Fellow Anguillians. In the interest of healing the divisiveness of a long political campaign, and to foster unity among all Anguillians, the Anguilla United Movement had intended to remain quiet and allow the new Anguilla United Front Government time to settle in and get to work, but Tuesday’s address by the Chief Minister, Mr. Victor Banks, shows that he is still speaking campaign rhetoric, relying on myths and half-truths. As leader of the AUM, I have a responsibility to remind people of the facts and therefore I am forced to respond.
While we want to move forward, Mr. Banks continues to perpetuate myths about the economy he left in 2010 and the one he inherited in 2015. The record clearly shows, as presented at a public forum at the Rodney MacArthur Rey Auditorium in 2010, that there was a large deficit of EC$69 million, unpaid invoices of EC$14 million, Bank overdraft of EC$18.5 million and no reserves. In contrast, today Mr. Banks has inherited a surplus of EC$6.64 million and EC$30 million in reserves. Mr. Banks cleverly stated that the economy was at -5.77% in 2010. What he intentionally omitted is that the economy was at -16.8% in February 2010 when the AUM took office, and through prudent fiscal management, it was at -5.77% at the end of 2010. The economy continued to improve reaching positive growth to over +1% in 2015, an over 18% recovery under the AUM administration. He did not point out that while the Tourism sector had decreased by 15% in 2009, as well as the Construction sector by 60% and Mining and Quarrying by 82%, that all these sectors showed positive growth by 2014, with Tourism arrivals at an all-time high and Construction up 40% and Mining and Quarrying up15%.
Mr. Banks correctly stated that the public debt is around EC$200 million, but the only debt attributable to the AUM administration is the EC$10 million borrowed from Social Security in 2010 to pay salaries and EC$8 million from the Caribbean Development Bank for the construction of the Anguilla Community College. All other debt was inherited from the previous AUF administration or incurred to pay invoices and loans accrued by the AUF administration. The debt was converted to a policy-based loan from the Caribbean Development Bank which was obtained at a lower interest rate and required interest-only payments for the first 5 years.
In terms of Capital projects, the AUM was saddled with such a dismal economic platform that austerity measures had to be implemented to stabilize the economy, thus limiting Capital Expenditure. Any other administration would have wilted under this pressure as manifest by the former AUF Chief Minister asking the British to come for their country, after he had declared that Anguilla was bankrupt. Even Mr. Banks, the Minister of Finance was cautioned by the Foreign and Commonwealth Office in January 2010 for his lack of good judgement and poor management of the budget. In spite of these setbacks, the AUM was able to spend EC$28.8 million in Capital projects, including building the Calvin Washington Lake Road, which was an obligation of the AUF, building the Limestone Bay Road, initiating construction of the multi-purpose sport facility in The Valley and renovating the Vivien A. Vanterpool Primary School. Also, the AUM procured funding for several capital projects including Phase 1 reconstruction of the Adrian T. Hazell Primary School, the new airport tower and fire hall, the communication tower at Crocus Hill and the construction of the Anguilla Community College. The Blowing Point Port Facility redevelopment was started by the AUM with commitments from the UK Government and the Caribbean Development Bank. Mr. Banks could have extended an olive branch today but he chose not to acknowledge these accomplishments. He forgot that his former AUF Government had no significant Capital investment from 2008 to 2010 when the economy ground to a halt. We hope that the procured funding is used for the purposes earmarked.
Mr. Banks cannot refute the fact that he met a budgetary surplus so he tried to minimize the importance of balancing the budget, being fiscally prudent, and building reserves. As a long-standing Minister of Finance he should understand that nations cannot survive with wanton spending, exceeding realistic expected revenue, thus mortgaging the country’s future, or without the requisite reserves to fulfill the mandate of good governance imposed by the UK Government. While the AUF spent all the reserves, the AUM was mandated to buildup reserves equal to 90 days of recurrent expenditure. It will be interesting to see how the new administration manages the surplus and the reserves, knowing that the reserves must be maintained. Already there are rumours of a new fleet of vehicles for government ministers and officials. Already there are rumours of requests for over 10 special assistants. Already the AUF spent over US$16,000.00 for a lavish swearing-in ceremony, including a US$1200.00 dinner for the Ministers and their guests.
Mr. Banks talked about people without electricity and rationing of water. This did not start with the AUM. Over 400 households were without electricity before 2010. The AUM being concerned about the number of Anguillians without electricity, held discussions with Anglec to see what assistance plans were available. As a result, Anglec implemented a $1.00 reconnection fee without affected customers having to pay the arrears up front. Anglec initiated an additional assistance program which was funded by Delta Petroleum to reconnect 100 households and pay the first EC$150.00 monthly. As to the water situation, the AUM forgave up to EC$4 million in debt so that people could reconnect to the water supply and receive necessary tax clearances. The GE plant at Crocus Bay was owed several million dollars by the AUF administration and the contract, negotiated by the AUF, did not have a clause stating that the equipment must stay in Anguilla when the company departed or the contract ended. The AUM paid US$1.6 million as a settlement to fulfill the Government’s obligation. We hope that the new administration will honour the new water contract which will provide water at half the cost, and where the equipment will belong to the people of Anguilla at the end of the contract.
As pertains to Cap Juluca, the checks were not cashed on the advice of the Attorney General and private counsel so as not to compromise the government’s legal options. Cap Juluca continues to be a legal issue which started prior to the AUM administration. The AUF has had tremendous challenges with Cap Juluca, and Mr. Banks’ statements can only be seen as grandstanding. In 2004, he tabled a paper in the Executive Council noting the urgency of taking action on Cap Juluca but did nothing. Four years later the AUF declared on the front page of The Anguillian that all of Cap Juluca’s issues were resolved. More political grandstanding! Why is he proposing now that he can fix Cap Juluca?
It is interesting that Mr. Banks gave so much attention to the Boards and replacing directors and members and so little said about the state of the indigenous banks. I would postulate that the banking crisis is the most important issue facing Anguilla right now, and will affect the future commitments of this administration and the lives of all Anguillians. Yet Mr. Banks seemed more concerned about filling the Boards with his appointees, rather than fully addressing the state of the banks. One must ask if his priority for AUF supporters to serve on Boards just political expediency or irresponsible behaviour? Are AUF supporters more qualified, or is this political reward? We can only hope that due diligence prevents placement of individuals as directors and members of the Boards who have proven themselves incapable in the past, resulting in institutional insolvency and/or failure.
Mr. Banks continues to attack the Interim Stabilization Levy as inequitable and unfair. He fails to tell the people that the Levy was imposed by Her Majesty’s Government because of (1) the disastrous economic position he left the country in as the former Minister of Finance, (2) because he left no budget, and (3) Governor Harrison stated that passing the Levy in the House of Assembly was a prerequisite to attaining British assent to the December 2010 budget. The Levy has served the country well allowing the AUM to erase the fiscal deficit, build requisite reserves, and retain all the civil servants. Mr. Banks also fails to tell the people how he will finance the EC$14 million in revenue brought in by the Levy. Maybe he will introduce an income tax, which was proposed by the AUF in their Fiscal and Economic Recovery Plan 2009 – 2011. Maybe he considers that to be a fair tax because it will affect everyone including those making less than EC$2000.00 per month, who are now exempt from paying the Levy. Maybe he will impose the Value Added Tax (VAT) which will be a significant burden to Anguilla, or maybe he will just simply change the name of the Levy and maintain it. Since, the AUF campaigned on early repeal of the Levy upon coming into office, why are they waiting until the end of the year? Maybe, they realize it was not so unfair after all, or maybe talk of repealing the Levy was just one more example of election campaign exuberance, as was stated by Mr. Banks on Talk Anguilla.
What I find extremely telling is that Mr. Banks did not elaborate on the state of NBA and CCB, the indigenous banks. While during the campaign he and the current Minister of Infrastructure stated that they had seen the banking report and it was not that bad, he is now claiming that it is a sensitive issue. What has changed? Where is the nonchalant attitude that they can fix it? After the recent meeting with the ECCB, why couldn’t Mr. Banks assure the people that options such as liquidation, depositor haircuts, forced depositor bailouts or buy-ins, and selling off Anguilla’s best lands are off the table? What did he mean by his statement to protect the rights of all depositors even at a cost to Government? Does that mean obtaining loans to recapitalize the banks, increasing taxes, cutting personal emoluments by reducing the civil service, among other measures? These questions must be asked and answered. Also, it would be prudent, responsible and transparent for Mr. Banks to make available to the public the banking report and the results of the forensic audit commissioned by Her Majesty’s Government.
Unfortunately, Mr. Banks made several references to increased expenditure but failed to show how he will increase revenue, provide jobs or improve the plight of Anguillians. He failed to acknowledge the local and foreign investment projects started during the AUM administration. He did not show concern for the Viceroy staff who were furloughed even though the hotel demonstrated record profits. We hope that his administration will not be a ‘Tax and Spend’ Government, but so far he seems stuck on that side of the equation.
Experts are projecting that economic growth in Anguilla was on track to exceed 5% this year. We hope that the current administration will see it fit to allow this trend to continue and not make changes just to be different. In the end, we are all one in the struggle for a better life for all Anguillians. Meanwhile, Mr. Banks’ address highlighted the need for us to remain vigilant, keep the Government accountable at all times, and speak for those who need representation.
God bless You, and May God continue to Bless Anguilla. Thank you.
Ellis Lorenzo Webster
Leader, Anguilla United Movement
(Published without editing by The Anguilllian newspaper.)
