BRADES, Montserrat, June 10, 2017 – On Friday June 9, Premier and Finance Minister the Hon. Donaldson Romeo presented the Montserrat annual budget, which has been delayed since March 23, two-and-a-half months ago.
Such an exceptional delay had to be explained, and the Premier spoke of: “[t]he UK referendum and the vote to leave the European Union . . . UK [Cabinet] Cabinet Re-shuffle [After Prime Minister Cameron’s resignation on losing the Brexit vote] . . . [and the] drop in the value of the Pound,” concluding: “the new DfID Minister, we are told, chose to review the budgets of the two Overseas Territories [Montserrat and St Helena . . .] that receive [annual] financial aid.” (Actually, there is a third, Pitcairn, but that territory has about fifty people living there.)
Montserrat then faced further delays due to the UK snap election that just cost EIGHT UK Ministers their seats. It also cost Hon. UK Prime Minister May her majority. DFID Ministers Hon Priti Patel and Hon Rory Stewart were returned, but one of their colleagues is among the eight the UK’s voters sent home.
The budget highlights in Premier Romeo’s speech will help us understand where we stand:
“FIRST, Our Recurrent Budget: For 2017/18, the recurrent budget estimate is One hundred and twenty-eight million, three hundred and eighty thousand, three hundred dollars ($128,380,300). This sum is a 0.97 percent increase over 2016-17 . . . Support from DFID will contribute $78 million, 61% . . . .
SECOND- SECTOR PLANS; . . . a new tourism policy and Tourism development Plan, an Energy Policy and Action Plan and an Agricultural Strategy . . . developing an Economic Growth plan . . . .
THIRD, the Capital programme: For 2017/18, the capital programme estimate is $31.14
million. This is based on approximately 56% funding from DFID, 37% from the EU and
7.15% from other funding partners.
FOURTH, Main projects: Major projects in our capital programme include: Media Exchange ($1.03 million) for the completion of the ZJB Building, Roads & Bridges ($1.2 million) under the Montserrat Priority Infrastructure Needs Project, ICT ($0.95 million), Energy ($2.68 million) and Geothermal Exploration ($0.63 million). Under the Montserrat Priority Infrastructure Needs Project . . . nearly $5 million . . . .
FIFTH, Expediting Projects: . . . longstanding problem of delays in projects will be minimized by implementing a Programme Management Office (PMO) . . . .
SIXTH, Port Development: As we all know, access is perhaps our single biggest
challenge to growth. I am happy to announce, therefore, that through the UK
Caribbean Infrastructure Partnership Fund (UKCIF), and Caribbean Development
Bank (CDB), Montserrat has a top-level allocation of GBP£14.4 million or USD$20.3
million towards phase 1 of the Little Bay Port Development initiative . . . .
SEVENTH, four other “catalytic” projects . . . to help us move to self-sustaining sound growth and development . . . geothermal energy development; hospital developments; access connectivity; and human resources/public sector reform phase 3.”
In addition, it is intended to “expand access to home ownership for qualified low to middle income residents through public/private partnerships to include [the] HOME programme, Serviced residential lots, Divestments of Land and Housing and new Direct Builds.” Where, “seven critical emergency houses are to be constructed in the new fiscal year 2017/18.” Also, “Cabinet has recently approved granting exemption from Import Duty and Consumption Tax for three (3) years on all building materials imported specifically to repair or build any structure located in those villages of Cork Hill, Delvin’s, Foxes Bay, Weekes’s and Richmond Hill from the 1st of July.” And, of course, there was a modest pay raise of three percent for civil servants, with an extra up to ten percent for those at the bottom of the scale.
The first-phase sea port development is a major point of hope. For, this is a major step forward on access. Then, if the new PMO and other reforms help to build our project cycle management capacity and move the port and the other “catalytic” projects forward, that would be a breakthrough. Other projects will help us to keep money flowing in the economy until the key benefits of the big-ticket projects begin to flow. It is especially heartening to see the seven emergency houses finally moving forward.
However, a sobering hint was sounded when the Premier spoke of how our annual aid grants come from a serious sacrifice by ordinary people in the UK. Many government budgets there have had 30% cuts, and officers have had to go home. A further cut of 6% is on the table, intended to save “£3.5bn by 2020.” Premier Romeo therefore pledged: “thank you, we understand how precious, how costly that gift is, and today we pledge that we will strive to make the very best use of it, to restore our volcano-ravaged island.”
Another sobering point lies hidden in the modest scale of pay raises. For, while it is true that – based on the UN Charter, Article 73 – there is a legally binding commitment by the UK to support sound development in Montserrat, what we receive is coming from sacrifice. Sacrifice, in a context where the voters in the UK are clearly increasingly restive. So, something like a large across-the-board pay rise will only be justifiable from our own resources, rooted in sustained, organic, private sector led inclusive growth in a revitalised economy.
Likewise, given cases like the troubled £285 million airport project in St Helena (and concerns about the “failure[s]” of our own MDC from 2007 – 2014), business cases and implementation for our hoped-for breakthrough projects will have to be absolutely solid. We simply cannot afford further “wasted aid” scandals. Indeed, that is a clear implication of the DfID Ministers taking time to personally go over our budget point by point before it was approved.
So, while there are indeed signs of hope and points of good news in the 2017/18 budget, we stand under a sobering warning.
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