If a motion passed by lawmakers onMondayaccomplishes its goal, government might be able to pay its bills in a timelier manner.
The House of Assembly approved a $25 million line of credit from CIBC FirstCaribbean International Bank after a day of debate that saw the two opposition members criticise the plan and ultimately vote against it.
Premier Dr. Orlando Smith defended the credit line, which is designed to provide government with “working capital support,” according to the agenda for the HOA meeting.
After the 2008 financial crisis, Dr. Smith explained, the government used much of its savings to avoid reducing the size of the civil service or cutting the salaries of public officers. However, reduced revenue and savings forced government to significantly delay repaying many debts to local businesses, the premier said.
While current government cash assets have climbed to just over $71 million, it is necessary to have an ample reserve fund so the territory can respond to potential disasters like hurricanes or earthquakes, according to the premier. He noted that the credit line would allow those cash assets to stay untouched while simultaneously improving government’s relationship with businesses.
“We have decided to be able to have a facility to better manage the cash flow, in order so the persons who do business with the government do not continue to be affected,” he said.
However, opposition member Andrew Fahie (R-D1) said he couldn’t support the motion without seeing more information.
“In order to get the $25 million loan, the government of the Virgin Islands would have had to give FirstCaribbean Bank some sort of financial statement,” Mr. Fahie said. “No one just walks into a bank and verbally requests a $25 million overdraft or line of credit and gets it just so.”
Mr. Fahie said he would like the documents to become public, so he could know fully what he is voting for or against.
See the April 28, 2016 edition for full coverage.
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