A Leaky Tyre Economy?
BRADES, Montserrat, Oct 1, 2015 – For many years, Montserrat’s economy has acted like a car with a leaky tyre. Pump it up with some new money, and there is some growth. But as soon as the stimulus goes away, pfft, it goes flat again; often at a very inconvenient moment:
Why?
Because, from the 1980’s on, our economy has been hit by several major shocks, starting with the offshore banking scandal and collapse, and with Hurricane Hugo.
Once the volcano crisis hit us from 1995 on, the economy shrank by a half and has never recovered. Other things just piled on. For years we depended on a ferry and a helicopter for access, and the thought of a new airport was a great hope. Yes, CRM and others were concerned that maybe the runway was short, maybe Thatch Valley was a better site, maybe, maybe.
But when that first Twin Otter plane landed, we were cheering.
Louis and the other MV Opale Ferry crew bid a tearful farewell, the Rapid Explorer came and went, and off we were – on the way to a brighter future.
Then, tourism arrivals went down by one fifth, and the injection of money to build the airport was fading out. The 2007 Cricket World Cup did not live up to regional tourism hopes, oil prices shot up through the roof in 2007 – 8, there was a global financial crisis, and the world economy slid into deep recession in 2008 – 9. It has struggled ever since.
We have had seven governments in twenty years. Four hundred are still on a waiting list for housing assistance. Year after year, many of us struggle from week to week. Similarly, for years and years too, a lot of local businesses have barely been able to keep heads above the water. Many Contractors have gone without a serious job for years at a time. Farmers and fishers are struggling, too. The big question is: how do we deal with the flat tyre economy and the lions?
The 2012 DFID Business Case for HMG support to the Montserrat Development Corporation, advised:
“The principal barrier to economic growth and development on the island is poor physical access. This is particularly the case for sea access. The current ferry service from Antigua [then, Caribe Queen] is not suitable for the development of the cruise day tour market or facilitating trade. The jetty and port facilities also have limited capacity and due to adverse weather conditions significant downtime that limits commercial and cruise ship use . . . . There is currently no prospect of the private sector making significant investment in major capital investments or in complementary institutional support. This is because the market for leisure and commercial transport to Montserrat is perceived by the private sector as too small and high risk. Initial and catalytic investments are therefore required by the public sector and these need to be properly designed and implemented . . .”
But, for years and years, those key “initial and catalytic investments” to create room for self-sustaining growth and give investor confidence a shot in the arm have been unable to break out of the preliminary “talk-shop” stages of the project cycle. Instead, we keep on getting a little short-term pumping up, only to leak back flat again and again.
No wonder, DFID Minister Hon. Mr. Allen Duncan said during his December 9, 2011 interview with The Montserrat Reporter:
“ . . . You can’t have a sustainable economy without good communications, transport or information . . . . so I appreciate the ferry – it’s small and inadequate but if you’re going to have a bigger ferry then you need investment in the port. We’ve got to look at how much is justified. Do you go straight to making it big enough for larger ships; is there a private sector aspect to it where someone outside government might invest? So, we’re exploring all that with [Premier Meade]. Something is going to have to be done to improve access so that’s what . . . people are working on all the time.”
So, why is it that, after nearly twenty years we seemingly cannot get a firm agreement between GoM and DFID as to where to put a permanent sea port? Why are we still relying on an emergency jetty? Likewise, what is going to be done about our airport?
Fibre Optics access, geothermal energy development, hospital and school upgrading etc. are important and we are thankful to HMG and the EU (our main development partners) for many forms of help so far. But access, especially sea access, is still a critical issue. And, until we address good governance and strengthen partnerships, there will be doubt that we are “safe hands” for a St Helena-like “catalytic” investment.
Over the next year or so, we therefore need to:
- identify and carry out agreed “safe hands” good governance reforms
- develop an agreed list of “parallel priority,” economy- transforming “catalytic” investments (e.g., the sea port, geothermal energy, the new capital town, etc.)
- set up a 10 – 20 year time-line for these key projects (that’s how long it took last time – from the 1960’s – 80’s . . .)
- agree with DFID on a programme-based project cycle management framework to carry out and oversee the group of “catalytic” projects
- put the agreements in black and white, through a development partnership MoU with DFID
- establish joint GoM-DFID oversight, to keep things on track and on timeWe have the St Helena £ 250 million airport project as a yardstick, we have means and opportunity for reform. So, if not now, then when – and why
