We need to know the true state of our economy

Contribution – Part 117 (DOD ‘21 # 11)

How can we make a proper, strongly supported case for economic relief unless we understand where our economy is?

BRADES, Montserrat, July 8, 2021 –  On June 17, 2021, Hon Premier Easton Taylor Farrell presented our annual budget, which had been delayed in part due to the need for a poverty assessment due for May.  However, during his speech, the Premier did not give us specific statistics on poverty. Indeed, while he gave us economic growth rate figures for the world and for the UK as well as the EC region, he did not do so for Montserrat. Such an omission is likely to be significant (as we have been battered by both a volcano crisis and now a pandemic), and there is a public need and right to know what the state of our economy is. It may be bad, but it is the base on which we must build to achieve a brighter future.

SOURCES, ECCB Reports, Labour survey; Budget speech and radio remarks

Accordingly, once we could find figures at ECCB and once we heard hints from the budget debate and on a subsequent Opposition programme on Tuesday, July 6, we think it is important to share what we found.

The figures, reflecting the pandemic riding on top of twenty-six years of volcano crisis, are – as expected – less than happy reading.

However, we must emphasise: it was the duty of the presenters of the budget, to be frank with the public about our economic performance. If that is not done consistently, astute investors will begin to “read between the lines,” drawing prudent conclusions from what is not said, and not to our advantage.  Others will take their cues from what the smart money players are doing – “signalling” – and business confidence, for cause, will collapse.

Instead, let us face the numbers, again recognising the impact of many years of volcano crisis and the added blow from the pandemic. Then, let us look at how the CIPREG projects approved in 2019 after years of effort to make the case are likely to help to turn the tide.  For, the UK’s confidence to invest in key growth-driving infrastructure is a very good long term signal for Montserrat. Yes, it’s been long, it’s been rough, but we are coming back, better than ever.

A point of surprise (given much talk of a “dead, dead, dead” economy) is that by 2019, the economy was already growing at a 6 – 7% clip. Where, yes, our local economic model runs about 1½% hotter than ECCB’s. But the two models agree that there was about a 14% adverse swing in growth due to the pandemic hit. For further example, low construction activity readily accounts for the high unemployment rate for men. We should note, though, that construction is not that much larger than the much bemoaned agricultural sector (usually pegged at 2 – 3% of GDP); that means, we should not write off agriculture’s potential to help make a difference to growth. Likewise, tourist arrivals, pre-pandemic, were well along the way to the sort of goals that were suggested by planners a decade or so ago. There is obvious room for growth, with tourism as a first growth driver. Close behind, are digitalisation and Geothermal Energy. But we should not overlook agriculture and other possibilities such as light manufacturing (bottled water for example) or even educational tourism.

The linked concern is, how hard the pandemic and lack of a sustained stimulus have hit struggling businesses, families facing income losses or gaps and our financial institutions with a one-two punch combo.  Let us see what we can do to help businesses and people who look to construction, tourism and the like. Of course, the cloud, that given a volcano crisis weakened economy the Civil Service is about half of employment, has the silver lining that the steady income probably cushioned some of the additional blows. But, we want growth, and growth led by the private sector.

That noted, the growth rate for 2019 also suggests that CIPREG should lay a basis for sustained, accelerated growth.  Is there need to mention, in a pandemic world, that a solid hospital is a key enabler for growth? That, in a digital age, solid education with good exposure to key technologies is another key enabler? That we will need training for the hospitality industry? That workers need somewhere to live? That public transport is important, as is access? Have we forgotten how many ways the ferry enabled the small business sector and facilitated travel for so many of us? That this last issue will be the subject of serious if not urgent review as to the motives and beneficial consequences for the disablement?

The high youth unemployment rate is of particular concern, and easily explains the problem of an annual emigration of graduates from our secondary school. We need growth sectors to draw in our youth and give hope for the future. That is in part, what CIPREG is about.

All of this, then draws attention to the missing stimulus.

Yes, missing. Montserrat is probably comparable to a small rural town in England or Wales. With something like £300 billion in pandemic stimulus on the cards, there was no good reason why we should not have had a much more significant intervention, given our pre-existing volcano-ravaged economy. Yes, CIPREG is important, but it is a medium-to-long-term measure. Bridging support is manifestly needed.

The UK acknowledges the legal force of the UN Charter, Article 73, so it should be feasible to negotiate for such a support package; those who tried to deride, dismiss and mock the relevance of this Charter have done us no favours. Let us now re-think and act on this key high card for negotiations. Yes, the UK is legally bound to promote constructive measures of development and to ensure our economic, educational, social and political advancement while respecting our culture.

For those negotiations, the UK’s own domestic support is an obvious yardstick, and social housing, road development and support to businesses and those facing hardships would be logical targets. Similarly, this is the time to make the point that we need to have a proper port development, with a breakwater. Not least, the UK’s domestic pandemic package shows that they know that in the face of a blow like this, failing to inject significant support would only enable a further economic down spiral. That holds for Montserrat, too, and so they must know that an inadequate aid intervention would predictably help to make matters worse. Especially, if it damages the capacity of our tourism sector. Our case for economic support is naturally quite strong. We must make it and we must show our capability and sound governance to build confidence that we can implement successfully.

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A Moment with the Registrar of Lands

Contribution – Part 117 (DOD ‘21 # 11)

How can we make a proper, strongly supported case for economic relief unless we understand where our economy is?

BRADES, Montserrat, July 8, 2021 –  On June 17, 2021, Hon Premier Easton Taylor Farrell presented our annual budget, which had been delayed in part due to the need for a poverty assessment due for May.  However, during his speech, the Premier did not give us specific statistics on poverty. Indeed, while he gave us economic growth rate figures for the world and for the UK as well as the EC region, he did not do so for Montserrat. Such an omission is likely to be significant (as we have been battered by both a volcano crisis and now a pandemic), and there is a public need and right to know what the state of our economy is. It may be bad, but it is the base on which we must build to achieve a brighter future.

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SOURCES, ECCB Reports, Labour survey; Budget speech and radio remarks

Accordingly, once we could find figures at ECCB and once we heard hints from the budget debate and on a subsequent Opposition programme on Tuesday, July 6, we think it is important to share what we found.

The figures, reflecting the pandemic riding on top of twenty-six years of volcano crisis, are – as expected – less than happy reading.

However, we must emphasise: it was the duty of the presenters of the budget, to be frank with the public about our economic performance. If that is not done consistently, astute investors will begin to “read between the lines,” drawing prudent conclusions from what is not said, and not to our advantage.  Others will take their cues from what the smart money players are doing – “signalling” – and business confidence, for cause, will collapse.

Instead, let us face the numbers, again recognising the impact of many years of volcano crisis and the added blow from the pandemic. Then, let us look at how the CIPREG projects approved in 2019 after years of effort to make the case are likely to help to turn the tide.  For, the UK’s confidence to invest in key growth-driving infrastructure is a very good long term signal for Montserrat. Yes, it’s been long, it’s been rough, but we are coming back, better than ever.

A point of surprise (given much talk of a “dead, dead, dead” economy) is that by 2019, the economy was already growing at a 6 – 7% clip. Where, yes, our local economic model runs about 1½% hotter than ECCB’s. But the two models agree that there was about a 14% adverse swing in growth due to the pandemic hit. For further example, low construction activity readily accounts for the high unemployment rate for men. We should note, though, that construction is not that much larger than the much bemoaned agricultural sector (usually pegged at 2 – 3% of GDP); that means, we should not write off agriculture’s potential to help make a difference to growth. Likewise, tourist arrivals, pre-pandemic, were well along the way to the sort of goals that were suggested by planners a decade or so ago. There is obvious room for growth, with tourism as a first growth driver. Close behind, are digitalisation and Geothermal Energy. But we should not overlook agriculture and other possibilities such as light manufacturing (bottled water for example) or even educational tourism.

The linked concern is, how hard the pandemic and lack of a sustained stimulus have hit struggling businesses, families facing income losses or gaps and our financial institutions with a one-two punch combo.  Let us see what we can do to help businesses and people who look to construction, tourism and the like. Of course, the cloud, that given a volcano crisis weakened economy the Civil Service is about half of employment, has the silver lining that the steady income probably cushioned some of the additional blows. But, we want growth, and growth led by the private sector.

That noted, the growth rate for 2019 also suggests that CIPREG should lay a basis for sustained, accelerated growth.  Is there need to mention, in a pandemic world, that a solid hospital is a key enabler for growth? That, in a digital age, solid education with good exposure to key technologies is another key enabler? That we will need training for the hospitality industry? That workers need somewhere to live? That public transport is important, as is access? Have we forgotten how many ways the ferry enabled the small business sector and facilitated travel for so many of us? That this last issue will be the subject of serious if not urgent review as to the motives and beneficial consequences for the disablement?

The high youth unemployment rate is of particular concern, and easily explains the problem of an annual emigration of graduates from our secondary school. We need growth sectors to draw in our youth and give hope for the future. That is in part, what CIPREG is about.

All of this, then draws attention to the missing stimulus.

Yes, missing. Montserrat is probably comparable to a small rural town in England or Wales. With something like £300 billion in pandemic stimulus on the cards, there was no good reason why we should not have had a much more significant intervention, given our pre-existing volcano-ravaged economy. Yes, CIPREG is important, but it is a medium-to-long-term measure. Bridging support is manifestly needed.

The UK acknowledges the legal force of the UN Charter, Article 73, so it should be feasible to negotiate for such a support package; those who tried to deride, dismiss and mock the relevance of this Charter have done us no favours. Let us now re-think and act on this key high card for negotiations. Yes, the UK is legally bound to promote constructive measures of development and to ensure our economic, educational, social and political advancement while respecting our culture.

For those negotiations, the UK’s own domestic support is an obvious yardstick, and social housing, road development and support to businesses and those facing hardships would be logical targets. Similarly, this is the time to make the point that we need to have a proper port development, with a breakwater. Not least, the UK’s domestic pandemic package shows that they know that in the face of a blow like this, failing to inject significant support would only enable a further economic down spiral. That holds for Montserrat, too, and so they must know that an inadequate aid intervention would predictably help to make matters worse. Especially, if it damages the capacity of our tourism sector. Our case for economic support is naturally quite strong. We must make it and we must show our capability and sound governance to build confidence that we can implement successfully.