This is the title of a letter Mr Ben Merrick, the supervisor of all British Overseas Territories’ Governors, wrote to Anguilla’s Chief Minister on 23 December 2017. In it, he offers us a £60 million (approximately EC$250 million) reconstruction grant.
This British taxpayers’ money is to help us build back stronger after the devastation of Hurricane Irma. It is a grant, a gift: we don’t have to pay back a cent of it.
There has been no discussion of this letter in the public domain that I know about, other than a cursory mention by the Chief Minister in his January press conference. It came to my attention only last week. It deserves to be publicly discussed.
Reading it, I gather that they have no intention of just dropping the money on us. They have set out a number of conditions we have to meet before they let us have the first payment. And, we have to satisfy them at quarterly intervals that we are keeping our promises and commitments, if we are to continue receiving disbursements.
First, we must agree a revised Medium Term Economic and Fiscal Reform Programme (MTEFRP);
Second, we must appoint a Financial Adviser to sit in ExCo and in the Ministry of Finance; and
Third, we must submit a clear list of the projects we will spend the money on, with agreed implementation arrangements.
The letter claims that if we can meet the first condition, we will not just be building back infrastructure, but also maintaining strong public finances and creating an environment that encourages business and attracts significant investment.
We already have an MTEFRP. But Hurricane Irma committed euthanasia on it. It has been put to sleep. That is why we have to agree another one. Meanwhile, our national debt is well over EC$400 million and growing (EC$206.53 million in 2015 and EC$419.24 million in 2016.)
The full aid package will not be handed over in one lump sum. It will be disbursed in stages, and only if we can show that we are making progress in implementing the MTEFRP. No more will we be permitted to submit wonderful sounding promises, take the money, and then just go back to the old ways of spending it.
The MTEFP was due by 31 January 2018. In it we had to show (1) how we would manage our public finances; and (2) how we would progress sustained economic development.
Anyone who has read the Chief Auditor’s ‘Audit of Accounts 2013’, published in 2016 on the Government website, will be aware that we have failed to manage our public finances. Many departments of government keep no proper record of where they got their money. They can’t account for where they spend it, or who they spend it on. Taxes, duties and levies are forgiven without authority, and with no record made. The result is that for the past 40 years we have never had a clean audit.
To get this money, we have to set out in detail the steps we intend to take to achieve a current account budgetary surplus from 2019 onwards. In my opinion, that is simply impossible. Our public debt continues to increase. I would guess that we won’t achieve a surplus for decades to come.
We can supply, as they request, an updated public finance projection from 2018-2025. That is not difficult. We are experts at drawing up projections and writing reports.
They ask us to clearly identify what actions we will take to manage public spending, and increase the efficiency of the public service. I don’t think we can meet this condition. We permit public servants to arbitrarily reduce assessments, duties and taxes without any record being kept, or any report being made, as the ‘Financial Administration and Audit Act’ requires.
Next, they want us to take clear steps to raise revenue through increasing tax compliance rates, reducing arrears, and extending taxation.
We have to provide a clear work plan for each measure, including actions that need to be taken and target outputs per quarter.
We must prepare a risk register including mitigating steps to manage future pressures from such things as more hurricanes in the years to come.
We must provide a timetable and a process for reporting on a quarterly basis to ensure the momentum on reform efforts is maintained.
These are high bars for us to cross. We long ago decided that we will never enforce our tax laws if it means, to repeat the memorable words of a former Chief Minister, “criminalising innocent Anguillians”.
In my opinion, it is unlikely we can meet these conditions for receiving this money. Unless we change our past ways, we will never receive one penny of the offered grant. If we get any of the money, it will most probably be for having successfully pulled the tam down over their eyes.
