S.Atlantic : SOUTH ATLANTIC ISLANDS’ CO-OPERATION BEGINS WITH MONEY
Submitted by SARTMA.com (Juanita Brock) 30.01.2011 (Article Archived on 13.02.2011)
The South Atlantic Territories Co-operative Forum will meet to discuss tourism and conservation but Elected Members and UK Representatives of St Helena, Ascension Island, the Falklands, and Tristan da Cunha also need to think of a fundamental yet frustrating issue – money.
SOUTH ATLANTIC ISLANDS’ CO-OPERATION BEGINS WITH MONEY
An Editorial by J. Brock (SARTMA)
The South Atlantic Territories Co-operative Forum will meet to discuss tourism and conservation but Elected Members and UK Representatives of St Helena, Ascension Island, the Falklands, and Tristan da Cunha also need to think of a fundamental yet frustrating issue – money. This article is written from personal experiences mainly in the Falklands and is not meant to be technical or critical in nature.
Coins and Paper Money:
For people who regularly visit other South Atlantic British overseas Territories exchanging money is simple – just open a bank account on each Island and spare coins and paper money can be deposited in the appropriate bank. The rest are out of pocket when another territories coinage is given as change.
Banks, after all, are businesses and moving coins and paper money around the South Atlantic costs money. For example, it could cost more than £25.00 to ship £300.00 worth of coins to an appropriate bank. For a variety of reasons dealing with costs, Island banks and governments won’t do this.
Though in theory St Helena Pounds and Falkland Islands Pounds have parity with GBP, in practice it ain’t necessarily so. Broadly speaking, it costs more to give parity to St Helena Pounds mainly due to that Island being grant in aid. The Falklands being self-sufficient means that it is easier to grant its coinage parity with GBP.
Co-operative discussions need to rectify this problem if financial success can be reached on all Islands in the group.
Personal and Business Money Transfers:
Most banks in the South Atlantic British Overseas Territories transfer money efficiently. However, in several instances (when using a 3rd party) transferring a bank draft can take more than 6 months.
The draw-back to electronic transfers can be the cost. When money is received from other banks, their fee is paid at source but the amount transferred may not be the same at either end of the transaction, as additional fees can be taken out of the sum by intermediate banks. Heaven help you if smaller amounts of money are sent – you could end up with 1/3rd of what you expected. Ditto when money goes the other way.
All banking entities working in the South Atlantic British Overseas Territories need to be singing from the same hymn sheet. Ideally it should cost the same to transfer money on Tristan as it does in the Falklands.
Current Accounts and Savings Accounts:
Businesses especially would benefit if they could write a cheque on their Island(s) bank and have it accepted and processed with a bank on another Island. Money in savings on an Island should be accessed when the owner of the account presents a request on another Island.
Ideas for the Way Forward:
1. Coins and Notes – If we are going to have success in Co-operation we need to find a way to accept as legal tender the coins and notes of other Islands
2. Single Currency – Explorations on how a single currency could bring benefit to all should be initiated sooner rather than later. Open minds need to prevail – there’s room here to begin thinking outside of the box.
3. Building Banking Networks – The most efficient and cost-effective way of transferring money must be found for all Islands if joint projects are to be successful. Costs for transferring money need to be in the same ball park.
4. Special Area of Banking Co-operation: While different banks and their affiliates may operate differently, there could be agreement and co-operation between banks operating in the South Atlantic. We need to think about forming an association specifically for relevant banks so there can be more unity in the South Atlantic instead of financial fragmentation now rampant in the region.
5. Those Paying the Most Can Least Afford it – Very few businesses would crave operating in sparsely populated remote Islands. There’s no money in it. Those who operate in these areas must recover their costs. At the moment people on £200.00 a month pay a large proportion of it if they want to transfer money. It is SARTMA’s idea that the 9500 (approx.) people in the South Atlantic need to unify their banking efforts so the costs incurred by the poorest of us can come down.
It is hoped that this article will fuel debate and discussion about how banking services in the South Atlantic British Overseas Territories can become more efficient and achieve standardisation. Further, it would be advantageous for the Co-operative Forum to discuss ways to achieve better monetary union.
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