Dominica

Just last week Dominica gave $12 million to Anguilla?  It is general elections time in the Commonwealth of Dominica.  So, you cannot believe everything you read in the Dominica newspapers at this time.  What I read with a degree of astonishment and disbelief in the Dominica News Online was that Dominica, one of the poorest countries of the Commonwealth Caribbean, has just “given” Anguilla $12 million out of its hard-earned savings and out of the goodness of Prime Minister Roosevelt’s Skerrit’s heart.  Dominica in 2006 is reported to have had a GDP per capita of $4,758, while Anguilla’s was $8,310.00.  You would not easily have concluded that Anguilla could be helped financially by Dominica.

These reverse alms from the poor man to the rich man would be an outrage against common decency, if the story were true.  The people of Dominica need schools, hospitals, roads, and libraries.  Would the outgoing Dominica government, struggling to be re-elected, take its hard-earned savings and loan them to Anguilla, with a significantly higher per capita GDP?  The Chief Minister not long ago was boasting that he was the highest paid head of government in the OECS.  Why would poor little Dominica do such a thing for Anguilla?  Would their government, going into a general election, draw down funds from the ECCB, that it could well use for the development of Dominica, to bail out the government of Anguilla?  I cannot readily believe the story to be true.

PM Skerrit jokingly says that he “gave” the $12 million to Anguilla.  He must be very confident of his support by the electorate in Dominica to have made such an irresponsible assertion.  We have to assume that he is conspiring with the government of Anguilla to hide from the Central Bank the fact that he is merely loaning, not giving, the money to Anguilla, a country that has exceeded its borrowing powers, and is unable itself to make this borrowing.  It is amazing that he can be so confident that the people of Dominica will really be happy about such a state of affairs.

Yet, you can listen to an audio recording of PM Skerrit making just that claim right here:

As usual, it was a pleasure to tune in to Haydn Hughes’ call-in radio programme On the Spot last night, which dealt with this news.  Independent candidate Sutcliff Hodge was one of his guests.  Their discussion was pretty thorough, but I thought they missed raising a couple of important points.

If this was a loan, was it authorized by a Resolution of the Anguilla House of Assembly, as provided for in the Financial Administration and Audit Act?  Why is this Resolution important?  Because this is the mechanism designed by law to ensure transparency in public borrowing.  This is how the people consent to government borrowing money that we, the people, will have to repay one day.  The government of Anguilla is prohibited by law from borrowing any money that has not been authorized by the House of Assembly.  This is what section 38 says:

Authorisation of debt

38. No money shall be raised on the credit of the Government except under the authority of this or another Act of the Legislature or of a resolution of the House of Assembly.

If this loan was not authorized by law or by a Resolution, is it not an illegal loan?  If it is illegal, who committed the offence?  Will there be any repercussions?  Will the auditor take it up for comment within the next five or six years, as is par for the course up to now.  And, if and when he does, will it not then be too late to make anything of it, as is usual, since by the time the audit report is published another administration will be in office?

I always had my suspicions that the famous British contingent liability was a figment of some bureaucrat’s fevered imagination.  Is this scorning by Anguilla of the long breached guidelines, put in place precisely to safeguard Britain’s contingent liability, further evidence of the spurious nature of this alleged liability?  Or, is it just evidence of hubris on the part of our Minister of Finance?  Does he believe that he has become all-powerful, and can do as he wishes with the public purse?

For what purpose would the money be borrowed?  The standard answer is to meet government’s commitments, of course!  Elections in Anguilla are around the corner.  Could the thinking be that a Christmas bonus must be paid, despite the economic downturn, if the public servants are to be kept mollified in order to ensure their support when the day for voting comes?  Never mind the piling up of public debt upon debt, that will be for someone else to sort out, after the general elections.

If true, the further fear must be that this unauthorized borrowing may just be the tip of the iceberg.  Are there other secret borrowings and commitments that our out-going government has obligated our new administration to settle in the new year?

May I wish everyone a Super Solstice!