EDITORIAL – Minister Archer on target with public debt

Finance Minister Marco Archer

Because of Finance Minister Marco Archer’s attempts to guide the Cayman Islands government out of debt, local taxpayers have accumulated a new kind of debt — of gratitude.

U.K. Minister James Duddridge, who has responsibility for overseas territories, wrote a letter congratulating Premier Alden McLaughlin and his government for improvements to the financial performance of Cayman’s public sector, notably the growth in available operating cash, exceeding a requirement of the U.K.’s Framework for Fiscal Responsibility.

Minister Duddridge said, “This is a welcome achievement and a credit to the hard work and professionalism of your government and the civil service.

“A resilient fiscal outlook is a fundamental building block for the continued prosperity of the Cayman Islands.”

Hear, hear.

To Minister Duddridge’s applause, we add our own. Government’s financial statements contain clear evidence — in black and white, as opposed to red — that in terms of its bottom-line budget, the public sector appears to be on the right path and traveling in the proper direction (forward). As Minister Duddridge said, these are the results of a group effort, and credit should be spread among Premier McLaughlin, his government and the civil service.

But we’d like to bestow singular praise upon Minister Archer, who through his actions rather than words, and diligence rather than bombast, is creating for himself a reputation as a formidable and responsible public servant, in the truest sense of the phrase. Prior to being elected to office, Minister Archer had been an attorney for a local law firm and before that a member of the civil service. He has applied his experience in the public and private sectors to his duties as government minister, and his performance has been exceptional.
Minister Archer may not be a flashy politician who utilizes populist rhetoric to whip a crowd into a frenzy — his usual tool of the trade is a ballpoint, rather than a bullhorn — but that doesn’t mean his achievements are going unnoticed in the community. In particular, Minister Archer is highly regarded in the financial services sector. (It’s a good sign when the country’s accountants number among the fans of the government’s chief budget maestro.)

In the few short years he has held office, Minister Archer has managed to undo a lot of financial damage that was done to the public treasury by previous administrations, including the first People’s Progressive Movement government, which racked up enormous debts that were left on the laps of the following United Democratic Party government.

Despite the outstanding progress that has been made, Minister Archer (and whoever his future successor may be) still faces considerable challenges. First — and this was alluded to in Minister Duddridge’s letter — there is the matter of the repayment of a $261 million “bullet loan” that is due in November 2019. (The loan stems from 2009 borrowing by the UDP, which, according to then-Premier McKeeva Bush, occurred in order to pay off recurring expenditures left by the PPM, which had accumulated a one-year operating deficit of $81 million.)

The bullet loan payment is squarely in Minister Archer’s sights. More than $18 million has been set aside for that purpose, and Minister Archer says he hopes that most, if not all, of that debt can be paid off in 2019. (If you think Minister Archer has been steeped in praise in this column, just wait and see what is written if that near-miraculous event happens.)

The elephant in the budget writers’ room remains, of course, how to make up for the estimated $1.2 billion in unfunded liabilities to deliver public healthcare services over the next 20 years. Time will tell, but that may be a task too tall for even Minister Archer to tackle at the present moment.

After all, Minister Archer may be a wizard with public finance, but, unlike Rumpelstiltskin, he can’t create gold out of straw.