Euro-Caribbean Societies in the 21st Century

Offshore finance, local élites and contentious politics

Sébastien Chauvin, Peter Clegg, Bruno Cousin

• Publisher: Routledge
• Year: 2018
• ISBN:
  9781351248853
• Edition: 1
• Topic: Politics & International Relations
• Subtopic: Global Politics
• Index: Politics & International Relations

This edited collection examines the realities of the last remnants of the European colonial empires in the Caribbean, namely the British, Dutch and French overseas territories.

Although known and perhaps infamous for their role as high-end tourist destinations and financial centres, these small jurisdictions are complex and multifaceted places. While this volume considers their role as financial centres, it does so from alternative and original perspectives by examining how the sector shapes the internal dynamics of these Caribbean societies, and how it is itself shaped by global trends. A range of contributions is included that highlight other key issues. Political relations between the territories and their metropolitan centres and with the European Union are the focus of several chapters, highlighting the stresses and strains, and in many cases the unfulfilled expectations of devolved governance. Further chapters describe the economic instability and factors of political conflict faced by some of these societies and the available options to address them. Finally, several chapters reflect more specifically on the territories' internal social and ethnic dynamics, and the hierarchies and inequalities that result.

Bringing together a variety of different disciplinary perspectives, from political science to sociology, and from anthropology to geography, this book will be of great interest to any academic or student who wishes to see how an often overlooked part of the world is actually a key site of socio-economic transformation and a crucial nexus in global affairs.

Sébastien Chauvin is a sociologist and an Associate Professor at the Institut des Sciences Sociales at the University of Lausanne, Switzerland. His research deals with immigration, citizenship, gender, sexuality, law and labour in France and the USA. With Bruno Cousin, he has also developed a multi-sited research programme on social and symbolic capital and the cultural sociology of economic élites, with a focus on Western Europe (élite male social club sociability), the Caribbean region (Saint-Barthélemy), and new forms of conspicuous consumption among the global super-rich. His other ongoing writing explores the intersections of race, nationalism, sexuality and citizenship in the Netherlands, France and the USA.

Peter Clegg is Associate Professor in Politics and Head of the Department of Health and Social Sciences at the University of the West of England, Bristol, UK. He was formerly Visiting Research Fellow at both KITLV/Royal Netherlands Institute of South East Asian and Caribbean Studies, Leiden, Netherlands, and at the Sir Arthur Lewis Institute of Social and Economic Studies (SALISES), University of the West Indies, Jamaica. His main research interests focus on contemporary developments within the United Kingdom Overseas Territories and the international political economy of the Caribbean.

Bruno Cousin is Assistant Professor of Sociology at Sciences Po, France, and an affiliate of the Centre of European Studies and Comparative Politics (CEE), France. Previously, he was Assistant Professor at the University of Lille, France, and Postdoctoral Research Fellow at Harvard University, USA, and has held visiting positions at NYU, the University of Amsterdam and Birkbeck. His research interests focus on class relations, residential segregation, social capital and forms of bourgeois sociability, and the modes of élites' legitimization. He is currently conducting research with Sébastien Chauvin on Saint-Barthélemy (French West Indies), whose first results have been published in Ethnologie française and Geographies of the Super-Rich (2013), and he has recently co-authored Ce que les riches pensent des pauvres (2017).

Part I

Institutional, political and regulatory processes: the transformation of relations with the metropolitan states, the EU, and the international community

1 The United Kingdom Overseas Territories in the Caribbean and their quest for further autonomy

Peter Clegg

The relationship between the United Kingdom (UK) and its Overseas Territories (OTs) is steeped in history. The territories make up a small number of countries that are remnants of Britain’s colonial past. Indeed, in the current British legislation that oversees the territories the word ‘colony’ is still used. Harry Ritchie (1997) called the territories ‘the last pink bits’, and they still retain a strong link with Britain. There are 14 OTs spread across the globe, five of which – Anguilla, the British Virgin Islands (BVI), the Cayman Islands, Montserrat, and the Turks and Caicos Islands (TCI) – are located in the Caribbean. This chapter provides an overview of the key constitutional and political developments that have taken place since the basis of the existing relationship was set in the early 1960s. Specifically, it considers the somewhat different paths the territories have taken since that time framed by their particular constitutional histories and the occasional political crisis, such as the corruption scandals in the TCI. The chapter also evaluates the changes that have occurred in UK policy, which have fluctuated between neglect and significant engagement. In recent years efforts have been made on both sides to modernize and revitalize the link. Indeed, there is a strong desire by both parties to build a more constructive and positive set of relations that affords greater responsibility to the territories. The chapter concludes by considering if the territories will indeed advance their levels of autonomy in the short to medium term.

From colonization to the end of the Federation of the West Indies

The link between Britain and the territories goes back 350 years or so. Anguilla was colonized by English settlers in about 1650; the BVI saw its first English settlers in 1666 before Tortola was annexed by the British Crown in 1672; the Cayman Islands had informal English settlements from the late 1650s, although control was not formalized until the 1730s; Montserrat was first settled in 1632 before being lost to France twice and it was not until 1783 that British control was consolidated; and the TCI has been overseen by the British since 1766. Despite quite similar initial histories there were later differences in the territories’ political and economic development. For example, some were governed in regional groupings (such as Montserrat within the Leeward Islands Federation between 1871 and 1956), while others were ruled by neighbouring colonies (the Cayman Islands by Jamaica, 1863–1962, and the TCI by the Bahamas, Jamaica and then again by the Bahamas up until 1973). Economically, some had significant sugar plantation economies (such as the Cayman Islands), while others were not exploited to the same extent (Anguilla).

A key change for the territories was the growing demand for self-rule and possible independence across the English-speaking Caribbean from the 1930s onwards, precipitated in part by significant economic problems. Although the strongest voices for change came from the larger territories, the smaller ones were also impacted, most particularly with the creation of the Federation of the West Indies in 1958 that included Anguilla (as part of Saint (St) Kitts-Nevis-Anguilla), the Cayman Islands (as part of Jamaica’s administrative structure), Montserrat, and the TCI (again associated with Jamaica). The Federation was created to give the territories a greater degree of autonomy within a federal structure, with the ultimate objective of independence. As Payne argues, Federation was ‘a means of increasing the effective size of the West Indian territories to a point where they became eligible for self-government as one unit’ (2008: xxv). However, the Federation was weak from the outset and collapsed as Jamaica and Trinidad and Tobago demanded independence in their own right. As Payne suggests, it was little more ‘than a forum for the expression of regional rivalries’ (ibid.: xxxi). Furthermore, as Davies states, ‘The original plan for one economically viable democratic state … became impossible to implement once the larger colonies in the region chose to become independent on their own’ (1995: 109). The outcome was independence for the larger countries without their dependencies and a new legal framework for the smaller ones. Over the next 20 years the majority of these territories also gained their independence, but a few (the OTs) did not follow suit.

After the collapse of the Federation the UK established constitutions for each of those territories that retained formal ties with London. The West Indies Act of 1962 (WIA, 1962) was approved for this purpose. As Davies states the Act ‘conferred power upon Her Majesty The Queen to provide for the government of those colonies that at the time of the passing of the Act were included in the Federation, and also for the British Virgin Islands’ (1995: 118). The BVI, unlike the other territories, did not become a member of the Federation because of its strong links with the US Virgin Islands and the USA more generally. The WIA 1962 remains today the foremost Act underpinning the UK’s relations with the BVI, the Cayman Islands, Montserrat and the TCI. Also, parts of the West Indies Act 1967 (WIA, 1967), which was established to facilitate Associated Statehood for territories such as Dominica and Grenada, was extended to the BVI, Montserrat and St Kitts-Nevis-Anguilla in regard to their membership of the Eastern Caribbean regional Supreme Court.

Despite being overseen initially by the WIA 1962 Anguilla is now dealt with separately under the provisions of the Anguilla Act 1980 (AA, 1980). This is because after St Kitts-Nevis-Anguilla was awarded Associated Statehood, Anguilla became increasingly unhappy about being part of a unitary state dominated by the government in St Kitts, and soon declared its preference for independence (Byron, 1999). The decision was not supported by the UK and in March 1969 a small force of British policemen and paratroopers were sent to Anguilla in an effort to reassert the cohesion of the three-island state (Mawby, 2012). Concerned about how an independent Anguilla might turn out the UK relented and agreed that the territory could come under direct British rule. It officially became a separate British Dependent Territory (as the territories were then called) in 1980 and the AA 1980 underpinned the change.

Political challenges and economic advances

Following the introduction of the two Parliamentary Acts, the territories developed both politically and economically, despite the fact that the overall nature of their relations was quite similar. The constitutions of the BVI and Montserrat afforded greater executive and legislative autonomy, with less power for the Governors, than those of Anguilla, the Cayman Islands and the TCI. To a large extent this was because the former two territories were never dependencies of other colonies. For instance, the fact that Montserrat joined the West Indies Federation meant that it benefited from relatively advanced constitutional provisions, which were designed to smooth the country’s path towards becoming part of a single independent federal state. Of course, this never happened. Nevertheless, the 1959 constitution remained in place, and was the basis of a new constitution in 1989. However, Montserrat’s relatively advanced constitutional position was undermined by two developments. First, the 1989 constitution added oversight of international finance to the Governor’s reserved powers. This was done in response to a series of banking scandals that were uncovered (Fergus, 1990). Second, and certainly more importantly was the eruption of the Soufrière Hills volcano in July 1997, and the subsequent destruction that it caused. The outcome was a reliance on the British government for budgetary support, and an associated decline in local political and economic autonomy. Despite these curbs Montserrat had, at least in principle, the most freedom of action when compared to the other OTs. This was true even for the BVI, which was a separate colony like Montserrat, but did not become a member of the West Indies Federation, and thus its constitutional provisions were less advanced.

For Anguilla, the Cayman Islands and the TCI their level of constitutional development was more limited due to their being dependencies of other colonies and because their separate status came much later. For example, the Cayman Islands did not have a system of formal party politics until 2001, and the positions of leader of government business and leader of the opposition were not established until 2003. Furthermore, the lack of political and constitutional maturity has caused problems, particularly so in the TCI which went through a period of significant upheaval in the mid- to late 1980s (Clegg, 2012). The territory’s problems reached their zenith in 1986, when ministerial government was suspended and direct rule was imposed by London. A new constitution was subsequently implemented in 1988, which extended the Governor’s powers, including those relating to membership of the legislature.

In terms of economic development, the territories initially relied on agriculture, some fishing, a few light industries, and salt extraction. However, the situation began to change from the 1960s, particularly in the Cayman Islands. From the mid-1960s the Cayman Islands passed a series of new banking laws and made extensive investments in infrastructure (Cichon, 1989). The result, with assistance from the City of London among others, was the growth of a large offshore financial sector with no income, property, inheritance or capital gains taxes. The tourism sector also grew at this time. A similar story was seen in the BVI following the 1984 enactment of the International Business Companies Act (ibid.: 503). The other territories also saw their economies develop from the 1980s onwards, although they were largely based on tourism and construction rather than on offshore finance.

An important consideration during this period was the attitude of the UK towards the OTs and its related level of engagement. Following the collapse of the Federation and the move towards independence by some Caribbean territories, initially there was a large degree of detachment on the part of the UK. For example, in January 1969 the Daily Telegraph asked the Foreign and Commonwealth Office (FCO) how many territories remained. Although the paper was given the correct figure, it took the FCO another two and half hours to discover the territories’ names (Drower, 1992: 75). Re-engagement on the part of the UK was prompted by two developments. First, British policy towards the Caribbean was reversed following the US-led invasion of Grenada. Second, Britain’s neglect had allowed serious problems to fester in the territories, which subsequently required attention. As Thorndike argued, British policy allowed ‘in one instance [TCI] a scandalous degree of drug related activity and corruption to flourish … almost to the point of subversion’ (1989: 121). A contributing factor was the UK’s limited amount of respect for the territories. As one official was quoted as saying, ‘The Caribbean is the arsehole of the world, and the Turks and Caicos is the arsehole of the Caribbean’ (Swann, 1993: 7).

One of the first manifestations of the UK’s re-engagement was a review of the territories and their relationship with the UK. In December 1987 Tim Eggar, the Member of Parliament (MP) responsible for the review, announced the findings to the House of Commons and stated: ‘The review concluded that we should not seek in any way to influence opinion in the Territories on the question of independence. We would not urge them to consider moving to independence, but we remain ready to respond positively when this is the clearly and constitutionally expressed wish of the people (Hansard, 1987: column 574). In addition, there was now an expectation that the UK would play a more proactive role in the territories. Two examples of this could be seen. One was the action taken after the banking scandals in Montserrat were revealed. The other was the imposition of the Caribbean (Abolition of Death Penalty for Murder) Order. Until the Order was applied in 1991 the death penalty was the mandatory sentence for murder in each of the OTs.

From these two examples it is evident that the UK government was prepared to play a more hands-on role in relation to its territories. However, appearances were deceptive and question marks remained about how all-embracing UK policy was. It is true that the British authorities had acted to resolve a number of high-profile issues, but on the whole interventions were reactive and piecemeal in nature. There was no strong, identifiable set of priorities that defined and guided UK policy. In late 1991 and early 1992 the UK held a second review of policy, considering issues such as drug trafficking, money laundering, good government and the liabilities which the UK might be required to finance as a result of the territories’ actions (Sutton, 2001; NAO, 1997). The results of the review were announced in October 1992, and the UK enacted a number of measures to develop a more integrated approach to the territories, as well as several new policy initiatives, including jointly agreed Country Policy Plans; strengthening regulation of their offshore financial sectors; and streamlining the methods of budgetary and financial accountability. However, even then, the situation remained problematic.

Constitutional and administrative renewal

There was an expectation, certainly on the part of the UK, that the reforms enacted in the early 1990s would lead to a more effective and responsive relationship with its territories. However, the eruption of the Soufrière Hills volcano in 1997 highlighted a number of ongoing major deficiencies in the UK’s administration of not only Montserrat but the other territories too (International Development Committee, 1997, 1998). Some concerns were raised about the bureaucratic structures, others about the government’s ‘wait and see’ approach. As Taylor noted, ‘My heart goes out to the Governor of the time … who sent 400 telegrams to the Foreign Office and did not feel sufficient weight was given to his views’ (2000: 340). Furthermore, the crisis highlighted that ‘[Montserratians] could travel to the UK but had no legal right to enter and had repeatedly to apply for special leave to remain’ (Skelton, 2000: 109). In short, citizens of the territories had no right to British citizenship; their remaining rights had been taken away following the enactment of the Immigration Act of 1971. At about the same time as the Montserrat crisis, the National Audit Office (NAO) investigated the action taken by the FCO to minimize the risk of potential contingent liabilities falling on the UK as a result of the territories’ actions. It found that the UK remained exposed, chiefly from ‘financial sector failures, corruption, drug trafficking, money laundering, migrant pressure and natural disasters’ (NAO, 1997: 7). The NAO worryingly described the UK as having ‘extensive responsibilities but limited power’ (ibid.: 17). Both the Montserrat crisis and the NAO report thus refocused attention on the problems that still existed between the UK and its territories.

The election in 1997 of the ‘new’ Labour government in the UK corresponded with this renewed interest in the territories. In a relatively short time two key initiatives were undertaken. First, a White Paper was produced entitled Partnership for Progress and Prosperity (FCO, 1999), which attempted to reset and re-energize relations. Guided by the White Paper bureaucratic structures were streamlined; there was a change in the nomenclature from ‘Dependent Territory’ to ‘Overseas Territory’; and British citizenship, and therefore the right of abode, was once again offered to citizens of the territories. A process of constitutional review was also undertaken. Although the White Paper stated that there was a clear wish on the part of the territories to retain their links with Britain, and not move towards independence, there was agreement that a constitutional review process would be carried out in an attempt to update existing provisions. Over the next few years occasionally difficult negotiations took place that led to new constitutions for all but one of the territories (Anguilla). All of these negotiations resulted in further fairly limited autonomy for the territories. For example, National Security Councils were created in the BVI and the Cayman Islands, and a National Advisory Council in Montserrat, to advise the Governor on internal security and police matters. Provisions were also made for the devolution of new powers to the governments of the BVI, the Cayman Islands and Montserrat in the area of international affairs. Also, the new constitutions included some symbolic changes which the territories requested. In the BVI and the TCI the Legislative Council was renamed the House of Assembly, and in Montserrat it was renamed the Legislative Assembly. In three territories the title of Chief Minister was changed to Premier and the Executive Council was renamed the Cabinet, while in the Cayman Islands the title of Leader of Government Business was changed to Premier. The reason for these limited changes was because of a fundamental tenet held by the UK, which is still in place today, namely that clear lines exist beyond which reform is not possible unless independence is the end...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Table of Contents
• List of illustrations
• Acknowledgements
• The editors and contributors
• Introduction: Offshore Europe on the move
• PART I: Institutional, political and regulatory processes: the transformation of relations with the metropolitan states, the EU, and the international community
• PART II: Economic transformations, local élites and the current dynamics of inequality
• Index