The Virgin Islands is a 59-square-mile, resource-poor territory lying between the Caribbean Sea and the North Atlantic Ocean with an approximate population of 34,000, a gross domestic product of about $1 billion, and a per capita income of around $34,000, according to the 2017 CIA Factbook. Due to its small size, the territory faces acute challenges, including a small population; limited natural resources; heavy dependence on international trade; a trade deficit resulting from high imports and low exports; high transportation, energy and communications costs; high governing administrative costs; limited opportunity for economies of scale; high infrastructure construction, maintenance and operations costs; fragile economic pillars; and vulnerability to natural disasters like hurricanes, earthquakes, tsunamis and so on.
Hurricanes
Despite its small size, the VI, buoyed by the economic twin pillars (tourism and financial services), emerged with one of the highest standards of living and per capita incomes in the region. However, in September 2017, it suffered a setback when it was decimated by hurricanes Irma and Maria. The storms caused approximately $3.6 billion in facility damages, disrupting the economy (especially tourism) and employment. The storm damages changed lives and circumstances, with approximately 70 percent of homes being damaged. Many residents are still in various stages of repairing their homes. Moreover, the territory is deep in the throes of regaining its economic and social footing. It is in an extensive and costly rebuilding mode.
Election and challenges
A general election is scheduled for Feb. 25, and the territory faces challenges that will require tough decision-making by the 13 elected members in the House of Assembly. These challenges include economic growth, development, sustainability and diversification; infrastructure (roads, water, sewage, ports, electricity, drainage, telecommunications and gas); environmental resources preservation and protection; education; health; human capital investment; increasing violent and property crimes; skyrocketing cost of living; public safety; political and economic independence; civil service reform; and property insurance concerns. This is a long list of challenges and only a few will be briefly addressed in this commentary: economic growth, development, sustainability and diversification; infrastructure; human capital investment; education and health; and environmental preservation and protection.
Economy
The VI lacks the resources to support either a strong primary economy with industries such as fishing, forestry, mining minerals or energy drilling, or a strong secondary economy with industries such as manufacturing. Its economy is service-based, with tourism and financial services being the twin pillars. However, the economic pillars are fragile and a major stumble by either can cause the whole economy to tumble. Consequently, strong and focused measures must be taken to shore up both sectors.
Financial services generate some 60 percent of government revenue. However, the sector is facing some legislative storms from the United Kingdom and European Union. Thus, given the importance of financial services, strong and immediate actions are needed to protect its front, flanks and rear to sustain it for the longer term.
Moreover, in addition to strengthening and deepening the tourism and financial services sectors, simultaneous actions must be taken to diversify the economy. Diversifying the economy will be a heavy lift, but urgent action is needed.
There are various areas of potential economic diversification that may not be able to create a third economic pillar but collectively could: agriculture, light manufacturing, fishing, medical tourism, transportation and trade, back office operations, and the knowledge-based economy. Then there is the blue economy, which involves sustainable use of marine resources: exploring and exploiting the marine resources within the 12-mile territorial sea and 200-mile exclusive economic zone with industries such as coastal tourism, fishing, aquaculture, renewable energy sources, non-renewable energy sources, trade and so on.
Infrastructure
Strong economic growth, development, sustainability and diversification are heavily dependent on a world-class infrastructure system. In order for the territory to grow and compete, it needs a safe and reliable water supply; a reliable electricity supply; a structurally sound, functional, modern, safe road network; modern marine and air ports; safe, functional and effective drainage systems; and safe, modern sewage systems. Infrastructure investment, construction, operations and maintenance must be a top priority.
Education
Human capital is the territory’s primary resource. Though the VI sees itself as “first world,” effective investing in human capital is an area in need of action and improvement. Most importantly, the territory needs to invest in its citizens to reduce the need to recruit offshore labour to meet its needs. Moreover, moving forward into the 21st Century, developing a knowledge-based economy must be a key focus. A strong education foundation is a core requirement. Consequently, a strong education system must be a top priority on the territory’s list of needs.
As an example, consider Singapore, a small island nation (of around 270 square miles) where a knowledge-based economy thrives.
Health care
Every resident at some point also will need quality health care. Thus, accessible, affordable, available and quality health care should be a top priority to meet the health needs of all residents. Further, basic health care should be available to all and should not be based on income level. Some may see it as socialism, but government must be a key player in delivering quality health care to all. Like insurance, all residents will have to pool resources to share in the delivery cost. Furthermore, tourism is an important economic sector and a strong, quality medical system is needed for the territory to be a competitive destination that can effectively meet visitors’ health needs.
Environment
Tourism is based on terrestrial and marine resources, including the ocean, archeological sites, historical sites, nature tourism, dive sites and so on. These resources must be employed for economic growth and development protected for the use and benefit of generations yet unborn. The sea is a major draw for both bare boating and land-based tourists. As such, actions must be taken to maintain and sustain it in a healthy state, such as maintaining high water quality; protecting reefs, sea beds, mangroves, and marine flora and fauna; mitigating reuse of ponds; protecting dive sites and artefacts and so on. The protection must also extend to the Exclusive Economic Zone, a 200-mile offshore limit. Both the 12-mile territorial sea and the 200-mile EEZ may offer the opportunity for developing a third economic pillar.
In addition to marine resources, the air shed and other environmental resources must also be protected, and the extended border must be defended. Moreover, legislation must be put in place and enforced to protect environmental resources. Polluting and contaminating environmental resources drives visitors away to competing destinations.
At a crossroad
In summary, it seems as if at this election time the territory is at a crossroad and the current election is critical. As a result of the September 2017 hurricane devastation, the VI is in a rebuilding mode and needs strong leadership to chart a new course to guide it through these challenging times. Moreover, as the territory redevelops, it must do it from an established national development plan, which should apply regardless of which government is in power.
The electorate bears and must shoulder the burden of electing a new government to chart a new course and it must take its responsibility seriously.
Voting is a right that many sacrificed and fought for, and it should be exercised. Voting matters and every vote counts and makes a difference. Fellow citizens, register to vote, go to the polls and vote the territory’s interest, not self-interest. The territory needs you!