Anguilla's Slow Recovery

The US swiftly recovered from the 2008 financial crisis mainly due to quantitative easing, when the US Treasury printed hundreds of billions of dollars to pump into the stock market. In Britain the Bank of England printed money for government to buy up the failing UK banks. By contrast, in Anguilla the Eastern Caribbean Central Bank and the local government stood by as the two domestic banks continued to lend hundreds of millions of dollars to borrowers who would never be able to repay their loans  The shareholders had no idea what was going on.

The National Bank of Anguilla (NBA) was held by 4,000 shareholders in an island with a population of 14,000. In 2008 its assets stood at over EC$1 billion. That was the last year the bank held an Annual General Meeting of its shareholders.

In 2008 Flag Luxury Resorts, the major real estate development company on the island, collapsed. When its 400 workers were sent home, approximately 25% of the private sector became unemployed overnight. Loans that had previously been faithfully serviced immediately became bad loans.

2008 was the last year that NBA published its accounts. No annual general meeting was held after that date. It was rumoured the Central Bank had rejected the company’s accounts. No explanation was forthcoming.

In 2013 the Central Bank moved in on NBA and another private bank putting them into conservatorship. The uncomprehending islanders were told it was to save the banks. Local deposits were safe. By contrast, the international depositors in the seized banks were not so lucky. They had no access to their funds amounting to many tens of millions of US dollars. The result is expensive litigation in the courts of Anguilla and New York.

In 2016, government announced its banking solution. The good assets of the two banks were transferred to a new bank with government as its sole shareholder. The bad assets were transferred to an asset management company which would try to collect.

Prudential guidelines mandate that no more than 5% of bank loans are permitted to be in default. By the time the Central Bank moved in 2013, some 50% of NBA’s $1 billion in loans were non-performing. At all times, the board of directors were well aware of this. Only one of them resigned.

When asked why they had taken no steps to collect on the bad loans before the Central Bank moved in, the directors privately explained they were between a rock and a hard place. If they wrote off the bad loans and placed the debts in the hands of the lawyers, half the capital of the banks would be written off. The sale of the loan securities would ruin the defaulting borrowers. The borrowers were their ex-schoolmates, if not their brothers and sisters  With the collapse of Flag, the market for real estate was depressed. Nothing could sell. Further, the law protecting borrowers was so restrictive that the banks had no chance of selling the securities to repay the bad debts. That was the rock. The alternative was to continue as before, hope the economy would turn around, and all the bad debts would become good once again. This was the hard place. The banks might be lost, but there was no downside for the directors personally. They chose this option.

Up to today, not even the names of the major defaulters are published so fingers can be pointed. They continue to sit in the front pew in church, and to take the head of the table at social events.

It gradually dawned that there was no question of punishing any of the management or the directors of the two closed down banks. Whatever investigations took place, government kept the results secret. We were told that people’s banking business was confidential. The result was that no one went to gaol. No one got sued. After all, any negligent bank officers and directors are close family and associates of legislators, ministers, Permanent Secretaries, and senior police officers. There will never be any report on who was to blame for Anguilla’s fall from financial grace. No one will ever be punished for the loss of the banks.

Gradually a palpable sullenness has come to dominate the mood of most Anguillians. The lack of confidence of Anguillian society in its leadership is as thick as cold porridge.

We hear on the radio complaints that the EC$800 million public debt will burden generations-to-come. We hear from lawyers that the confiscation of the international depositors’ funds will kill confidence in Anguilla’s banks. Anguillians’ eyes glaze over as we listen even without taking it in.

We hear the loudest voices on radio talk-shows warning of coming Armageddon. Loudmouths spout obviously made-up conspiracy theories. Some of the worst of the defaulting borrowers have led what little protest there has been against the way government took over the banks. Their brazenness contrasts with the humility of the average Anguillian left to contemplate the unexplained loss of their nest eggs of investment.

Meanwhile, Anguillians who previously held EC$1 billion in bank capital now hold worthless shares in the old banks that have been stripped of their assets. Only the receivers benefit from the continuing liquidation of the two banks at the rate of hundreds of US dollars an hour. Soon there will be nothing left. The 5,000 Anguillians who held some EC$30 million in an earlier failed investment company promoted by NBA can only shake their heads in pain as the directors continue to pretend to be directing.

In September 2017 Hurricane Irma wiped out our private and public infrastructure. The total damage suffered is estimated to be close to EC$900 million dollars. Anguillians got up and dusted ourselves off  Mainly using our private resources, we rebuilt our private properties. We were called resilient. Perhaps we were just numb from the earlier financial beating we suffered. We shareholders lost a billion dollars with the 2013 collapse of NBA alone.

Local hardware stores and supermarkets become more and more run-down, as Chinese financed replacements flourish. Since 2008 several hundred Chinese migrants appear to have benefited from our liberal work permit policy. On every street corner, new Sports Bars bearing bright signs illustrated with paintings of scantily dressed ladies on them flourish. They employ large numbers of desperate Venezuelan and Santo Domingo girls imported with the permission of an acquiescent government. Disillusioned Anguillians walk past these new business opportunities every day on our way to church or work.

The one bright star was the Social Security Fund. The Board holds the monies in the Fund in trust for the workers of Anguilla to whom the benefit of the monies belong. The monies are to be invested so the fund grows and produces profits for future generations to benefit. The most sacred duty of a Social Security Board is to protect the Fund against attempts by desperate governments to dig their shovel into it  Government has an unlimited number of worthwhile projects for the public good that need funding.

So, it was as if an anaesthetising hypodermic needle had been inserted into our collective spines when earlier this week we heard a government minister claiming proudly on radio that he had convinced the Anguilla Social Security Board to let him have $5 million (US or EC was not revealed) of the Fund to invest in purchasing private land to enlarge his favourite public project in his constituency. The Board has not confirmed this is true. The Board has not said it is not true. Clearly such a use of Social Security funds will produce no income and is not a real investment for the benefit of the workers. Even though the payment was legal, it is a shocking betrayal of the workers. It is a dangerous precedent. This is how the run on Social Security starts. It starts with $5 million. Then, $10 million is needed for something else. The law is changed to make it possible. Anguillians are paralysed by fear at the prospect. If the Fund can be so easily dipped into by one smooth-talking minister, then nothing in Anguilla is sacred any longer. All is lost.

Now government has announced that it has committed to selling the major part of its shares in the national electricity company, the water company, and the new bank. These are all exciting new opportunities we are told. We shake our heads in disbelief on hearing this. The blows we have received over the last decade have drained us of resources. We have no money left over to invest in these projects. We are not just dispirited, we are gutted.

It is incredible that anyone would believe that Anguillians would take another chance of investing our remaining savings in any local public company ever again. The Chinese will have to be invited in if government is to have any chance of unloading its shares.

 

Is Anguilla Civilised?

An update to the brothel blog of a few days ago.

In addition to her photographs and the comments to them, Ms Soncini has published an article on brothels in Anguilla.  I invite you to read it by clicking on the link.  Then, click on the tab in the left-hand margin, “English Version of Published Article.”  It is very instructional.

Since I published my article on brothels in Anguilla, I have been getting feedback.  One Jamaican lady in the bank line with me this morning mentioned that Pam Webster brought up the matter of my article in some recent meeting of the House of Assembly.  According to the lady, Victor protested that (a) most of the article was not true;  and (b) he saw nothing wrong with prostitution, as it existed everywhere and at all times.  I don’t know, I did not hear the broadcast.

Of course, my article was not about prostitution.  It was about illegal brothels.  It is about the failure of the authorities to prosecute those involved in managing them and profiting from the business.  It is about the exploitation in brothels of these foreign victims by Anguillian men.

A couple of nights ago, Minister Cora Hodge, phoned me to express her concerns.  I learned that the Immigration Department has, in fact, carried out three raids on illegal brothels, not one, as a result of which several more women have been deported.  (It was very kind of her to take the time to respond to my concerns, something she definitely was not obliged to do.  I am very grateful to her.)

My response to the Minister was that her Ministry had very poor PR if there have been three raids in all.  I have never heard of any raids on houses of prostitution except for the one raid (which I got in writing from a senior police officer).  The other two raids must be very recent, maybe even subsequent to the publication of my article.  I urged her to have someone write and publish a press release explaining to the Anguillian public what the Ministry of Home Affairs has accomplished in dealing with the illegal brothel problem.  It is not acceptable to keep sweeping this matter under the carpet.

The Minister did not seem to realise that what is really sad about merely deporting the foreign girls is that the only persons who are made to suffer from the criminal activity of the men who run the brothels and live off the proceeds are the female victims themselves.  They are not treated as victims but as criminals and deported.  They are doubly punished for their poverty and helplessness.  The men, by contrast, only have to wait until the replacement girls arrive to continue their connivance at their exploitation.

Minister Hodge further advised that the Ministry has found a solution to the large numbers of these women and girls working in Anguilla.  They have introduced a visa requirement for Venezuelans.  They have reduced the visa time to just one week.  What use is that, I ask?  My information is that the Anguillians involved in this trafficking frequently bring the girls in at night, illegally, at Sandy Hill and Little Harbour bays, landing them on the beaches.  When they enter Anguilla that way, no one asks them about their visa.  

The brothel activity is not reducing as a result of these three raids.  The Jamaican lady mentioned earlier told us that she lives in Blowing Point, and two new houses have opened up since the hurricane, right near to her home.  She told us that the demand for new girls is growing such that plane trips to Santo Domingo are now being arranged to bring back new stock.

My second problem with this so-called “solution” or “remedial action” is that this visa requirement only accomplishes two things I can see.  One, it ensures there is a steady supply of fresh girls imported into Anguilla.  The result of this “remedial action” is that the men who frequent these places have new victims once a week instead of once a month.

Two, all one week visa policy achieves is an increase in government’s revenue from granting the inevitably requested visa extensions.  This new visa policy makes it look like the government of Anguilla is knowingly participating in brothel keeping and living on the proceeds of prostitution.

One correspondent commented on the original Blog:  “Remember when Anguillian men went off to Macoris and other places, well you know what happened, men being men and being away from their wives, well, boys will be boys and that sort of behavior resulted in lots of babies, which came to Anguilla to claim their birthrights, and with them they brought their culture which includes Bodegas and brothels.”

To which I responded that we need to be careful not to seem to adopt the usual, false, weasely, Anguillian, fall-back excuse that all these wrongs are caused by the foreigners in our midst, especially the “Spanish”, and not by real Anguillians.  The truth is that brothel keeping in Anguilla is principally an affair of native Anguillians.  So, the particular family who own the houses in question may not personally run them.  But, they knowingly rent out their premises to these brothel keepers.  They are as much living off the proceeds of prostitution as Liliana, shown in the Ms Soncini's photo blog.  It is the same with many of the other “Sports Bars” throughout the island.  They are owned by native Anguillians who are happy to live off the proceeds of prostitution while hiring others to do the dirty work.

My worry is that a lot of us in Anguilla (mainly the men) are in denial about the consequences of this growing illegal and unhealthy business on our society.  The church is silent in the face of their most prominent members being participants in this business.  The National Council of Women appear to have had their balls cut off.  Members of the Mothers’ Union can be said to have deteriorated to a state of decrepitude.  Seventh Day Adventists appear happy to argue only about the correct Sabbath Day, while ignoring the pain and suffering their members bring to these exploited girls and women.

Mind you, like Victor’s alleged assertion, I have no problem with prostitution.  Everyone has a right to sell his or her body for sex, ONCE they are an informed and consenting adult.  But, we know the hazards to health and welfare that exist where this behaviour is conducted in houses that are not regulated and licensed.  (I will let others more qualified than me in matters of morality worry about that aspect.)  Some of these women are not consenting adults.  Some are under-age.  Others have been trafficked, meaning to me, tricked, beaten, and exploited.

Unlike with licensed brothels in St Maarten (if they still exist), the workers in Anguillian whore-houses are not medically examined on a weekly basis.  Diseases such as Syphilis, super clap Gonorrhea, Chlamydia, HPV and Genital Herpes, among others, are being injected into our families when the men come back home from these houses.  Limiting the visa time for these women to one week is not going to have any impact on the rate at which STIs are introduced into our society.

Obviously, because they are illegal, these illegal whore-houses are not examined by the public health department to ensure the conditions are sanitary.  The derelict buildings that are used for this trade, (as demonstrated in Belinda Soncini’s photo-blog) and the second-hand mattresses that the customers lie on seemingly in the abandoned villas at Mariners Hotel at Sandy Ground and elsewhere remain vermin infected.  This is an appalling way to treat these women, as if they are dogs without rights, barely human beings at all.

Because these houses are illegal, the sex workers are not protected in the event they are raped, beaten and even killed as happened recently.  The result of this free for all is that children are trafficked to Anguilla as sex workers.  Without protection of law, we can expect that most of their money is taken away from them (not least in paying officials for protection).  Their passports are confiscated by their pimps and managers, so they cannot escape the island, even if they are so desperate as to ask directions to the nearest police station.

The conduct of these Anguillian men who condone this “Sports Bar” business is disgusting, and would be unacceptable in any civilised country.

This begs the question: Is Anguilla a civilized country?