October 9, 2020
The financial position of the Turks and Caicos Islands government and the economy has worsened. Under the leadership of the minister of finance Sharlene Robinson the country has lost an enviable opportunity to finance its growth and development and avoid a recession and is now facing British government intervention in its finances.
Total imports and revenue from imports were down 50% in the first quarter and estimated 62% in the second quarter of the financial year according to recently published data by the statistics department. This decline in revenue and economic activity without a firm response from the minister of finance has placed TCI in a precarious position says well-placed sources in London.
Such that “the Foreign, Commonwealth & Development Office (FCDO) are considering intervention and has put all financial support for TCI on a conditional basis given the severity of its financial performance over the last six months and have drawn up initial contingency plans to step in and take over the ministry of finance as a first step,” the source explained, “further intervention is being considered and offered to TCIG as ‘support’ in the ministry of health to help plan TCIG’s response to the pandemic.”
Information stated at a press conference held in September by the minister of finance cannot be verified due to the non-publication of the monthly financial reports. While the financial reports are missing for the months August and September sources say the British government is said to be concerned about its contingent liabilities which has now skyrocketed into the hundreds of millions due to the ineptitude of the minister of finance and the reluctance on her part to act in a timely manner regarding borrowing.
The FCDO are now looking at what tangible steps it could take to right the ship before the TCI blows through its framework and financial guidelines which are enshrined in legally binding agreements with the TCI government. As previously reported, the FCDO were reluctant to step in and re-appoint the chief financial officer (CFO), however, those plans have now been altered to include all actions for consideration. A delay of elections and interim measures have not been ruled out but are being considered carefully by those responsible at FCDO. The British government has indicated to TCI officials a need for tax measures and austerity to support any major borrowing at this late stage in the life of this People’s Democratic Movement (PDM) government.
The procrastination and slow-footed response of the minister of finance has eroded a golden opportunity to put the TCI on a firm economic path with a strong cash position by early borrowing before the pandemic set in. Instead, the minister of finance failed to act and has put TCI and the public in a jeopardizing position.
It is said that the government is holding out for a resumption of the tourism industry to gauge a return of economic activity with most major hotels set for re-opening. Most workers in the hotel industry are out of work with estimates of over 50% of the population, and the rest of the economy out of work or underemployed due to the shutdown from coronavirus.
A major hospitality stimulus package was presented by the minister of finance in March but only passed by the government in April, granting mostly foreign workers $1,200 per person, while leaving out most of the Belonger population, leading to mass criticism and protests from a population who felt cheated.
Some persons are still waiting on these first stimulus payments as the government has less than $20 million in available cash on hand and are beginning to delay certain payments. A new stimulus package was announced early in September granting $600.00 to out of work Belongers in all sectors of the economy, as an unemployment benefit. They must register with the labor department and apply for consideration.
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