MercoPress. South Atlantic News Agency

Falklands’ economy “booming” in spite of Argentina’s efforts of a blockade

Governor Haywood announced a major global PR campaign to make the Falklands’ voice heard

Despite desperate attempts from Argentina to deter potential investors and increased interference in Falkland Islands’ activities the objective of an economic blockade has not been achieved, said Governor Nigel Haywood on Wednesday in his ‘state of the nation’ annual speech to the Legislative Assembly.

“There is increased evidence of companies coming under Argentine pressure and regular reports of illegal interference in certain areas. However, we are confident that these attempts will continue to fail and we have the full backing of the UK Government and international law. Such attempts are inconvenient and frustrating but they are not achieving the objective of an economic blockade”, emphasized Governor Haywood.

But the governor also underlined that the focus of the Islands must remain “on our own objectives and we should not be diverted by baseless attempts to derail us” and “we will continue to concentrate on our own development agenda”.

The Governor followed with a quick oversight of the Falklands’ economy, which contrary to other parts of the world is “booming with significant government surplus”, partly because of additional revenues from the oil industry, but mainly based of an excellent year for the fishing industry, higher prices for wool and meat plus the Tourism Strategy, aimed at increasing the number of tourists and transforming the industry’s offer.

“Illex squid returned in force, resulting in the highest catches for some years and the current season also looks promising. Whilst the Islands are not immune to the world economy, the Government has substantial reserves which are invested wisely and prudently”, said Haywood.

“There is significant ongoing interest from major international oil companies in farming into offshore opportunities in the Falklands” following the good progress made by Rockhopper Exploration in their development planning for the Sea Lion prospect oil development and South Falkland Basin where the Leiv Eriksson rig identified a gas condensate discovery.

In a quick reference to the 30th anniversary of the restoration of liberty to the Falkland Islands and its people, Governor Haywood described 2012 as a year of anniversaries. However he pointed out that 2012 also marks the 25th anniversary of the current Falklands fisheries regime.

“Whilst the legacy of the conflict has been political freedom and physical security, which cannot be emphasised too strongly as it is by no means universal in the modern world, the fishery has provided economic security and prosperity”.

Governor Haywood also mentioned that the Falklands have once again been thrust into the international spotlight in recent months as the Argentine Government initiated a huge propaganda exercise designed to press its claim to the Islands in the anniversary year at every opportunity.

However “contrary to the Argentine expectations, this has also provided opportunities for the Falklands to set out the real situation and correct the historical inaccuracies that are being spread. So far this year more than 200 international journalists have visited the Islands and the members of Legislative Assembly have attended more than 30 overseas meetings in support of this effort” underlined Governor Haywood.

Finally the governor said the Falklands’ government will devote considerable resources undertaking its own public relations to make sure that the Islanders' voices are heard and their right to self-determination is promoted.

“We need to make sure that key messages about the Falklands' status, constitutional and legal position, and the overriding determination of the community to remain a British Overseas Territory are fully understood internationally”.

But, insisted the governor “we also need to make sure that as many people as possible are aware that the Falklands have a modern community, a successful economy, a commitment to the highest levels of environmental stewardship and a huge tourist potential”.

Full text of the Governor’s address to the Legislative Assembly
Wednesday 23 May 2012

1. Mr Speaker, the past year has been interesting and challenging for the Falkland Islands. There are a number of reasons for this, some of which I will outline in this address. I will also set out how the Government responded to those challenges and I will outline its future aims and aspirations.

2. The most evident issue locally has been the oil exploration programme. The Ocean Guardian rig left the Islands in January following the completion of a successful 2-year drilling campaign in the North Falkland Basin. Good progress has been made by Rockhopper in progressing their development planning for the Sea Lion development. Focus has now moved to the South Falkland Basin where the Leiv Eriksson identified a gas condensate discovery in the first well. Following this success, the rig is now working on the second well, which was spudded on 11 May.

3. Despite increasingly desperate attempts from our neighbours to deter potential investors, there is significant ongoing interest from major international companies in farming into offshore opportunities in the Falklands. We look forward to future exploration successes. We are also extremely grateful for the unequivocal support from the UK Government for the right of the Falkland Islands Government to licence offshore exploration.

4. The Government is working with private sector to define policies that will encourage and maximise opportunities for local businesses to work with the oil industry. The prospect of oil provides a real opportunity to boost the economic prosperity of the Islands. All necessary are being taken to facilitate future oil production and ensure that the necessary policies, legislation and infrastructure are in place. However, the future of the Islands is by no means dependent on oil. The Government recognises the need to develop other economic opportunities. We will continue to invest, improve and diversify our economy in furtherance of continued financial self-sufficiency.

5. There is increased optimism in the farming community with higher wool and meat prices. This is stimulating investment on farms. The Department of Agriculture and farmers have continued to work together to achieve a balance between meat and wool income. The recently completed upgrades at the Sand Bay Abattoir have allowed processing levels to reach new highs in terms of throughput of animals. The returns to farmers from meat production provide encouragement to farmers to continue the development of the meat side of their businesses.

6. There was a very successful visit by a delegation of Uruguayan business people in February. It is hoped that the contacts made will be developed to provide additional potential for exports and imports.

7. There is also a renewed emphasis on the Rural Development Strategy, which was developed to facilitate economic growth and prosperity for Camp. It should also encourage more people to live and work in Camp. Implementation of the Action Plan, incorporating a potential Rural Enterprise Zone will be pursued enthusiastically in the coming months. The Government has included significant funding in the budget for next year to allow the priorities in the action plan to be pursued.

8. Tourism is now a fundamental part of the economy of the Falklands. The Government facilitated the development of a Tourism Strategy, aimed at increasing the number of tourists and transforming the tourism offer. A key thrust of the Strategy is to increase the number of land-based tourists. To achieve the aims of the Strategy, the necessary infrastructure, quality tourism product and appropriate transport links need to be in place. Progression of the Waterfront Masterplan, redevelopment of the public jetty and the relocation of the Museum will be vigorously pursued in support of the strategic ambitions. The potential for additional airlink capacity will also continue to be pursued.

9. 2012 is a year of anniversaries. It is 30 years since the British Task Force restored liberty to the Falkland Islands and its people. However, 2012 also marks the 25th anniversary of the current Falklands fisheries regime. Whilst the legacy of the conflict has been political freedom and physical security, which cannot be emphasised too strongly as it is by no means universal in the modern world, the fishery has provided economic security and prosperity!

10. It is encouraging that in this 25th anniversary year, the first season Loligo catch reached 34,900 tonnes. This is the highest first season catch for many years and is a good result for our fishing industry. It also highlights the sustainable management of the species and supports our belief that the Falkland Islands fishery is one of the best managed fisheries in the world. It is a testament to our policy of responsible environmental stewardship and sustainable management of our natural resources.

11. This year will also see the long overdue move for the Fisheries Department from the grey containers at FIPASS. The new building being constructed by Morrisons adjacent to the Department of Agriculture will soon be completed. No doubt the Fisheries staff are looking forward to the move!

12. In contrast to many other parts of the world, the Falkland Islands economy is booming and a significant Government surplus was evident last year. This was partly because of additional Government revenues from the oil industry but it was also the result of an excellent year for the fishing industry. Illex squid returned in force, resulting in the highest catches for some years and the current season also looks promising. Whilst the Islands are not immune to the world economy, the Government has substantial reserves which are invested wisely and prudently.

13. One of the major challenges for the future is healthcare. As a modern nation we expect healthcare that is effective but it also needs to be affordable. The health service has received some criticism over the last year. However, a lot of work has been done and is ongoing to overcome the challenges of increased specialisation and ever increasing public demands and expectations. For example, a new surgical and anaesthetic service provider has been appointed that will secure this service for a number of years into the future.

14. In addition, a wide ranging and well publicised review was carried out by the Director of Health and Education into clinical systems and practices across the Health Service. A number of recommendations for improvements were made as a result. The challenge now lies with implementing those changes but the Director is confident that, due to the commitment and hard work he sees from his team on a daily basis, this will be achieved.

15. It is pleasing to note that there are increasing numbers of children coming into the education system. With 44 children starting preschool this year, the increase has been met temporarily by a new facility at Stanley House. Options will be examined for a long term solution for accommodation. There has also been an increase in the number of children being educated in Camp. Commensurate renovation and improvement of Camp schools is underway. A greater use is also being made of IT in Camp education. In addition, it is noteworthy that there has been increasing stability of staff in the Education Service. 50% of teachers are now Falkland Islanders and the vast majority of UK-recruited staff are renewing their contracts.

16. Special Needs provision has been extended through direct recruitment and through links with UK providers. Work is ongoing to formulate a strategy that will facilitate coordinated special needs provision and enhance the lives of vulnerable people generally. It has also been encouraging to see a growing number of young people at the Training Centre undertaking apprenticeships and both in-house and distance learning courses.

17. Standards in secondary education have improved since the last inspection. A concerted focus on self-evaluation has informed school improvement planning and the development of a long term vision for the future of the Community School. The curriculum has been extended with new GCSE subjects being offered that meet the needs of the local economy better. The Heads of both schools have worked hard to create new processes that provide the Education Board with a clear picture of the progress being made. Links with local businesses (such as Cable and Wireless and the Standard Chartered Bank) have also helped to push forward agreed educational objectives and broadened community involvement.

18. This Government remains committed to good governance and reducing bureaucracy. As an example, last year an independent review of the '2008 Review of Government' was commissioned. A 'Review of the Review' report was prepared by Irene Lucas. This contained 19 separate recommendations for improvements to the structure and form of government. Executive Council considered those recommendations last month and accepted the vast majority. Some of the changes, such as the development of a workforce strategy and workforce development plan, will take time to implement but some, including structural changes and simplification of performance management, will be implemented shortly.

19. The past year has seen the achievement of several major Government objectives. Notable amongst these have been the ban on the use of mobile phones while driving; the referendum on the single constituency; the census; the establishment of additional independent legal advice via 'Falkland Islands Legal Services'; the formulation of a revised and updated legal aid scheme; the establishment of the South Atlantic Research Institute and the facilitation of Human Rights training culminating in our first National Action Plan.

20. This Government also remains committed to achieving progress on a range of issues and continuous improvement in the delivery of public services.

21. A framework and approach has been put in place that sets out how Government services will be considered for outsourcing. The first business cases are expected next month and, over the next few months, will look at a range of services including IT, Human Resources, the Post Office and Philatelic Bureau, and Power and Electrical. The private sector has engaged well with the process.

22. Whilst on the subject of outsourcing, the localisation of support services associated with the MOD presence on the Islands remains a priority, in line with the aspirations of the Economic Development Strategy. A Programme Initiation Document has been agreed between the Falkland Islands Government and the Ministry of Defence. Discussions are ongoing to define service requirements and produce implementation plans for the services involved. A Commerce Board has also been established to make sure that the private sector is thoroughly engaged with the process. The process is designed to broaden further the economic base of the Islands whilst reducing costs of defence and freeing up limited resources.

23. A new e-Government Strategy was recently agreed by the Government. This sets out priorities for improvements in IT and information systems and includes the provision of a new internationally focussed web-site. This new web-site will better tell the world the Falkland Islands' story and, in particular, will focus on our economy, our culture and our history. Later this year a new locally focussed web-site will be launched, aimed at improving information and services to local people.

24. There are however difficult challenges which we continue to face in the immediate and longer terms.

25. The most important challenge is to make sure that a strong economy is maintained. Whilst the potential economic benefits that would come with oil production would be welcomed, it is not being anticipated nor is the economy reliant on it. The Economic Development Strategy, or EDS, which was produced in partnership with local businesses, was designed as a roadmap to help in developing the economy. The EDS includes measures to develop existing industries such as fisheries, agriculture and tourism but also includes options for diversification into new sectors and for improving the general economic environment. The Government budget will include significant sums to support investment in the EDS proposals.

26. The challenges we face also include dealing with ongoing attempts by the Government of Argentina to impede certain sectors of our economy. There is increased evidence of companies coming under Argentine pressure and regular reports of illegal interference in certain areas. However, we are confident that these attempts will continue to fail and we have the full backing of the UK Government and international law. Such attempts are inconvenient and frustrating but they are not achieving the objective of an economic blockade. Our focus must remain on our own objectives and we should not be diverted by baseless attempts to derail us. We will continue to concentrate on our own development agenda.

27. The Falkland Islands has once again been thrust into the international spotlight in recent months. The Argentine Government initiated a huge propaganda exercise designed to press its claim to the Islands in this anniversary year. Every opportunity has been taken by its public relations machinery to raise the issue at each and every forum. However, contrary to the Argentine expectations, this has also provided opportunities for the Falkland Islands to set out the real situation and correct the historical inaccuracies that are being spread. So far this year more than 200 international journalists have visited the Islands and the members of Legislative Assembly have attended more than 30 overseas meetings in support of this effort. It is also noteworthy that many locals have been enthusiastically vocal in support, at home and abroad.

28. It has been, and will continue to be, a challenge for the Falkland Islands to resource this effort. Nevertheless, it is a challenge well worth pursuing. The Falkland Islands Government is devoting considerable resources undertaking its own public relations and will continue to do so, to make sure that the Islanders' voices are heard and their right to self-determination is promoted. We need to make sure that key messages about the Island's status, constitutional and legal position, and the overriding determination of the community to remain a British Overseas Territory are fully understood internationally. However, we also need to make sure that as many people as possible are aware that the Falklands have a modern community, a successful economy, a commitment to the highest levels of environmental stewardship and a huge tourist potential.

29. In addition to the headline services already mentioned, the Government has a number of other priorities for the coming months.

30. The review of immigration will continue until we are satisfied that there is a completely fair, transparent and easy to follow system in place; one which balances the needs of a larger labour pool to facilitate economic growth whilst also preserving the Falklands way of life. The appropriate balance needs to be struck between the two to ensure continued diversification of the economy and increased prosperity of the Islands.

31. Localisation of Government jobs remains a priority. New promotion and recruitment procedures are being developed which will enable Falkland Island staff to be identified for development and promotion at an early stage, with the expectation that they will eventually fill senior posts. The Government budget includes £200,000 a year for the Succession Planning and Career Development schemes; very important extensions to the training budget. Unfortunately, the take up on these schemes has been limited so far and it will be a priority to review the eligibility criteria and scheme limitations, to ensure that training budgets are appropriately spent. Notwithstanding this, the 'Darwin 16' initiative was a notable success and demonstrates the Government's commitment to succession planning and developing local talent.

32. The review of telecommunications continues, with the aim of having an effective regulatory regime in place for charges and provision of such services. Appropriate regulatory accounts are now available to the Government and there is a performance quality regime in place. Proposals on charges and service standards are under discussion and should be concluded shortly. The Regulatory Services section will move onto reviewing fuel supplies in the next few months.

33. Transport links are an important part of the Islands' infrastructure; both internally and externally. The Government is investigating a number of possibilities for enhanced airlinks to improve accessibility and allow tourism and the economy generally to develop. Significant budgets have also been included for maintenance and improvement of the Camp road network. A holistic review of the network has been completed which resulted in the production of a highways Asset Management Plan. This will be used to determine priorities for the future.

34. Housing remains a strategic priority for the Government. 7 plots have been made available recently on the Snake Hill/Kent Road site to relieve the immediate pressure. The Government intends to start work on the Sapper Hill site in the forthcoming financial year. Phase 1 will make available 34 additional plots and the development will eventually provide a total of 120 additional plots.

35. The Government's policy priorities for the forthcoming financial year will result in an ambitious legislative programme. This will include:

• Amendments to the Criminal Justice legislation to address various issues including bail, sentencing options, appeals and prosecution time limits;

• Planning legislation to simplify the planning process and allow the public to speak on planning applications and to make more detailed provision for environmental impact statements;

• Legislation to update and improve laws dealing with oil pollution;

• A new FIDC Ordinance to create a new and more effective relationship between the Government and the Development Corporation;

• A new Prison Ordinance to replace the existing very out of date legislation;

• A new Agricultural Returns Ordinance to enable the collection and analysis of essential information to guide policy on this important industry; and

• Further progress on Road Traffic Regulation.

36. In addition, every opportunity will be taken to clarify and bring Falkland Islands' Legislation up to date.

37. Mr Speaker, Falkland Islanders are resilient and resourceful. They are used to standing up for themselves and they are steadfast in their resolve. For nearly two hundred years they have been meeting challenges effectively and they are practical and inventive in finding solutions to those challenges. The Falkland Islands has a modern society with modern aims, expectations and ambitions. The community has high standards and high moral obligations. It deserves a modern, efficient and effective Government to work with. There are some serious challenges ahead, as there are in many parts of the world. However, the Government will continue to work, to provide practical, imaginative and sometimes bold solutions in order that first class services can continue to be provided. This approach will enable the Islands to continue to have the bright future which they deserve.