Fiscal protocols could mark turning point
Kudos to Virgin Islands and United Kingdom leaders for reaching an agreement that promises to reform the territory’s flawed system of fiscal management from the ground up, increasing transparency and ultimately leading to better governance.
If properly implemented and diligently applied, the Protocols for Effective Financial Management could represent a turning point for the territory. The agreement — most of whose provisions are currently under consideration in all of the UK’s Caribbean territories — includes a variety of beneficial measures, many of which we have long advocated on this editorial page.
Moreover, the protocols are not just talk: They call for specific and quantifiable steps, such as updating the Public Finance Management Act 2004 by August 2012. Many of the VI’s most urgent fiscal needs are addressed by the protocols’ requirements:
• medium-term planning;
• regular reporting in the House of Assembly on fiscal and economic matters;
• measuring fiscal and economic performance with “timely and accurate” statistical data;
• ensuring value for money through a variety of mechanisms;
• carrying out “robust” cost-benefit analyses of all capital projects;
• subjecting all capital projects to a tendering and procurement process “that guarantees the highest levels of transparency and fairness practicable;” and
• carrying out and publicising in-depth evaluations of major projects, to name a few.
The protocols, then, appear to be a major step in the right direction. However, if the new measures are to be effective, the VI and the UK will have to work together to ensure that they are properly implemented. Too often here, well-meaning legislation and policies are passed and then ignored or selectively enforced. This must not be allowed to happen in this case.
Presumably, the UK will help to monitor the situation, but we agree with Premier Dr. Orlando Smith that the protocols don’t represent a heavy-handed tactic by a “big brother” country. On the contrary, the promised measures are steps the territory should be taking on its own, regardless of the UK’s level of involvement.
Moving forward, the new government should not stop with this week’s agreement as it keeps its campaign promise to work toward greater transparency.
Other measures are urgently needed. For example, all contracts should be made public. Currently, petty contracts up to $100,000 are typically inaccessible, a system that has led to a wide variety of fiscal irresponsibility.
Legislators should also fix the Register of Interests. We were chagrined to read in the latest Standing Finance Committee report that the register is a blank book. This, because lawmakers have not updated the Standing Orders to conform to the territory’s 2007 Constitution, in spite of repeated urging from the registrar of interests since February 2008.
The new government should rectify this embarrassing situation immediately, and then open the register to the public.
Complemented by such changes, the Protocols for Effective Financial Management could very well mark the start of a new era in the VI. They appear to represent a much-needed step towards financial transparency in a territory where important decisions about public spending all too often have been made behind closed doors.