I was a bit disappointed when I heard a part of the debate in the Anguilla House of Assembly, on Tuesday February 9, 2021, when Premier Webster seemed to be using the Banking Resolution as the reason for the implementation of several financial measures that he was presenting at the time. In fact, he suggested that the EC$348 million debt commitment by the Government of Anguilla, for the resolution, could have been better spent in other sectors – and as a consequence there would be no need for the tax measures that, as leader of Government business, he was guiding through the House.
My disappointment was triggered by two possible reasons for this statement. Either the Premier does not understand the Banking Resolution that was implemented, or that he was being shamelessly political and intellectually dishonest. In any event, he was touching on what I consider to be a major accomplishment of our Anguilla United Front Government that we will not allow to be used as a scapegoat for any unpopular policies or programmes of this or any other Government.
At the same meeting, I noted that some other members of the House used that opportunity, as well, to express their discomfort with comments made on the “Just the Facts” talk show by two of their colleagues in the House of Assembly relating to the Banking Resolution. As a result they sent out what is colloquially known as “lawyer letters ” to these colleagues.
It is obvious that – based on the statements made by this Government in their political campaign — the Banking issue will continue to plague them from time to time. On the one hand they will use it as a scapegoat for their own shortcomings, and on the other they will seek to escape any association with the failure of the Bank in the first place.
On July 4, 2020 in my remarks at our “Thank You! Rally”, outside the Landsome Bowl, I made the following statement:
“The New APM Government needs to be given the time to prove that they can deliver on their promise of positive change and our party must give them every opportunity to do so.
“…… But having said that, while we will be allowing the Government a honeymoon period, there are a number of matters that we will be monitoring very closely to ensure they are handled in the best interest of the people of Anguilla.”
Among the matters I clearly listed on that occasion that I regarded as my “line in the sand”, was the Banking Issue. As a consequence I feel obliged to clarify Premier Webster’s misinformation regarding the EC$348 million committed to the Banking Resolution. And I use the term “misinformation” very generously. It can be concluded that the Premier was painting the inaccurate picture that $EC348 million sitting in the Treasury was used to resolve the Banks — but could have been spent elsewhere within the economy.
The Government is in a very challenging period in dealing with the impacts of the COVID-19 pandemic on our economy for almost 11 months. The past Government, of which I was a part, set the stage for addressing many of these issues. We are proud of our record on that count along with key public officials that facilitated that success.
There is no doubt that this Government will have to take some tough decisions — but they should “man-up” and deal with them assertively without trying to deflect blame to any actions taken by the previous Government. They were elected because they claimed they were better equipped to fix the situation —- not to highlight the reasons why they are failing.
They must negotiate more strategically given the fragility of the Anguillian economy, which can take no further pressures at this juncture. The Banking Resolution took place almost five years ago. Since then we have had Hurricane Irma and persistent global economic shocks — yet Anguilla was doing exceptionally well up to and until the COVID-19 pandemic.
The records will show that January and February 2020 were the best revenue earning months in the history of Anguilla. So the present Government can no longer reasonably use the Banking Resolution as a scapegoat. As a matter of fact, at this time of writing, I just heard from Premier Webster’s own lips that NCBA is doing very well and that he is encouraging Anguillians to invest in it as it moves towards privatisation. Obviously, Dr. Webster, the Resolution has been a success not an excuse for new tax measures.
The resolution of the banks more that doubled Anguilla’s debt obligations, but this was clearly necessary in order to stabilise the economy and the entire banking sector. It also facilitated a stable investment environment. The choice of the resolution was carefully agreed with input from the UK Government; the World Bank; the IMF; CDB; ECCB; and the Government of Anguilla.
Premier Webster’s quotation of the Governor of Anguilla at the time, that the resolution would burden Anguillians for generations to come — was totally taken out of context. That Governor was making the case for liquidation of the banks, which would have caused Anguillians to lose a high percentage of their deposits; caused the bankruptcy of the Social Security Fund; and would have placed the regulation of domestic banking in Anguilla directly under UK Government supervision/control. Our Government fought this option vigorously and successfully.
The decision to borrow EC$348 million for the Banking Resolution was, most importantly, to protect all customer deposits and to secure the Social Security Fund for its contributors. As a result, EC$214 million in Social Security Fund were protected for present and future generations of Anguillians; large (over EC$2. 8 million) depositors were placed in a protection trust with a loan of approximately EC$75 million; and the capital adequacy ratio requirement was met with a loan of approximately EC$59 million. This is why we have a stable and vibrant NCBA today. The largest bank on the island with a most loyal customer base. And in the years after the resolution, when the international banks were losing interest in serving Anguilla, we are now in a position to fill that vacuum with a strong local bank. Thus proving that it was important to stabilise the indigenous banking sector, at considerable cost, to save Anguilla. Premier Webster, our Government is proud of that decision and we believe even more strongly that those loans could not have been put to better use.
As I indicated earlier, the Government is operating in a very challenging period. As an interested bystander, no longer seeking political office, I am moved to advise that this is the time to cease the pandering to political supporters, and other interest groups, and begin to make clear policy decisions however tough they may seem. Whereas you may promote Government on FaceBook and other social media — you cannot run a Government from these platforms. These very platforms can and will turn against you at some point if you engage in misinformation and half-truths. I want to make it clear to both readers and listeners that our Government’s decision to commit Anguilla to EC$348 million in obligations to secure 100% customer deposits; save the Social Security Fund for present and future Anguillians; and stabilise the indigenous banking sector, is not the reason why you have agreed to a number of new tax measures. On the contrary, that decision is the reason why Anguilla was firmly on the track to economic take-off before the COVID pandemic. And the reason why your Government is able to benefit from leveraging that Social Security Fund today to provide support for the unemployed during this very pandemic.
Premier Webster also used his bully pulpit to transmit veiled threats about the release of the ECCB Banking Report. He would have fallen into this predicament because in the APM campaign this was a hot topic that led to the forceful promise that once in office they would release the Banking Report. Both the Premier and I are fully aware that this would be against the ethics of his position as Member of the Monetary Council. If he was not aware of that before coming to Office he must make his supporters aware of it now. In this context, it would very decent and principled of him to cease suggesting that the reasons for not releasing these reports are to protect (in his words) cronies; family and friends. The question could then be asked: Who are the cronies; family; and friends he is now seeking to protect?
Premier Webster if your Government does well — Anguilla does well. We are here to support you. However, we will not stand idly by and allow you to disrespect one of our Government’s premiere successes just to make political points. I also recall with disgust that during the campaign one of your Ministers called the NCBA a “piggy bank”. You both would have crossed that line in the sand to which I referred in our Thank You Rally on July 4, 2020. Please don’t do that! Because once you do that — “Yuh mashin mi corn!”
Victor F. Banks
February 23, 2021
