With fewer people inspired by compelling careers in today’s global workforce, many are ascribing to the “FIRE” movement. FIRE stands for Financial Independence, Retire Early. For a family, it is a “program of extreme savings and investment that aims to allow them to retire far earlier than traditional budgets and retirement plans would permit.”1
Could Anguillians Achieve FIRE?
With new and higher taxes like GST every year, financial independence or “retiring early” may only be accomplished by leaving Anguilla or being remotely employed. Personal savings and investments for FIRE may no longer be possible here, where taxes increase the cost of living faster than wages or profits.
Fettered Indebtedness – without Our Consent!
“Curbing” spending is the only sustainable alternative to GST. However, years of mismanagement have driven “policy-dependent” debt, like imposing GST and other taxes. Failure to balance budgets and build reserves burdens taxpayers in a spiral of fettered indebtedness, without our consent.
Independence Isn’t the Answer: Global Shocks vs. IMF
Notably, there are other island nations ruled by banks, irrespective of independence. With 22 million people in the Indian Ocean, Sri Lanka had enjoyed a “booming tourism industry” with internationally acclaimed infrastructure investments; however, since the “early 2000s, successive Sri Lankan governments have been increasingly borrowing…” while apparently likewise amassing fettered indebtedness. Gradually, China and India owned 10 and 3% of the debt, respectively.
Last month, Sri Lanka defaulted. As uncertainties emerged, India agreed to deferments, trade credit and possibly more aid. Whereas China allowed a currency swap but not debt restructuring.2 With both powers seeking influence, safeguarding neutrality may require Sri Lankans to submit to IMF (International Monetary Fund) controls, rather than those of India or China.
Iceland is another independent island nation forced into fiscal austerity when its banks collapsed in the great recession, versus the pandemic aftermath, as in Sri Lanka. Icelanders hoped for “…a deal to repay Britain and the Netherlands the $5.7 Billion loan it used to compensate foreign depositors for losses in Icelandic banks.” Sound familiar?
Health spending cuts were compounded by higher gas prices, interest rates and unemployment. Icelanders were especially angered by devastating impacts on personal loans tied to international rates and developed a “widely held belief that it is the IMF and not the government …dictating policy.”3 It took another 10 years of regulatory measures, personal and sovereign debt restructuring, and indictments to stabilise Iceland’s economy.4
Independence Isn’t the Answer: Disasters vs. International Climate Finance System
In fact, island nations are as vulnerable to the international climate finance system as to disasters, which the Fiji UN Ambassador described as “cruelty.”5 Despite pledges by “rich” nations of $100 billion per year made soon after Iceland’s crisis, just $15.4 billion had been disbursed to the “46 least developed countries” in 2019. From Barbados to Dominica, Antigua to Jamaica, Caribbean frustrations mirror those in Fiji. To attempt to access funding, millions are often required for damage assessments and project proposals – which can then linger for years in a “lottery” vying for grants from IMF, World Bank, European Investment Bank – or private-sector pension funds. The “system” thus leaves nations with fewest resources and greatest needs to languish, unable to rebuild before further calamities compound the devastation.5
Independence Isn’t the Answer: Islands vs. Chinese Interests
Following military “exercises simulating an encirclement… intended as a ‘serious warning’” – on April 21st, the Chinese foreign minister said, “…any who go against Beijing’s demand to exert control over [Taiwan] are ‘playing with fire.’”6 Despite worldwide dependence on Taiwan for computer chips as an island nation of 24 million, “de facto independence”” has not ensured their freedom.
Closer to home, Forbes reported in January that “China is now one of the largest trading partners of many Caribbean countries, and it finances infrastructure projects across the region…” Antigua and Barbuda, Barbados, Cuba, Dominica, Dominican Republic, Grenada, Guyana, Jamaica, Suriname, and Trinidad and Tobago have all signed Belt and Roads Initiative MOUs worth billions in commitments. In response, the US senior Caribbean policy advisor observed, “The acid test of [these relationships] will be China’s reaction to the anticipated spate of sovereign debt defaults in emerging economies. Will China forgive or restructure, or will it claim infrastructure and land as collateral?”7
Independence Isn’t the Answer: Islands vs. Russian Interests
If 43 million people in an independent country didn’t ensure freedom for Ukraine, we have a glaring object lesson from Russia’s invasion.
In the Caribbean, Russia has “strong ties to authoritarian regimes” whose leaders enjoy its political, economic and security assistance. However, “Putin wants more in Latin America” and conspicuously hosted leaders from Argentina and Brazil shortly before that invasion. And, when seeking to expel Russia from the UN Human Rights Council: while 19 Latin American and Caribbean nations voted in favour, Cuba, Bolivia and Nicaragua voted against the resolution – and 10 others abstained, with Mexico, Barbados, Guyana, St Kitts and Nevis, Saint Vincent and the Grenadines, and Trinidad and Tobago among them. While sanctions and Ukraine have slowed munitions and propaganda initiatives, they are likely to vigorously resume if Russia withdraws from Ukraine. The US “needs to … to step in where Russian activity has ceased or become problematic. The alternative otherwise might come from Beijing… [the US] must … seize this moment in the hemisphere before others do.”8
The Only Independence is Financial Independence!
As long as we live in an uncertain world, whether weathering storms, raking sargassum, or being imperiled by global inflation, recessions, or pandemics, we as a People have a stark choice: demand restructuring of a sustainable, affordable government with a balanced budget and unparalleled investment funds – or continue to pay new and higher taxes like GST, as more families and friends slip into poverty and the humiliation of handouts, forever fettered by our indebtedness and ruled by our creditors, regardless whether we remain a British colony or declare independence tomorrow. The only independence is financial independence – for Anguilla, and every family aching for the freedom to build their own FIRE!
Demand repeal of GST – and a balanced budget bill. Now.
This article reflects cultural and economic issues raised on July 5, 2021, at the House Select Committee on GST Public Hearing. 1https://www.investopedia.com/terms/f/financial-independence-retire-early-fire.asp; 2https://www.dw.com/en/sri-lankas-foreign-debt-default-why-the-island-nation-went-under/a-61475596;3 https://www.nytimes.com/2009/07/28/business/global/28iceland.html; 4https://www.bis.org/fsi/fsicms1.pdf; 5https://www.canarymedia.com/articles/climate-justice/small-island-nations-suffer-under-broken-and-cruel-climate-finance-system; 6 https://www.nbcnews.com/news/world/china-foreign-minister-threats-taiwan-rcna80790; 7https://www.forbes.com/sites/earlcarr/2023/01/27/chinas-engagement-in-the-caribbean-and-the-united-states-response /?sh=394e66b5ac3f; 8https://www.bushcenter.org/publications/russia-and-latin-america-after-february-24
