What about the upcoming Budget and our development challenge?
BRADES, Montserrat, Feb 21, 2017 – This month (starting March 23), we will have our annual budget debates. Such budget debates have long since become the major point of public accountability over policy, over strategic vision and over moneys to be raised and spent on the day to day running of government services as well as over funds to be invested in development initiatives. As a direct result, for Montserrat this year, the questions of taxation, borrowing and grants from the UK to help us cover expenditures will be on the table. So will the issues of policy priorities and the impact of the various initiatives on economic growth and development.
One of the key issues we have to face is that (due to the volcano disaster) we depend from year to year on the UK to provide grants for about 60% of our recurrent, day- to- day government services. For development initiatives, that percentage is often something like 90%. Our hope is to use “catalytic” development initiatives to help trigger self-sustaining growth in our economy, and so bring us to the point where we can again mostly pay our way out of our own economy through a moderate rate of taxation.
That is why the November 2016 Premier’s Office Update,[1] “Building Montserrat’s Future” rightly points out that:
“ . . . this is the time to move Montserrat forward. Another several decades of recurrent budget aid, directly funded by the British tax payers is not in their or our best interest. The choice at this economic crossroad is clear; strategic capital investments to return Montserrat to self-sufficiency or continued annual Aid for generations to come. Redevelopment and the hoped for economic self-sufficiency will clearly not happen overnight, but we can and should speed up the rebuilding process; starting today.”
To move that goal forward, from year to year we have to come to an annual agreement with DfID, the arm of the UK Government that oversees development aid. A reasonable estimate for how long a development transformation will take is 10 – 20 years, not least because that is what it took last time, between the 1960’s and 80’s. Unfortunately after the MDC “failure” – DfID’s word, from its 2012 Business case[2] – we have a much more tense atmosphere for development aid. That is why some of the more notorious UK tabloids recently held up our much needed fibre optic cable project as an imagined example of waste (or worse).
We also face a classic caution from strategic management: it is a blunder to allow budgeting battles to drive an organisation’s strategy. That is, budgeting is no substitute for sound, long-term strategic vision, analysis and planning. Where, for Montserrat, our five consensus long term strategic priorities were set through the highly consultative process from 2006 on. That is what led to our Sustainable Development Plan (SDP) 2008 – 20. Since then, the same five priorities have been again put forward in 2015, as our declared Policy Agenda. Namely:
“1st: Prudent Economic Management;
2nd: Enhanced Human Development;
3rd: Sustainable Environmental Management and
Appropriate Disaster Management Practices;
4th: Good Governance; and,
5th: Population Retention and Population Growth”
Where, the November 2016 Update points out:
“DfID itself highlighted what we urgently need to do, in its 2012 MDC Business Case:
- ‘develop a tourism-driven capital town . . . as the principal location for new foreign direct investment, tourism, housing and civic facilities’;
- ‘improve physical access to Montserrat through the development of a port and breakwater . . .’ ;
- ‘improve and sustain access through investments in air and sea access assets’.
In the same 2012 business case, DfID also wrote:
‘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 . . .’ ”
In another 2012 document, on DfID’s “Work with the Overseas Territories,” right there on page one, we may read how:
“DFID manages the British Government’s long-standing responsibility to meet the reasonable needs of those Territories that require assistance [that is, ‘Montserrat, Pitcairn and St Helena’]. The International Development Secretary has made clear that the [UK] Government remains firmly committed to this responsibility, as a first call on the aid budget. But where the conditions are right, we have also been clear that we will deliver strategic investments in the aided Territories. These investments, such as the construction of an airport in St Helena [altogether some £ 285 millions], are designed to facilitate private sector driven economic growth and deliver a real prospect of both self-sufficiency and savings for the UK Government through elimination of long-term dependence on aid.
This is part of a bargain. In return for these investments, we expect these Territories, for their part, to undertake the necessary reforms to ensure an enabling environment for growth and develop their financial management capacity so that they can meet their budgetary obligations . . . . [W]e expect Territory Governments to manage their public finances sustainably and take all steps to minimise risk of fiscal crisis.”
Notice, who leads the list? Yes, us. St Helena has gone through and is the yardstick of the UK’s willingness to invest in OT’s to move our economies towards self-sufficiency – never mind, recent problems with the airport. Pitcairn has maybe fifty people there, day-to-day. So, the message is pretty directly addressed to us here in Montserrat.
Instantly, that points to:
- what are we doing to improve financial and economic management?
- How are we improving governance?
- And, how are we going to make a solid case for our key, catalytic investments that should be able to transform our economy?
These questions should have solid answers in the upcoming Budget Speech. We should also see how DfID and our local government are working together to put immediate, shovel-ready job projects on the ground. For, while the grass is growing, the horse must not starve. We should see as well, exactly how project cycle management here is moving on beyond the all-too-familiar pattern of starts, stops, restarts and delays that have hindered our rebuilding efforts for years and years. (Of course, the little we have heard about a Programme Management Office and a Montserrat Transformation Programme, some sort of grand economic business case, public sector reform [phase THREE] capacity-building etc. will need to be fleshed out.)
So, let us look forward to some solid answers in the upcoming budget speech and debate. END
[1] https://www.themontserratreporter.com/from-office-premier-building-montserrats-future/
