“Obama says that everybody must make a sacrifice and if we have to make sacrifices, we will survive,” Chief Minister Osbourne Fleming stated as he addressed reporters during his weekly press conference on Tuesday. “If the Ministers of Government and the Civil Servants have to take a cut in their salaries, it will be fine. We must be prepared for that and I am prepared for it because I believe that we have to weather the storm.”

CM Fleming and Hon. Evans Rogers

Mr. Fleming said that from his vantage point he was of the opinion that the Government would experience difficulty in financing its budget of 339 million dollars this year just like a number of businesses in Anguilla which would face a downturn in their revenues. “All of us, whether you are in Government, you have to position yourself to be as thrifty and careful as possible because money will not flow in 2009 like it did in 2007. Every household must address the problem we have,” the Chief Minister urged.

He went on: “I am going to extend an appeal to the people of Anguilla, especially those who are elected, and the business community, for us all to sit down and brainstorm as to how we can help each other during this time. There is no need for the slurs, cursing and slander about whose fault it is. We are in a serious position in Anguilla and by extension in the world. It is true that elections are next year but whatever happens, the next Government will have to bear the burden. The circumstances in Anguilla will not be changed by a face.”

Measures To Reduce Expenditure

Mr. Fleming made the point that the Government of Anguilla would continue to monitor the island’s fiscal situation and was prepared to introduce measures to reduce expenditure. “The freeze on the hiring of new staff is continuing from 2008 so in other words the Government will not be actively employing people. The Government of Anguilla is also considering the reduction or removal of certain allowances including travel, entertainment and telephone and might also have to consider rent allowance.
We will increase capital expenditure with proceeds from [loans] from the Caribbean Development Bank. In other words, we have to stimulate the economy as far as we can. We of ourselves do not have the financial means to do it but we will proceed with getting money from the CDB.

Mr. Fleming clarified the tax situation saying that Government had decided to cancel the 5-10 percent increase originally planned for the registration and licensing on vehicles. The other measures include Property Tax which has been increased and the Environmental Tax which has moved from 5-7 percent.

He said that this year the tourism industry was not looking good and that already workers had been laid off at some hotels while the working days of other employees had been reduced. “Everybody in Anguilla is affected: our taxi-drivers, restaurants, shops and rental businesses,” he lamented.

“I have become very melancholy these days because I see some serious times coming,” he said. “I want to know what is going to happen in April, May, June, July, August, September, and October. Where will we find the revenue to run this country? It will not be an easy walk for this Government.”

Request To British Government

The Chief Minister re-stated his Government’s decision to approach the British Government for assistance. The letter setting out the Government’s case is being formulated. “We are sensitizing the British Government about our position,” he told the reporters. “I feel that we had an ambitious programme where we had projects on stream and approved, in the pipeline, which would have sustained Anguilla for a while, but all of those and the vision we had are now dashed. We feel that we should let the British Government know that while we want to carry the weight of this country by ourselves, financially, there might be need for us to ask for some sort of easement whether it will be in the area of support for projects or the ability to borrow [up to a certain amount of money].

He noted that the Anguilla Government was required to get the approval of the Secretary of State to borrow certain sums of money as Britain was very concerned about contingent liabilities whereby if Anguilla built up a public debt it could not pay, it would be the responsibility of the British Government to meet that repayment.

Anguilla’s Banks Stable

In reporting on the OECS Monetary Council meeting which he and Mr. Rogers attended in St. Kitts last week, Mr. Fleming said that officials of the Eastern Caribbean Central Bank told the gathering that the local banks in the sub-region, including Anguilla, were stable and there was no need for alarm. The assurance was also given that “the Central Bank will always be near and dear to any bank and none of the local banks in the region will be allowed to go under.”

Mr. Fleming continued: “We had a measure of comfort because there had been a lot of rumours around… In Anguilla, National Bank, Caribbean Commercial Bank, FirstCaribbean, and Scotiabank have been doing a good job in lending money to Anguillians. As the economic development of Anguilla came on stream, a number of young and not-so-young people engaged themselves in investments and the local banks facilitated the funding. Now because of the downturn, we find that persons are not able to come up with the re-payment process. What that does is prohibits the banks from having the cash flow coming in to replace the cash flow that went out, so deposits in the banks are not flowing strong enough but the loans are already out.”

He stated that the banks were operating normally, but there was some difficulty for persons to obtain loans at present and the institutions were now encouraging deposits. “I take this opportunity to let Anguillians know that there is no problem in depositing their money at the banks,” Mr. Fleming said. “They will need that liquidity to help others. There is no crisis. The banks are properly regulated. The Central Bank is monitoring all of the banks in the OECS to ensure that they run well. Our people need not be alarmed.” He advised everyone to avoid spreading unfounded rumours about the banks which he warned could aggravate the situation.

Mr. Fleming said that the Monetary Council meeting looked at ways of responding to the global financial situation which could continue for the next two or three years. He reported that those at the meeting sought how they could mitigate what was happening and advanced ideas to deal with the issues. He said tourism was a matter of much discussion as all the islands in the OECS were involved in that industry. “Each of them expressed that the number of arrivals was down and that there were significant lay-offs and that the whole economic situation was disturbed,” he reported. He stated that there were a number of presentations on such matters as giving concessions in many areas to assist businesses and to ensure that jobs were available.

Anguilla’s Position

The Chief Minister outlined Anguilla’s position at the meeting. “We made it clear that in spite of the hardships with tourism, we had decided to pump some money into marketing. We feel that although the industry is now being suppressed, we cannot lie dead. We must begin to push to ensure that when things get better, we will be on the ball. We also indicated that non-Anguillian workers will be the first to be laid off in this employment.”

He recalled that last year the St. Lucia Government gave orders for 10,000 people from the region and beyond to leave the island. He pointed out that the Anguilla Government had been very accommodating to hundreds of Caribbean nationals seeking employment but now, as a result of the downturn in the economy, it had become necessary for many of them to be asked to leave the island to protect the local employment market. He indicated that this resulted in some discussion, with the Prime Minister of St. Vincent requesting some consideration for nationals from his territory.

Minister of Social Development, Evans Rogers, commented that while islands like St. Lucia, St. Vincent and Dominica were to able to obtain financial assistance from the China, Taiwan and Venezuela, Anguilla’s association with the United Kingdom did not allow the island to access funding from those countries.

Mr. Rogers spoke on various other matters relating to the Monetary Council meeting and said it all boiled down to financial affordability and savings in these difficult times.

Events In The Ministry of Social Development

The Minister reported that work was continuing on finalising the Community College Bill to be taken to the House of Assembly shortly. His Ministry was also working on a review of the education sector and the inclusion of a number of mitigation measures. A Committee was also being established to deal with problems being experienced at the Comprehensive School and on February 23 the Ministry will be looking at the state of primary education in Anguilla and in March at the Comprehensive education system. A roundtable discussion was planned for Friday this week on the Community College and the way forward.

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