There are few times in the history of any society where opportunity presents itself more than once. In many ways, the Virgin Islands has bucked regional economic trends over the last decade and maintained a fairly stable economic situation. This stability, however, has been cracking for some time as the current global economic chapter changes.
With this in mind, it is imperative for the newly elected National Democratic Party government and its counterparts around the Caribbean to diversify their economies. In order to achieve the needed level of effective diversification, the newly formed government will need to create an environment in which “an ocean of new ideas” can be formed, critiqued and implemented.
One VI
It is often very difficult to debate the job performance of any political party without viewing it through the lens of our personal political affiliations. This is both unfortunate and a huge barrier towards achieving progress. The Virgin Islands Party and NDP governments are filled with men and women who love the VI, and from this love comes ideas that they feel will best move the territory forward and create opportunity for everyone.
It is important to acknowledge this fact, because the sooner we as Virgin Islanders adopt this view, the faster we can eliminate the false characterisations of our leaders that limit our progress and create unnecessary divisions.
The biggest challenge the VI faces going forward is the same challenge that many countries around the world are now facing. It’s a challenge of finding ways to create fiscally sound footing while putting steps in place to ensure economic expansion.
Implementing the two steps simultaneously has proved to be incredibly difficult, even for the world’s most advanced economies. Yet watching this difficulty should allow the VI to learn from the mistakes of those economies and draw the necessary conclusions that will enable the territory to prosper fiscally and economically.
Every major invention in world history starts with an idea. An idea often seems farfetched when viewed in the moment but is unveiled as genius once it comes to fruition. The same is true for economic policy, only these ideas can be further perfected due to the fact that a multitude of intellectual ideas can be incorporated. With this in mind, it’s time for the VI to make some big changes to its current economic pillars and expand on them in new ways.
Education is the single most important pillar of any society. The world economy is similar to a financial market in that it forces the policy solutions necessary to achieve ultimate success. The VI has found itself in the fortunate position of receiving substantial revenue from wealthy financial institutions looking to register their companies overseas.
However, this revenue hasn’t translated into gross-domestic-product growth due to the fact that the local workforce hasn’t obtained the necessary training and experience to gain employment in this area.
It is time to introduce financial services as a major subject focus at the high school level in order to ensure that our citizens not only take part in this lucrative industry, but also become leaders for generations to come. Birthing a new generation of locally owned investment banks, hedge funds and financial advisors will create revenue for the territory and make our human capital marketable to international financial institutions.
As economic power has re-distributed over the last decade, countries like Brazil, Russia, India and China have become the focus of much investment and economic opportunity. This creates a grand opportunity for the VI to refocus its efforts on these relatively untapped markets for potential tourism business. Strong consideration should be given to creating a permanent presence in each of these countries in order to learn the marketplace and create the necessary relationships that will enable the VI to open up new income streams. Tourism income is like an investment portfolio: It must be diversified in order to be protected from one source’s economic fluctuation.
Financial services
The VI has become one of the top offshore financial destinations in the world. This economic sector needs to be considerably expanded in order to not only increase revenue to the territory, but to work in conjunction with the previously mentioned education reforms in order to promote the VI as a potential hiring hub for international companies.
At a minimum, strong consideration should be given to establishing a presence in the United States and the United Kingdom, being that the vast majority of companies registered in the VI are from these countries. In order to increase revenue from any existing stream, the necessary investments must be made to ensure the right pieces are in place.
The most important step the VI can take going forward is putting together a fiscal strategy that will put the territory on sound footing and allow for the necessary investments in the VI going forward.
This will have to come from making painful decisions regarding spending prioritisation, creating new revenue streams and making strategic decisions to economically empower citizens in order to make up for a decrease in government spending.
A fiscally healthy VI not only gives a solid foundation to the economy, but also potentially paves the way for the creation of additional revenue vehicles such as government bonds that can be sold to local and international investors.
Going forward
These are only a few ideas that can be considered, or perhaps debated and perfected. Nonetheless, however, ideas are needed in order for the VI to place itself in a position to lead the Caribbean in this decade.
The NDP has a unique opportunity, along with a strong mandate from the people, to push forward with a new direction. The previous two elections have shown that commitments to either party are not open-ended and support is strictly results based. The VI electorate is looking towards the future, and it’s now up to the NDP to shape that future.