Editorial
Saving Montserrat
Saving Montserrat
Montserrat was called the "Emerald Isle of the Caribbean," but a volcano exploded and destroyed half the island. National Geographic's "Explorer" television show featured the "Violent Volcano" on March 22. You can see the full Monty at the Montserrat Government's Volcano News Site at Michigan Tech University: http://www.geo.mtu.edu/volcanoes/westindies/soufriere/govt/ For general information on Montserrat see www.montserrat.org and www.clark.net/pub/innanen/montserrat/index.html, and for the local newspaper see www.montserratreporter.com
This small British territory in the Leeward Islands is an excellent candidate for incentive-based public finance. Recovery is now threatened with impending doom as insurance companies, not willing to insure new construction, are abandoning the island. After the eruption of the Soufriere Hills volcano in July 1995, the southern half of the island, including the old capital, Plymouth, was abandoned. Most of the 11,000 residents left the island, leaving a population of only 3000. The remaining displaced residents moved to the northern third (the "Northern Zone"), the only habitable area. With British assistance, some new homes are being built. But without insurance, banks won't lend funds for mortgage loans, which blocks new private construction.
The insurance companies say they cannot afford to provide coverage. Despite a statement by British Foreign Secretary Robin Cook in January 1998 (prior to his visit in February) that Her Majesty's Government remains committed to the future of the Montserratians, the British government has declined to underwrite the insurance. A plan is being considered to form an insurance pool for new policies, but the insurance companies claim that this too would not be profitable without British backing.
The people of Montserrat have obtained over £ 50 million from the British government, as well as assistance from private charity. A "Music for Montserrat" concert was held in London in 1997, which raised £ 500,000. The island's Governor Anthony Abbott presented some of the funds to a school and to the Montserrat Red Cross. Such assistance helps individuals and restores public institutions, but the island also needs a sound commercial basis for the recovery of private industry and homes. Chief Minister David Brandt, speaking at the ABS television program "Justice," said his administration is resolved to overcome the hurdles to rebuilding the infrastructure and housing.
Enterprise will come to Montserrat if the conditions are right. One project, the Woodlands Hotel, a joint venture with Landbase International Ltd., is the first substantial development since the volcano erupted. Landbase has also been involved in plans for building a new town in northern Montserrat, including the formation of The Montserrat New Town Trust.
The Sustainable Ecosystems Institute (www.sei.org) in Oregon has been involved in the recovery of the Montserratian economy and the preservation of the natural environment. The tropical island still has a good potential for eco-tourism, despite damage to the reefs and the fish. The Institute has essays on the volcano and on "Sustainable Development in Montserrat" at their web site.
It would be a tragedy if these attempts at recovery were abandoned because of the insurance problem. With only 39 square miles, Montserrat has long history as a people and territory. Columbus came there in 1493 and named it Monserrado (sawed mountain), after a mountain in Spain. The island was colonized in 1632 by Sir Thomas Warner, including Irish from Virginia, and then African slaves were imported, giving the island a mix of Irish and African- Caribbean culture. Passports are stamped with a green shamrock, the island's flag and crest depict Erin of Irish legend with her harp. The French took the island several times, but did not hold it long. Postage stamps bearing the name "Montserrat" have been issued since 1876 and document much of the island's architecture, wildlife, and history. The island was administered as part of the Leeward Islands until 1956, and has been a self-governing dependency of the United Kingdom. Its national anthem is still "Save the Queen."
Despite the aid and recovery plans, there is a danger that if the population drops any further, the economy will no longer be viable. The Montserratians who left will not return until they can build homes. If too much time passes, the Montserratians who moved to other islands and to the UK will take root and not come back.
This small island presents an opportunity for those who have been advocating economic justice, incentive taxation, and geo-economics. The situation is urgent and desperate. The size and population are small, enabling a modest effort to make a big difference. The semi-isolated island geography makes the location a good testing ground. A tax system replacing all taxes on productive activity with the public collection of land rent (PCLR) would jump start the economy. Montserrat would have a big comparative advantage with tax-free enterprise and labor.
If the British government will not back up insurance for construction, the government of Montserrat could do this locally if it implemented PCLR. The government insurance would increase the value of the land, which would then generate more rent for government revenue. The insurance could become self-financing, backed by the availability of future rents. Part of the rent would be saved in a government insurance trust fund. With insurance and no taxation of enterprise, investment would pour in and the Montserratians who left would come back as needed labor.
When the Woodlands Hotel is completed, it would be an ideal site for major conferences, such as the Council of Georgist Organizations conference in 2000. There is probably no better opportunity for those of us seeking to implement geoist ideas for economic justice than Montserrat, an island seeking a new beginning. A planned conference at Montserrat, coordinated with Landbase International and Sustainable Ecosystems Institute, would provide an excellent opportunity.