Dear Premier Don Romeo,
David Edgecombe
I write to support the sentiment expressed last week by former Minister of Education, Vernon ‘Auk’ Jeffers. I don’t know if his assertions are correct, but he is right to urge you not to rush to sign the new Banking Bill into law as former Premier Ruben Meade is pushing you to do.
Do not be swayed by this argument contained in Mr. Meade’s statement on ZJB Radio in his interview with Jermaine Wade, October 4, 2015:
“Our principal advisers are the Central Bank, our financial ministers of the entire OECS have all said yes [to the new Banking Bill]. Is Montserrat’s Premier brighter than everyone of those? We have for example in Grenada, Dr. Keith Mitchell, a former university lecture in math. Coming up the stream to St. Vincent and the Grenadines an economist/lawyer Ralph Gonsalves, Doctor the honorable Ralph Gonsalves, first degree in Economics, Ph.D. in Law, former university lecturer. Are you saying that he don’t (sic) understand the law and the laws? Go up to St. Lucia you have Dr. Kenny Anthony also with a first degree in Economics and a Ph.D. in Law, university senior lecturer in Law, we are saying that we are brighter than them? And you can keep coming up the line all the way to St. Kitts who has a Ph.D. in Economics, and you are saying they have seen the wisdom of passing it and Montserrat that is run by a small shop keeper is saying, ‘ahm, I’m brighter than these guys, I’m not going pass the law, because it’s not to our satisfaction’? Clearly, we’re not serious in terms of how we’re operating in Montserrat. We are part of the region we have to make a decision. Are you going to be part of the Central Bank or not? Make a decision. Not making a decision is not an option.”
The argument is that if those other leaders with their Doctor of Philosophy Degrees agree with the bill, who is Don Romeo ‘a small shop keeper’ with no degree to hesitate to sign it?
Let me tell you who.
A Montserrat leader who follows in the path of two other non-degreed Montserrat leaders who would have heard Mr. Meade’s attempt at mockery and laugh in his face.
Two other leaders who went unflinchingly against the decisions of the other Caribbean leaders because they didn’t think those decisions made much sense or were in the best interest of Montserrat. The passing years show more clearly the wisdom of those two Montserrat leaders.
Former Chief Minister Austin Bramble 1970-78
The first of these is former Chief Minister P. Austin Bramble, who held that Montserrat must first create a path to economic independence before taking political independence like its neighbors. The implication is that far more planning and groundwork needed to be done first. Today, every OECS country is no closer to economic independence than its bigger Caricom brothers Jamaica, Barbados, Trinidad & Tobago and Guyana.
The second is former Chief Minister John Osborne who insisted that the Eastern
18 years Chief Minister, John Osborne, deceased
Caribbean dollar be pegged to the United States dollar rather than to be allowed to float as was advocated by all of the other OECS leaders. That decision prevented the EC dollar from going into free fall like the Jamaica, T&T, and Guyana dollars. Today, the OECS currency is among the strongest in the region.
The briefest look at the economies of Grenada, St. Vincent, and St. Lucia should dispel any claim that their leaders are economic, financial and development geniuses whom you would be well advised to follow.
Their indigenous banks are in trouble, they cannot borrow any more money from the Central Bank, their governments have exhausted their country’s Social Security deposits. Here again Montserrat, so far, has seen to it that government can’t get its paws on the people’s pensions and money.
The one thing Montserrat should avoid doing is becoming wholly or partially responsible for any IMF debt. Based on the IMF’s record that’s the worse thing any country can do.
Nonetheless, Mr. Meade’s call for the Bank Bill to be discussed in the House is reasonable. An even better idea is to hold open discussions on it in Montserrat before voting in the House.
If there is a sound reason to pass any legislation, we cannot assume that the public and investors are too stupid to understand it. When our Government passes or rejects laws openly and in the spirit of democracy it is a good thing.
Finally, the Eastern Caribbean Central Bank is playing a pivotal role in getting the new Bank Bill passed and it stands to gain a tremendous increase in its power. What is the health—financial, philosophical, and managerial—of the ECCB?
Mr. Meade has said that the Central Bank is a “good bank” that has sought to protect the interest of working people and their deposits; that has sought to keep failing indigenous banks (including BoM in the early 1990s) solvent; that it wants to put in place regulations to reduce the possibilities of directors and governments extracting loans from indigenous banks that they refuse to or are incapable of paying back. Therein lies the rub.
The Ministers of Finance will continue to make up the Monetary Council. Will the ECCB with its increased powers be in any better position to stop the bad practices that cause indigenous banks to be in financial trouble?
Can there be such a thing as a good bank? Given the gigantic rip-off of working people by too-big-to-fail American Banks in 2008 and the countless other examples around the world, this is not a cynical question.
If indeed the ECCB, with Montserrat’s help, can foster a banking system that will champion the interest of poor people rather than be a tool of the rich and powerful it would be a good thing. It would be an enormously good thing. But there are no guarantees and I must warn you, the evidence shows the chances of this happening are small.
Be vigilant. Discuss the new bank bill thoroughly. We cannot repeat the CLICO mistake rushing to follow others into disastrous money decisions because everybody else is doing it.
Sincerely,
David Edgecombe
