FREE MARKET AND THE ANGUILLIAN – PROTECTING LOCAL BUSINESS

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Part 1

By Haydn Hughes m
Host of Klass FM’s On Da Spot with Haydn Hughes and former Member of Parliament
 

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The recent debacle over the unlawful withholding of a business licence that had already been issued to a company to provide for the sale of Wines and Spirits in Anguilla is troubling. This matter of protection of Anguillian- owned businesses is nothing new, but the question to be asked is, “Why the sudden interest by Ministers of Government in this particular matter?” Are any of the Ministers or their immediate families involved in such a business?

 

To gain an understanding, I went back to July 2009 when we in Anguilla learned of an agreement between the Government of Anguilla and the Chinese Business Network (CBN). The signed agreement was agreed between CBN and Anguilla. The present Chief Minister and Minister of Finance, Hon. Victor Banks was party to the agreement. It stated that one of the objectives of the agreement was for Chinese Business Network to assist in directing potential Chinese investment to Anguilla. This became an issue in the lead-up to the February 2010 general election, with the main Opposition Party, the Anguilla United Movement (AUM) led by Hon. Hubert Hughes, promising to “deal with the Chinese invasion into our retail sector”. The “Chinese invasion” of our retail sector had begun since in or around   2003, and continued unabated ever since.

 

It is no secret that Anguilla’s present Chief Minister is a believer in the free market. But what is the free market? It is described in Wikipedia as an economy where the government imposes few or no restrictions and regulations on buyers and sellers. In a free market, participants determine what products are produced, how, when and where they are made, to whom they are offered, and at what price—all based on supply and demand. Mr. Banks has articulated this belief for decades.

 

But there are many problems with the free market theory. For one, it is a pernicious theory. It is destructive, as it favours the strong prevailing over the weak and vulnerable. Protestors at the G8 summits air this out at every opportunity. We are aware that every jurisdiction has protections for its indigenous populations. Throughout the Caribbean it is so, and in Anguilla the 2010-2015 AUM government tried to make it so also. “Every country has restrictions, so why should Anguilla be different?” the leader of the AUM had argued.   Recent events in the USA show that economic giant, too, has concerns about protecting its economic space. A look at the US Presidential election proves that both candidates are proposing laws to prohibit foreign products, in particular from China, from entering into their retail space.

 

On coming to office in February 2010, the Government of Chief Minister Hubert Hughes gave me certain responsibilities including ensuring the delivery of a policy that could protect local businesses. There are those who believe that the protection of local businesses will stifle free market, especially in relation to our grocery stores,   but I have always begged to differ. For this reason, I took on the delivery of a policy as a special project, and conducted meetings with almost every single local business owner/representative in the sector, including those in the Wine, Beer and Spirit retail and wholesale sector. They described their challenges and freely gave their   proposals. I consulted with Cabinet, and together we came up with a plan of action. I then sought out the assistance of the Anguilla Chamber of Commerce and Industry (ACOCI). (As a matter of transparency, I am stating here that I am also a member of the Chamber because I believe in the principles and goals of the Chamber).

 

Together with the Chamber, the Principal Assistant Secretary in the Ministry of Finance, and the Trade and Investment Officer who helped with the technical work, we prepared a policy, and on multiple occasions took Memoranda to the Executive Council on this very important issue.

 

The memoranda   spelt out that as per section three (3) of the Trades, Businesses, Occupations and Professions Licensing Act, every person carrying on any trade, business, occupation or profession needed a licence in order to operate in Anguilla. The first and second Memoranda stated, “One of the Government of Anguilla’s important functions is to ensure that the business sector is operated in an environment where there is widespread opportunity, fairness and transparency. Beyond basic fairness, Government should foster a climate that encourages economic freedom and rewards success. Under such conditions, businesses thrive, employment increases, and everyday people do better. The fact that there are a plethora of business licence applications coming to the Ministry, even in these challenging economic times, suggests that the Government of Anguilla has succeeded in creating a pro-business climate and this should be commended.” The Memorandum went on to state that the Chamber must become an integral part of the issuance of business licences to ensure that local businesses thrived while ensuring fair play and protections for the consumers.

 

Both the former Governor, Mr. William Alistair Harrison, and the present Governor, Ms. Christina Scott pushed back hard on this initiative. Their argument was that it was discriminatory in nature, and that the Chinese were good investors offering jobs and opportunity for Anguillians. Mind you, the Memo did not speak to Chinese businesses, and the issue of discrimination raised by Her Majesty’s representatives was a moot point when you consider the British Government’s discriminating against our fellow Caribbean brothers and sisters by imposing on them visa requirements to enter Anguilla.   That aside, how many jobs and opportunities do Chinese businesses offer Anguillians?

 

Our community-minded entrepreneurs such as Albert Lake, Ashley Brooks, the Proctors, and the late Watkin Hodge have helped to develop the social and economic fabric of this island. (It is safe to say, the support has been reciprocal) Best Buy,   a newcomer by comparison,  has followed the long and noble  tradition of helping to elevate the community Can we say the same thing about the Chinese who have penetrated our retail sector for the past 13 years or thereabout?

For decades, our local retail sector has had to compete not only with themselves, but also with St. Maarten/St. Martin and San Juan,   and the one policy that would have protected them from unfair competition from foreigners on the home turf, was blocked.

 

The Memoranda and policy also sought to ensure that every business in Anguilla was part of the Chamber. This would give the Chamber and the local business community the sort of representation it truly deserved and remove the subvention from Government of somewhere in the region of EC$65,000 per annum. Had the policy been implemented, the Chamber would have become fully self-sufficient, been in a position to vet business licences, and would have had a meaningful say in the approval, or denial of licences.  That layer of vetting and transparency would have removed the sort of scandal that surrounds the recent withholding of the business license that I began this article with. What we proposed then was not unprecedented. Just take a look at what Chambers of Commerce are doing in our neighboring islands and even in matured economies.

 

The issue of ‘Fronting’ was also addressed in the policy/Memoranda. Amendments to the Business Act were suggested, such as the following:

 

  1. Inclusion of a schedule of business activities reserved for Belongers–This approach has been signed into law in the Turks and Caicos Islands. Under section 15, a schedule could be developed with input from the ACOCI, and passed into law as soon as practicable. Section 15 could be further amended to give the Governor in Council the power to make regulations limiting the number of business licences that could be issued to non-belongers.

 

  1. Amend Section 7 to give the Permanent Secretary in the Ministry of Commerce the option to disprove or deny a Licence after consultation with the ACOCI — As in the BVI, the Permanent Secretary could be empowered to disprove a licence. However, the reason for disproving the licence must be communicated to the applicant within seven (7) business days. Consideration could be given if the individual in question feels that the disproval is unreasonable.  The matter is subject to appeal to the Magistrate by notice of appeal in writing made within 30 days of the imposition of the denial.

 

Section 3.17 of the 2015 manifesto of the Anguilla United Front states, “Wholesale and retail trade will continue to be owned and controlled mainly by Anguillians. Policy will be implemented to maintain majority Anguillian ownership in the sector.

 

In the 2015 general election campaign, Mr. Banks stated that he would strengthen policies and laws that limited wholesale and retail trade mainly to Anguillians, restrict entry by non-Anguillian entrepreneurs, reform the business licensing system to maintain dominant Anguillian ownership in the sector, and work with the Chamber of Commerce on this matter. I would like to ask him if he was serious and if so, what did that mean to him?

 

The Government needs to move forward with this as promised. The policy which the AUM formulated and which two British governors stalled is still valid. If the British Government approves a failing banking resolution and an unrealistic budget for 2016, and cover up the clear-as-daylight evidence of his voters registration fraud, just to keep him in power, then he can get them to sign off on the policy and these important amendments, which will take the unethical behaviour and corruption out of the process of issuing business licences and ensure fair play and transparency.

 

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