7 to 10 years.

All the ingredients for agricultural success on the island are there. The land is fertile, there is enough rain, and the people are generally hard working. Every time I buy tomatoes from Frankie’s or visit Rainbow farms, I get convinced that there is potential in Anguilla for more similar successes. Just 50 farms, generating some $20,000 of produce annually, net of costs, would provide the initial $1.0MM annual import reduction. The government’s loss of duties of around $200,000 on the imports would be well offset by the net gain of $800,000 to the island from reduced imports.

Large scale fishing opportunities, exclusively for export, in collaboration with international companies in that business, may represent opportunities to create revenues that are non existent currently. The right studies, analyses, and choice of prospective international companies should be conducted to investigate the potential this opportunity presents. Any such ventures will have to ensure that the local fishing efforts remain unaffected and are allowed to grow at their current pace.

I am sure there are many other creative ways for the government to pursue avenues for increased revenues and lowering expenses. Hopes of a global recovery remain quite grim for the next few years and Anguilla’s problems will need local and innovative initiatives from people like yourselves. There are no quick fixes and we must accept an attitude of “no pain, no gain” as we work towards find longer term solutions.

Sincerely,
An Anguillian Resident.