Borrowing still

Did Anguilla really need to make this borrowing?  There is an interesting question and answer exchange in the House of Lords concerning Anguilla in this morning’s sitting.  Lord Jones of Cheltenham, a Liberal Democrat peer, had posed the following written question to the British Labour Government:

To ask Her Majesty's Government why the Government of Anguilla have not received their European Development Fund tranche 3 payment, due by 31 December 2009; and what steps they are taking to ensure it is paid.

Baroness Kinnock of Holyhead, a Labour peer, responded:

The European Commission has authorised the disbursement of funds for Anguilla's third tranche of budget support under European Development Fund (EDF) 9 for €2.31 million. Anguilla should receive the funds shortly. There is no set timetable for the disbursement of EDF. Overseas Territories can request disbursement of each tranche of funding once they have implemented the conditions set out in the financing agreement between the European Commission and the territory. Although Anguilla's original request was sent in April 2009, the Commission did not receive all the associated paperwork from Anguilla until early January 2010.

The Minister for the Overseas Territories wrote to the Commission in July 2009 noting the delays in the disbursement of funds under EDF and urging the Commission to expedite their assessment of funding requests. Officials remain in regular touch with the Commission about the disbursement of funds.

Personally, I find this response very revealing.  It would appear that we had applied for this third tranche of €2.31 million in April 2009.  That is nearly a year ago.  It then appears that we failed to complete the associated paperwork until early January of this year! 

That extraordinary delay suggests to me that there is perhaps nothing urgent about this borrowing.  However, I did a search of The Anguillian to see if there was a recent reference to an EDF loan.  I came across an article in the issue of 14 September last.  It appears to explain what this loan is all about.  It reads in part:

Perin Bradley, Trade and Investment Officer, who spoke on the Government’s financial options on Friday, said the loan of 49 million dollars which was being sought, was intended to pay the Government’s overdraft of 20 million dollars, take care of some other debts, top up the reserve fund and pay outstanding loans owed to CCB and NBA to the tune of 7.4 million. He said a 20 million dollar loan from the Eastern Caribbean Financial Holdings would be used to finance the required safety end at the airport and the balance of 24 million, from the European Development Fund, would go towards the Government’s reserves.

The article does not explain which institution is granting us a loan of EC$49 million.  However, it is clear that the EDF loan is intended to go towards the Government’s reserves.  That is very vague, so vague as to be meaningless to a mere layman like me.

There is an interesting little side play here.  A British Liberal Democrat peer living in England is not likely to have such familiarity with Anguilla’s financial affairs to be able to ask such a question on his own initiative.  I surmise that some Anguillian politician who has become acquainted with Lord Jones prevailed on him to ask the question in an attempt to embarrass the Europeans into hurrying up the funding.  The reply of the Labour Peeress ensured, ever so politely, that the embarrassment fell squarely where it belonged: on the Anguilla Ministry of Finance which had apparently failed to send off the required paperwork to comply with the EDF requirements for disbursement.

Are you, look a wuk!