Categorized | Editorial, Local

What is the complexity in managing Montserrat’s finances?

Editorial – April 12, 2013

It must be indisputable that Montserrat’s economy is one of the smallest there is in the world, but not having access to an economist, since we are unable to pay for one, we can present very little professional argument one way or the other. So here is a call for help, when  perhaps we can get the respect the people deserve when they make observations about the standard of the economy or how the country is managed.

With a recurrent budget of just around EC$100 million, equivalent to US$37 million, we wonder what size business this equates to in any one of the developed countries, let’s say the US or the UK, and even the region. Our Premier seems to take pleasure in drawing comparisons, seldom with our neighbouring islands when he discusses the island’s finances.

Anguilla’s last approved budget in December showed recurrent budget as follows: Recurrent Expenditure – EC$188.12 million, an increase of 4.61 million over the 2012 budget; Recurrent Revenue – EC$ 193.1 million, an increase of 3.9 million over the 2012 figure; and Capital Expenditure – EC$ 32.6 million.

Montserrat shows Recurrent Expenditure – EC$ 100.50 million, a decrease of 0.82 million over the 2012 budget; Recurrent Revenue – EC$ 100.50 million, representing a balanced budget with local revenue of EC$ 44.72 million and DFID support of EC$ 55.78; and Capital Expenditure – EC$ 78.53 million.

Anguilla’s population is three times that of Montserrat’s. The population difference is well known and the difference in the budgets tell a story especially where the capital budgets are concerned. Montserrat is building a new country, agreement to that reached since 1996, began in 1998 and confirmed in 2008. Five years later in 2013 Montserrat is looking for the funding to solve its elusive number one economic problem of access to help tourism get moving.

At the Governor’s most recent press conference at which the DFID local rep was present our attempt to understand the DFID review team of Montserrat budgetary requirements, past, present and future, we ran into what was either an attempt to avoid addressing the scathing report on Montserrat’s budgetary management, or a cover up of the real issues.

We noted to the Governor that him being responsible for the public service, any time he advertises to fill a post in the Governor’s office, it is very quickly accomplished. The DFID rep joined in the response and we sought explanations on DFID’s concern that Montserrat only accesses 30% the technical assistance offered by them and the expectation of competent performance  when key posts continue to be unfilled for years now.

When we asked the question upon hearing the excuses rather than efforts to solve the problem, as to what preparations are made to have young people trained to take up these positions, we hear that it is Montserrat who does nothing, since adequate funding is provided by DFID.

We really have difficulty understanding the complexities of managing a balanced budget, but realise that something seems very wrong with the size of the local revenue collected. DFID, we note expects that when they provide moneys for wages, salaries, capital expenditures, for infrastructure, housing, etc. those funds should provide returns for government, not just through indirect, but direct tax returns.

We seem not to understand that “Increasing unemployment levels place further pressure on public sector funding in terms of benefits and loss of taxation revenue.” The unemployment levels are also reflected in the retrograde and dishonest way we spend money within Montserrat, whether it is project funds, or just accessing service. This problem does not only exist in Government but with businesses also and to less extent the consumers in general.

There are some issues Montserrat does not have to worry about. The UK government has shown and even  promised we do not have to borrow, because they constantly seek to bridge the shortfall between income and expenditure, which otherwise would create a problem with debt as a percentage of GDP.

Montserrat the size of the population notwithstanding has the same problems of demanding ever better public services (primarily in health and education) but, at the same time, the benefactors want to see reductions in public expenditure.

What we hear about now is the new thrust in the strategic development plans, memorandum of understandings, development strategy plans and matrices. What is agreed is the lack of proper communication of plans and everything that is happening. We expect that by time this newspaper issue is on the streets, we will hear just what the future looks like after a trip to seek investors to get the future moving. Of course none of that will be meaningful, if the current attitude of looking after the handful doesn’t change.

 

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Editorial – April 12, 2013

It must be indisputable that Montserrat’s economy is one of the smallest there is in the world, but not having access to an economist, since we are unable to pay for one, we can present very little professional argument one way or the other. So here is a call for help, when  perhaps we can get the respect the people deserve when they make observations about the standard of the economy or how the country is managed.

With a recurrent budget of just around EC$100 million, equivalent to US$37 million, we wonder what size business this equates to in any one of the developed countries, let’s say the US or the UK, and even the region. Our Premier seems to take pleasure in drawing comparisons, seldom with our neighbouring islands when he discusses the island’s finances.

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Anguilla’s last approved budget in December showed recurrent budget as follows: Recurrent Expenditure – EC$188.12 million, an increase of 4.61 million over the 2012 budget; Recurrent Revenue – EC$ 193.1 million, an increase of 3.9 million over the 2012 figure; and Capital Expenditure – EC$ 32.6 million.

Montserrat shows Recurrent Expenditure – EC$ 100.50 million, a decrease of 0.82 million over the 2012 budget; Recurrent Revenue – EC$ 100.50 million, representing a balanced budget with local revenue of EC$ 44.72 million and DFID support of EC$ 55.78; and Capital Expenditure – EC$ 78.53 million.

Anguilla’s population is three times that of Montserrat’s. The population difference is well known and the difference in the budgets tell a story especially where the capital budgets are concerned. Montserrat is building a new country, agreement to that reached since 1996, began in 1998 and confirmed in 2008. Five years later in 2013 Montserrat is looking for the funding to solve its elusive number one economic problem of access to help tourism get moving.

At the Governor’s most recent press conference at which the DFID local rep was present our attempt to understand the DFID review team of Montserrat budgetary requirements, past, present and future, we ran into what was either an attempt to avoid addressing the scathing report on Montserrat’s budgetary management, or a cover up of the real issues.

We noted to the Governor that him being responsible for the public service, any time he advertises to fill a post in the Governor’s office, it is very quickly accomplished. The DFID rep joined in the response and we sought explanations on DFID’s concern that Montserrat only accesses 30% the technical assistance offered by them and the expectation of competent performance  when key posts continue to be unfilled for years now.

When we asked the question upon hearing the excuses rather than efforts to solve the problem, as to what preparations are made to have young people trained to take up these positions, we hear that it is Montserrat who does nothing, since adequate funding is provided by DFID.

We really have difficulty understanding the complexities of managing a balanced budget, but realise that something seems very wrong with the size of the local revenue collected. DFID, we note expects that when they provide moneys for wages, salaries, capital expenditures, for infrastructure, housing, etc. those funds should provide returns for government, not just through indirect, but direct tax returns.

We seem not to understand that “Increasing unemployment levels place further pressure on public sector funding in terms of benefits and loss of taxation revenue.” The unemployment levels are also reflected in the retrograde and dishonest way we spend money within Montserrat, whether it is project funds, or just accessing service. This problem does not only exist in Government but with businesses also and to less extent the consumers in general.

There are some issues Montserrat does not have to worry about. The UK government has shown and even  promised we do not have to borrow, because they constantly seek to bridge the shortfall between income and expenditure, which otherwise would create a problem with debt as a percentage of GDP.

Montserrat the size of the population notwithstanding has the same problems of demanding ever better public services (primarily in health and education) but, at the same time, the benefactors want to see reductions in public expenditure.

What we hear about now is the new thrust in the strategic development plans, memorandum of understandings, development strategy plans and matrices. What is agreed is the lack of proper communication of plans and everything that is happening. We expect that by time this newspaper issue is on the streets, we will hear just what the future looks like after a trip to seek investors to get the future moving. Of course none of that will be meaningful, if the current attitude of looking after the handful doesn’t change.