Governor Gus Jaspert signed off on the Recovery and Development Agency Act on Thursday, initiating the process that should allow the Virgin Islands to accept the United Kingdom’s £300 million loan guarantee.
That process will involve “negotiations with potential lenders, discussion with UK treasury officials and ultimately the approval of the UK Parliament,” Mr. Jaspert explained in a statement.
The governor’s signature came more than two weeks after House of Assembly members passed the bill with a 10-2 vote. The final draft of the bill has yet to be made public, though Premier Dr. Orlando Smith did acknowledge after committee stage that it was passed with amendments.
Mr. Jaspert could not be reached for comment regarding whether any amendments HOA members added to the bill in the committee stage caused him to postpone its signing.
Dr. Smith, however, chalked up the delay to normal legislative proceedings.
“Once the bill has been debated, and especially during the committee stage, there are often quite a lot of amendments that are made to the bill,” he said in a press conference on Thursday, adding, “Once that is done it then has to go to the clerk of the House to get those amendments written in properly. It has to go to the Attorney General’s Office to make sure everything is correct. … After all that is completed, then it goes to the governor for signing. Sometimes it takes a while, sometimes it happens very quickly.”
The governor signed the bill as it was passed in committee stage, Dr. Smith (R-at large) added.
Mr. Jaspert noted in his statement, however, that government did make some assurances to him.
“The premier has confirmed that the appointment of the most senior staff to the agency and the procurement regulations Cabinet will approve will be free from political influence in order to safeguard independence,” he said.
The bill’s passage came after a contentious public and backroom debate that cut across party lines and appeared to split government’s frontbench and backbench into two disparate factions.
In the end, only government backbencher Mitch Turnbull (R-D2) and opposition member Julian Fraser (R-D3) voted against the bill. Mr. Turnbull’s fellow backbencher, Delores Christopher (R-D5), spoke passionately against the bill during the debate but was absent for the roll call.
The loan guarantee means the UK will assume the VI’s recovery-related debt obligations should the territory default.
While no lawmaker appeared to doubt the usefulness of such assistance, both the bill’s initial and final opponents argued that the conditions set out by the UK were insulting and represented a retrograde level of colonial control.
“Because we were hit by two hurricanes, all of the sudden [the UK] sees an opportunity now to take an advantage of our vulnerability,” said Health and Social Development Minister Ronnie Skelton (R-at large), who ended up voting for the bill. “Instead of trying to help us, all of these rules are coming down. … If they are taking my constitutional rights away from me as a minister to give to anybody else, I have a problem.”
During the debate, many more lawmakers expressed that sentiment than the final tally reflected: Prior to the bill’s committee stage, it was unclear whether it had the votes necessary to pass. In addition to Mr. Skelton, who did express an openness to considering amendments, four out of six backbenchers spoke out strongly against the bill; another, Marlon Penn (R-D8), voiced his qualms with certain aspects of it; and both opposition members raised concerns as well, leaving open the possibility that a seven- or eight-member majority could have come together to reject the act.
Dr. Smith has consistently supported the act, arguing numerous times that the Recovery and Development Agency’s conditions are standard procedure for loan guarantees and fall in line with international best practices.
The loan guarantee would also allow the VI to borrow with interest rates of less than one percent instead of the 3.5 percent that would be required otherwise, according to the premier.
And even accessing higher-interest loans without the guarantee could be difficult: In HOA last month, Dr. Smith noted that government had already reached out to Rothschild, FirstCaribbean International Bank, Banco Popular, Lloyds Bank, the Caribbean Development Bank and the Royal Bank of Scotland.
“Almost without exception, these financial institutions have required some indication as to the tenor of the UK guarantee,” he explained. “We have not had any direct offers of financing except in the case of CDB.”