Ken Westmoreland submission to International Development Committee inquiry into

Small Island Developing States

Background

I am an academic researcher specialising in international relations, with a particular interest in decolonisation and self-determination, having closely followed East Timor’s struggle against Indonesian occupation, before finally visiting what was by now an independent country in 2009. While Timor-Leste is not not an island state per se (unlike most visitors, I entered it by land from the Indonesian part of the island) it does face many of the same challenges as small states that are islands, although it is not as remote as many of them.   

Similarly, while another small jurisdiction I know well, Gibraltar, is neither an island nor an independent state, political tensions with Spain have forced it to develop what is an island economy, one even more self-reliant than actual islands; whereas Jersey can rely on France for electricity, and Singapore on Malaysia for drinking water, despite past threats, for Gibraltar to rely on Spain for either is too great a risk.

However, the focus of my submission will be another British Overseas Territory, St Helena, which I visited at the beginning of this year.

Reason for this submission

Although St Helena could be be more appropriately described as a SNIJ (Small Non-Sovereign Island Jurisdiction or Sub-National Island Jurisdiction) than a SIDS (Small Island Developing State), it still faces many of the common features and challenges your Committee refers to, namely a lack of economies of scale and a lack of critical mass. In addition, the island’s remoteness leads to to logistical problems, as the aircraft used are too small for freight, while shipping services are infrequent, made worse by delays..

What I mean by a lack of critical mass is that there are too few people wearing too many hats, resulting in conflicts of interest, exacerbated by close personal relationships; one saying about the island before I went there was ‘it’s not what you know, or who you know, but what you know about who you know’! Personally, I could not care less about who got whose sister pregnant or even who is taking drugs, but I am concerned about the professional competence of people on the island, irrespective of where they are from.

However, given that St Helena is a British Overseas Territory, and hence, still a British responsibility, the UK has a much greater duty of care than it does in the case of former British colonies in the Pacific, for example, which have developed links with Australia and New Zealand. In addition, while Montserrat, also still dependent on the UK’s financial support, is so close to its neighbours that it is a member state of the Caribbean Community in its own right, St Helena has no scope for regional integration.

I would like to introduce an acronym to describe what should be priorities for St Helena, or indeed any other SIDS or SNIJ, namely SECCDI, or Social Economic Cultural Communications Digital Infrastructure. This is particularly fitting since the island was connected to Google’s Equiano cable, vastly improving the island’s internet connectivity and its communications links with the outside world. This is especially important given that, in common with other small islands, it has a sizeable diaspora, much of which in the UK.

Dilemmas and fallacies

Unfortunately, like people in other small islands, St Helenians (or ‘Saints’) are bombarded with advice from outsiders, conflicting and contradictory, told by one to do something and by another not to, with the patronising expression ‘be careful what you wish for’. There seems to be a rule that the smaller and more remote the island, the warmer its climate and the darker-skinned its people, the more likely it to be romanticised by Western social scientists who see its people as noble savages who need protecting.

For example, while the Daily Mail, on the right, criticised the building of the island’s airport on financial grounds as wasteful ‘foreign’ aid, the Guardian, on the left, did so on environmental ones, and with scant regard for the people who live there. In reality, St Helena has survived the introduction of many other supposed evils, like videos, live TV, mobile phones, the internet, so why should air travel be any different? There is a degree of selfishness on the part of those Westerners who want the island stuck in a time warp.

When I told one acquaintance, a documentary film maker, about the dire internet connectivity and disjointed banking system on the island, he replied ‘but isn’t part of the point of going to St Helena is that it’s off the grid?’ For whom? Certainly not an incentive for those living there, or for those in the diaspora who might want to come back to it. More importantly, the point should be to change that state of affairs, just as his filming in East Timor under Indonesian military occupation was, presumably, to change that one.

In addition, there is a ‘dog in the manger’ attitude, with one man on Facebook, currently living in the Caribbean, telling a future politician, now government minister, with dreams of a digital economy ‘that’s what I want to move to your island to escape from, don’t ruin it for me!’ Tellingly, the only negative comments I heard on the island about its plans for development were from someone originally from the UK: ‘If they don’t like it, don’t come here! Why don’t they leave us alone!’ What do you mean ‘we’, white man?

The myth of ‘leapfrogging’

On the other hand, there is the asinine expression ‘leapfrogging’, meaning to skip a generation of development, which can best be described as disguising dysfunction. For example, Sure, the Guernsey-based and Bahrain-owned telecom monopoly, uses the popularity of Skype and Messenger (‘telephone service has almost dropped completely off’ because this is ‘the way that the world evolves’) to conceal the fact that it is either astronomically expensive or plain impossible to call the island from the rest of the world.

Like those to other small jurisdictions, calls to St Helena from the rest of the world are barred by many international carriers, which see it as a ‘low volume, high risk’ destination, as they do its sister island, Ascension, whose telephone numbers are used, fraudulently, in ‘wangiri’ or missed call scams, used to trick people into returning the calls at considerable expense. Even if traditional telephone calling is ‘dropping off’ on the island, it is still damaging to the island’s image, and should not be dolled up as ‘leapfrogging’.  

At least when Niue, a tiny Pacific island of 1600 people, leased its telephone numbers to sex chat lines in the UK or Japan as a means of increasing revenue from inbound international calls, those who called them at great expense did so by choice. However, when other Pacific islands found calls from Ireland were being blocked because their numbers were being used in scams, their ambassadors to the EU travelled all the way from Brussels to Dublin for a meeting with the country’s communications regulator to get the block lifted.

While Ofcom claims to have no jurisdiction over any of the British Overseas Territories, the International Telecommunication Union, which assigns them their country codes, considers the UK to be the member state responsible for them, and for the Crown Dependencies. Ironically, while an Ofcom webpage on ‘wangiri’ scams mentions several ‘small or developing countries’ and their international dialling codes, being used for these fraudulent purposes, it makes no mention of Ascension’s country code, 247. 

That people on St Helena and Ascension’s even more remote sister island, Tristan da Cunha, have been able to receive calls on London numbers since 2006, thanks a satellite link to the Foreign Office’s own telephone network, gives the lie that to the claim that separate country codes are necessary, and that integration into the UK’s telephone numbering plan is impracticable. While Tristan has officially been assigned the same code as St Helena, 290, it does not use it, and given the problems that would entail, why would it?

An even more bizarre development I discovered just recently was that Sky Mobile not only includes the Channel Islands and the Isle of Man in its call packages, along with the Republic of Ireland, but also includes Ascension! This is despite O2, whose network Sky uses, charging 55p a minute to call the Crown Dependencies, and £3 a minute to call Ascension, or £2 a minute to receive calls whilst roaming there. EE, owned by BT, has no roaming arrangement there or in St Helena, or the Falkland Islands, with Sure.

Even allowing for the British military presence on Ascension, it is puzzling why Sky would do this for a tiny island with only 800 people and treat it as part of the UK for these purposes, however flattering. On the other hand, Movistar in Argentina charging calls to the Falklands at 0.43 pesos or 0.1p a minute, half the cost of calls within Argentina, has some rationale, even though it means that it makes a huge loss on them in the name of national honour. It is unlikely Sure will be charging anything like that for wholesale rates.  

A more pressing concern for residents of both the Falkland Islands and St Helena, however, has been in receiving text messages from the UK on their local mobile phone numbers from internet banking and online payment services. As many of these require their customers to enter one time passcodes sent to their numbers for security purposes, it becomes difficult if not impossible for people in these places to use such services if they cannot receive the messages containing these codes.   

In response, the Falkland Islands Communications Regulator stated that it had approached Ofcom, but ‘the Falkland Islands simply doesn’t [sic] have the influence to press for these changes.’ Given that their government has its own representative office in London, and a highly influential parliamentary lobby in Westminster, unlike St Helena, it beggars belief that it should feel this to be the case. Incidentally, the webpage on which this was stated has been removed and consigned to an Orwellian memory hole.

This does not augur well for St Helena, as while its new Communications Ordinance makes provision for a similar body to be established, at the time of writing this has yet to come into force. Given that Sure’s existing contract is to be extended pending the building of a new network by Maestro, a company in the UK, the likelihood is that this interim arrangement will be extended indefinitely until Maestro throws in the towel. Consequently, the 1989 Telecommunications Ordinance will remain in force indefinitely.

Not de-banked, but un-banked

One of the most bizarre questions I was asked on the island was ‘when we get the cable, will we be able to have a bank?’ This was a reference to Bank of St Helena account holders being unable to send or receive international payments; these have to go via Lloyds in the UK. The reality is that the island could have had a proper bank decades ago, as the Bank of Nova Scotia made a proposal to set one up in 1993, before abandoning it two years later, fed up with the government’s inability to pass the relevant legislation.

Another self-inflicted handicap in a cash-only society is the existence of the St Helena pound, which replaced sterling at par in 1976, with banknotes and coins completely useless anywhere except Ascension; not even in Tristan da Cunha are they legal tender. These cannot be deposited into a UK bank account, unlike those of the Gibraltar pound. By contrast, small former British colonies in the Pacific like Kiribati and Tuvalu use the Australian dollar, with no local banknotes, and local coins issued only occasionally.

Of course, proponents of ‘leapfrogging’ point to St Helena’s dire banking system as an example of why small islands should abandon ‘bricks and mortar’ and go digital and cashless. The reality, however, is that fintech companies are no more inclined to serve customers there than traditional banks in the UK; Revolut, for example, no longer offers accounts to Gibraltar residents, Wise no longer allows St Helena ones to open them, while Square does not offer its services there at all, despite doing so in the Falklands.   

Indeed, it may be because of the remoteness of St Helena and its poor transport and communications links, rather than in spite of them, that fintech services are wary of it; if customers in the UK engage in suspicious or fraudulent behaviour, they can easily be identified and located, but those in St Helena cannot. Ironically, Starling Bank, a digital ‘neobank’, allows its customers in the UK to deposit cash at any Post Office branch, with an additional charge of only 0.7 per cent only incurred on deposits of over £1000.  

Essentially what is needed in a small remote island like St Helena is a bank that is digital globally but still physical locally. Perhaps Gibraltar International Bank (GIB) established to fill the gap in the market left by Barclays leaving the Rock, could forge closer links with the Bank of St Helena; residents of the island can already open GIB accounts, enabling them to make international payments online, but transactions to and from the island, as earlier mentioned, still have to go through Lloyds in the UK.        

However, the Crown Agents, descended from the Crown Agents for the Colonies, could have played that role, but its financial arm, the Crown Agents Bank, now CAB Payments, was sold off in 2016. Or Standard Chartered Bank, the only bank in the Falklands; incidentally, the only cash machine in the Islands is provided by a local company, which faced problems not because it broke down and could not be repaired, but because it was being used outside the UK, with the supplier threatening disconnection or higher charges.

Despite the Falkland Islands describing themselves as part of a ‘UK family’, the reality is that companies in the UK have no obligation to treat them differently from a foreign country, and to consider the use of their products and services there as fraudulent. Yet a report commissioned by their Chamber of Commerce into banking services noted that the more closely a small territory was linked with its sovereign state, for example, St Pierre et Miquelon with France, the greater the availability and choice of such services locally.

No small markets, only small minds

To give you an idea of the still limited digital literacy on St Helena, my acquaintance put forward a business idea to allow people to pay for Netflix accounts in cash, for which he would charge them a 25 percent fee, and then send the money to me in the UK, from where I would set accounts up. In reality, it would be much easier for people with family or friends in the UK to do so on their behalf, thereby avoiding any extra expense, while Netflix, Amazon or Google Play gift cards can be paid for in cash.  

As it happens, there are parallels between being prevented from opening accounts with banks in the UK, even digital ones, and being prevented from watching streaming services like BBC iPlayer, even using a VPN; both are forms of ‘geoblocking’, the former economic, the latter cultural. Bizarrely, while Sure’s customers in St Helena are currently able to watch BBC iPlayer, on account of it using IP addresses in Guernsey, when they go onto the Amazon website, they are told that they are in the Falklands!      

In addition, Sure should do what telecom operators in small island states do, namely allow people in the diaspora to send calling credit to their family or friends back home; for example, Flow and Digicel allow people in the UK from Anguilla or Montserrat to top up the accounts of customers. However, it would be just as feasible for all of them to offer MVNO (Mobile Virtual Network Operator) services using existing 5G  networks in the UK, targeting the diaspora communities as well as creating greater economies of scale.

While it was unfortunate that the Daily Mail attacked the UK’s funding of Montserrat’s internet cable as wasteful ‘foreign aid’, just as it did St Helena’s airport, pointing out that many parts of the UK still had inadequate internet access, the reality is that Flow (owned by Cable & Wireless) and Digicel are large companies with deep pockets operating in a larger regional market, and could have funded it themselves. Consequently, there is an even stronger case for them to operate in the UK market than there is for Sure.

Poignantly, the newly activated link to Google’s Equiano cable was the last project to be supported by the European Development Fund in St Helena as one of the EU’s Overseas Countries and Territories (OCTs) before Brexit; regrettably, the UK not see improved communications links as on a par with improved transport links. By contrast, Niue, despite being part of the Realm of New Zealand, can receive EU aid independently of Wellington, whereas St Helena can no longer do so independently of London.  

As I put it, in the digital world, there is no such thing as a small market, there is only a small mind, and this is the case even where physical infrastructure is involved. In Niue, Emani Lui, who introduced wireless broadband to the island in competition with the state-owned Telecom Niue, did not seek to be just another big fish in a small pond; instead, he went on to set up his own internet and mobile provider in New Zealand, home to a large Pacific island diaspora, its main market, but not its exclusive one.

Conclusion

While the scope of your inquiry covers a much wider range of jurisdictions than the ones I have mentioned, there is an overlap between the smaller and more remote British Overseas Territories like St Helena and the Small Island Developing States, and the challenges they face, and as I said earlier, the UK has an even greater duty of care to the former than it does to the latter.