At a time when the government’s recovery effort is severely delayed and egregiously underfunded, Premier Andrew Fahie should stop fear-mongering and work quickly with Governor Gus Jaspert to finalise a deal that will enable the territory to access the UK’s £300 million pound loan guarantee and other funding.
While the private sector has led the recovery in recent months, the government has been falling further and further behind. The results are obvious, and extremely concerning.
Repairs to the Elmore Stoutt High School are not yet complete, for example, and in the best-case scenario half of the student body will attend class in a temporary facility for one more year, with no plan put forward for what would happen next. Meanwhile, urgently needed repairs have not been completed on the Central Administration Building, police headquarters or the Road Town fire station, among others, and construction has not started on badly needed new projects like the National Emergency Operations Centre and the West End ferry terminal. There is no main branch of the public library, many hurricane shelters are not ready for another storm, the incinerator is not functioning, and roads that were hastily patched before the February election are falling apart again. The list goes on.
The biggest problem appears to be a lack of funding. Since Irma, the main source of recovery money has been a $65 million loan from the Caribbean Development Bank, but most of it has not been accessed yet because the government has struggled to meet CDB requirements.
The UK guarantee, which was first offered in November 2017, seems to us to be a reasonable offer that would allow the territory to borrow more easily and quickly at lower rates, potentially saving tens of millions of dollars and greatly accelerating the recovery process.
But the previous government did not access the guarantee before being voted out in February, instead apparently bogging down in discussions over the details of the conditions that would be imposed by the UK. We had hoped that the new government would pick up where its predecessor left off and get the job done quickly.
But now even the previous progress is in danger, and the new government seems to be going backwards. Six months after taking office, the premier is publicly calling for changes to agreements made by his predecessors that could require returning to the drawing board.
Mr. Fahie, for example, is calling for amendments to the Recovery and Development Agency Act, which is strange: As opposition leader, he voted for the law when the House of Assembly passed it in April 2018. He is also complaining about increased UK oversight in general.
The premier is right to carefully scrutinise every detail of the arrangement, but some of his criticisms were greatly exaggerated. He claimed, for example, that the UK government is demanding that the territory “basically hand over almost full control of the management of the territory’s finances” to the RDA. But the RDA would manage only the recovery money, not government’s regular revenue.
Moreover, the agency is overseen not by the UK but by a majority-Virgin Islander board chaired by a Virgin Islander.
Yes, the UK is represented on that board, and it therefore will get some level of input into the agency’s spending. UK officials doubtlessly also will be keeping closer tabs on the territory’s finances overall. Admittedly, this situation is not ideal: The territory fought long and hard for the degree of autonomy it enjoys today, and it should jealously guard its rights as it moves toward its eventual independence.
However, we do not see the UK conditions — which mostly are designed to ensure accountability, transparency and value for money — as particularly surprising or draconian considering that the UK is liable in the event of a loan default.
Moreover, the RDA — a temporary body which is scheduled to disband after five years — seems to us to be a well-conceived mechanism for ensuring that the recovery money, which belongs to taxpayers, is well spent. So far, it appears to be achieving that goal with the handful of projects it has been able to push forward given its apparently limited funding: It has transparently tendered contracts and efficiently handled projects under a system that gives preference to Virgin Islands businesses. Central government could learn a lot from that example.
If Mr. Fahie has evidence suggesting that the RDA is not in fact succeeding, he should disclose it. Otherwise, he should bite the bullet and work to obtain the loan guarantee so that the agency can be properly funded and the recovery can proceed in earnest.
His government should also prioritise the governance reforms that he promised repeatedly on the campaign trail, such as ethics legislation, a whistleblower law, a freedom-of-information act, and a public register of legislators’ interests. Without such measures in place, it saddens us to say that the UK conditions are probably necessary to ensure that the recovery money is not squandered. Successive administrations, after all, have failed to keep promises to implement such governance reforms, instead fostering a system of cronyism, political patronage and contract splitting that has left the territory with far too little to show for the substantial revenue it has earned in recent decades. Mr. Fahie’s government came to power promising to change the status quo in that regard, and we hope it will do so as it moves ahead with the recovery.
Currently, the situation is urgent. The VI is in the midst of hurricane season, and another Irma could come next week. In large part because of government’s recovery delays, the territory is far from ready.
Without a viable alternative, turning down the loan guarantee is not an option.