COMMENTARY — VI advised to assess its ‘capital mix’

It is important to assess how much of the territory’s capital mix — wealth-generating assets, with their associated supply and value chains — is in the hands of the public and government and how much is in the hands of the private sector, including non-profit organisations.
Many related questions arise. What capital assets do alien interests own, for instance? How does capital respond to specific actions from managers and investors? How does the local culture affect the mix?
The capital mix decides the nature, scope and direction of the Virgin Islands’ economy and wider society. And the effective management of capital drives national prosperity.

Optimal scenario

When capital is used optimally, land, human resources and technology lead to employment and management opportunities for natives and profit share for local investors. This scenario is crucial for economic prosperity.
Are the VI’s value and supply chains — the stages in the flow of capital from input to output — adding value as it gets to the consumer? Is the capital mix appropriately defined, and adopted by government and stakeholders to increase national output — or gross domestic product and national revenue?
Can the territory’s wealth-generating assets be accurately valued? Is there a method of valuation? Which sector of the economy — for example, tourism, financial services or agriculture — has potential to increase in value through added human effort? What value and supply chains offer greater revenues to their various sectors?

Value chains

An important factor of the territory’s wealth-generating assets is the revenues earned from the value and supply chains within various sectors. A sector is composed of value and supply chains: in effect, the businesses and organisations that operate in the sector and the various stages from start to finish of providing a product or service.
Especially important is how these value and supply chains rise in value as they move through the different stages of production or service — up until a product or service is in the marketplace. That flow of capital decides the nature, scope and productivity of the VI economy.