The world – and the economy in Anguilla – are currently in a serious state of flux with exponential inflation as compared to their position some years ago. This is due to a number of factors – certainly here in Anguilla.
It is due to our slow but continual recovery from Hurricane Irma in 2017, and the sudden and traumatic impact of the COVID-19 pandemic, which is further exacerbated by the ongoing Russia-Ukraine war – all of which are having a toll on the economic realities experienced by our people.
The big question is, how will the people of Anguilla survive during this dispensation, and in this context, while still being confronted with a tax (GST) that the current administration is determined to implement, effective July 1?
While the government of the day cannot be blamed directly for the spiralling cost of living that is impacting Anguilla, its actions, delayed actions and inactions, can be called into question.
Much of the growing cost of living in Anguilla can be attributed to the island’s heavy reliance on imports for the people’s daily survival and for its own economic activity.
Anguilla’s government – regardless of its Party affiliation or skills make-up – has failed to act aggressively to position the island in an upward trajectory under the umbrella of a diversified economic structure. There is no evidence of a “workable, sustainable, alternative plan” to branch out beyond the tourism industry. There is no “tangible evidence” of the island becoming less reliant on fossil fuel. There is no evidence of “active and immediate movement” toward using renewable energy sources. There is no “staying power” to become self-sufficient in areas of agriculture. And there is no “urgency” to develop our fishing waters north of Anguilla.
The reality of where we are today, is that we have stagflation – where the economy of Anguilla is stagnant and, in some cases, reversing while there is growing exponential rate of inflation.
We are at the mercy of whomever, and whatever, controls the economic apparatus, and the current shortage of goods – globally – is likely to continue for quite some time. Following the COVID pandemic, many businesses and organisations around the world have been finding it difficult to reach pre-covid capacity production.
In a similar way, the same is true for the shipping industry now experiencing back logs and other logistic challenges due to the COVID pandemic. Many freighters were decommissioned during the height of the pandemic which created problems in the movement of goods – both in terms of locating and sourcing. This created a shortage in consumable goods such as food items and building material.
The issue of shortage drives prices up which is, in part, also responsible for the high cost of goods and the availability of goods and services to our people.
The challenge that we have in Anguilla, is how do we navigate through this very difficult period of growing high inflation, and no increase in income or a continual depletion of savings? Government has a need – it believes – to deliver on GST to meet its financial obligations, but no one is addressing the elephant(s) standing in the room.
Statements were made at the government’s press briefing on Monday, April 11, that shine light on some of the elephants in the room, and perhaps also give them sustenance on which to grow.
A member of the media observed: “It seems that consumers are going to be paying 5% or more on everything” once the GST goes into effect on July 1, 2022.
From the government revenue-collecting agency, Director of Inland Revenue Department noted: “There are external shocks that are causing [price increases]. We are all going through some inflation, that’s why we are doing our best here to try to mitigate some of that.”
“We are not taxing anyone to death – that is not our intention at all,” the Tax Consultant said. “We do have a list of zero-rated supplies (a basket of basic food items), and a list of exempt supplies. We have allowed for persons to be able to prepare a healthy meal for their families.”
We acknowledge the elephants’ presence in the room and sometimes we feed them – intentionally or not.
But seriously, when will we do something to remove the elephant(s) in the room?
