Premier Andrew A Fahie: This is about you, the people of the Virgin Islands (Report to the People On the Official Visit to the UK)

Statement

Premier's Office

Ministry of Finance

Topics:

H.M. the Queen, Recovery and Development Agency (RDA)

Release Date:

Tuesday, 17 September 2019 - 4:50pm

Statement by Hon. Andrew A Fahie
Premier of the Virgin Islands

This is about you, the people of the Virgin Islands
(Report to the People On the Official Visit to the UK)

September 17, 2019

Fellow Virgin Islanders and Residents,

A pleasant Good Day and God’s Blessings to you.

First let me take this time to thank God for allowing my delegation and I to travel to the UK and back home safely.

As you are aware, last Wednesday, I left the Territory with a delegation to hold discussions in London with officials of the United Kingdom Government, with respect to concerns held by the Virgin Islands Government with regard to some of the conditions attached to the UK Government’s offer of Loan Guarantees for Recovery and Development projects as a result of the damage incurred from Hurricanes Irma and Maria in 2017.

In keeping with my personal commitment, and that of your new government, to keep you informed on major issues that are likely to have significant impact on your affairs, interests and quality of life, I am here this afternoon to report to you on the outcome of this official trip.

This official trip originated from a request that I made to the Exchequer Secretary of HM Treasury in July, 2019.

The agenda was based on 10 objectives put forward by your Virgin Islands government, outlining our concerns with conditions attached to the loan guarantee offer, particularly with the view that the People of the Virgin Islands, in a transparent and accountable manner, must be the main beneficiaries of this recovery agenda.

The BVI’s delegation comprised of:

Hon Carvin Malone, Minister for Health and Social Development;
Mr Kedrick Malone, Permanent Secretary in the Office of the Premier;
Mr Glenroy Forbes, Financial Secretary;
Mrs Arliene T Penn, Director of Communications;
Mr Benito Wheatley, Special Envoy of the Premier; and
myself as Premier and Minister of Finance and leader of the delegation.

We were joined by Legal Consul/Operations Manager of BVI London Office, Ms Tracy Bradshaw and Senior Political Officer/Cultural Attaché, Ms Siobhan Flax.

The BVI team held a total of eight meetings with officials of the Foreign and Commonwealth Office (FCO), including its Director, Mr Ben Merrick; Ministers of the UK Government – Lord Tariq Ahmad of Wimbledon who is the Minister responsible for Overseas Territories, and Minister James Duddridge from the Department for Exiting the European Union (DEXEU); Baroness Patricia J Scotland, Secretary General of the Commonwealth Secretariat; and officials of Her Majesty’s Treasury.

I want to thank the UK Government officials for facilitating us with this meeting, and for the warm reception that was extended to us throughout the visit.

Also attending two of the meetings regarding the loan guarantee conditions was His Excellency the Governor, Mr. Augustus Jaspert, whom I also wish to thank for his involvement with my team during these discussions and for arranging the itinerary to facilitate the deliberations between the Virgin Islands Government and the FCO.

I must also thank the staff at BVI London House, as well as the team from the BVI Tourist Board, London Office, for their hospitality and support.

As leader of Government business here in the Virgin Islands, it remains key that the people understand what the £300 million loan guarantees, once activated, means for us today, but more so what it means for our six-year-old children and grandchildren.

Today, we will not be making a decision for just the present, but rather a decision that will determine the growth of our economy and the creation of industries.

Therefore, before going forward, I want to reiterate the point that what was on the table for discussion – and which still is - was nothing more than an offer from the UK government to stand as guarantor if the Virgin Islands Government decides to seek funding through loans for identified recovery and development projects.

There have been some loud voices, particularly in recent days, prodding the Government to: “Get on with it!” “Forget the conditions!” “Take the money!”

These are persons who know fully well that in this matter, there is no money from the UK Government for us to “take”.

The offer is not even a loan from the UK Government.

It is an offer to provide the guarantee for the BVI Government to apply for loans.

In fact, this is nothing new, since it has always been the policy that the UK Government must approve all borrowing by the Government of the Virgin Islands. However, this special loan guarantee being offered by the Government of the UK is an opportunity for us to get cheaper lending rates for any loans sought for the recovery. And while this is noteworthy, some of the conditions come with a high price down the road, and therefore required renegotiation.

Some of the loudest voices, who suddenly have all the answers today, did not consider these issues when they were in the seat negotiating on this very same matter.

They were at the centre of the unfortunate circumstances that led to the very stringent conditions being imposed on the BVI between 2012 and 2017, and beyond.

They are not owning up to that.

Instead they are pretending to be innocent as if they were nowhere around and have just landed white as snow.

They are demanding that this new government - your government, provide them with information on the very terms and conditions that they negotiated, alleging that this Government is hiding information – while in fact certain information was not as readily available in the Ministries as they ought to have been.

As a matter of fact, some of these missing documents were only obtained after the UK government included them as attachments in their responses to our letters of concern.

Ladies and gentlemen, it is said that fools rush in where angels fear to tread. And the facts and hindsight prove that your Government was right not to bow to the pressure from those quarters to rush in.

We were right to take a pause, to consult with you the people, to listen to our instincts, to meet with the officials of HM Treasury, the FCO and the Overseas Territories Minister, to ventilate our concerns and to ask for the conditions to be renegotiated in the best interest of the people of the Virgin Islands – as we have successfully done on this trip, to obtain maximum protection for the interests of the people of the BVI.

I believed from day one that not because we are in a vulnerable state at the moment due to the passage of the Hurricanes Irma and Maria, we should not make a permanent decision while in a temporary situation.

That is not in the DNA of the people in this Territory.

Any good doctor would know that before you administer medication to a sick patient, you have to consider the side effects and the long-term ramification of taking the medication.

In some cases, the side effects cause more damage than the illness itself.

Your government has been brought in when the medication has already been administered by someone else and it is up to us now to find a way to minimize the negative side effects that seem to have never been taken into consideration.

From day one, your government vowed that we will engage only in responsible governance. This means that we would always seek to make responsible decisions to give the BVI the upper hand, not the lower hand, or no hand at all. This means that we would make responsible choices that would put you the people of the BVI first not last; in front and not behind.

I am happy to report that our visit to the UK was a resounding success.

The discussions were cordial, productive and conducted in an atmosphere of mutual respect. All parties were able to arrive at common ground.

Your government achieved the primary objectives of this trip, which I will go into shortly.

But first, it is necessary to place on the record certain revelations that came out of this visit, some of which would have remained secret forever if you the people had not said “enough is enough” to the previous administration on February 25.

If you had not voted out the last government the status quo would have remained intact and become entrenched forever, while the majority of the people would have been suffering from the side effects without knowing why.

These things would have gone undetected if your new government had not done the responsible thing and approached the UK Government for a meeting to discuss what seemed to be very straight-forward issues, but which were being strongly and suspiciously complicated by certain quarters.

The discourse that took place in London confirmed that the very stringent conditions that were imposed on the BVI’s borrowing and financial management in the 2012 Protocols for Effective Financial Management and subsequent arrangements, were as a direct consequence of the conduct of the previous BVI government.

I know that some will wish to say right now that I need to leave this alone, and why I am going there. But the truth and the untold stories must be told, so that presently and down the road, you will know exactly what your new six-months-old government is responsible for and what has to be attributed elsewhere.

These conditions attached to the UK Loan Guarantee were brought about because of many transgressions such as a lack of audited financial statements, a lack of prudency with multi-million-dollar contracts, a lack of transparency and information, and more, which would have escalated if it was not for the hurricanes in 2017.

You would recall us saying that the previous government breached the Protocols for Effective Financial Management - which they negotiated and signed on to; and then they went to the House of Assembly in a most disrespectful manner, lauding themselves that during the discussion they had the UK eating out of the palm of their hands.

Now, two years later, like Rip van Winkle, they have awoken, and are trying to pressure your new six-months-old government to “hurry up”, “ask no questions”, “do not look out for the best interest of the people of the Virgin Islands” and “just take the money” and “get on with the recovery”.

They are even trying to get you, the people, to believe that no recovery has been taking place. But, my people, can I tell you that this is not true?

A lot of work has been going on towards the recovery of this Territory.

The L-Shaped building at the Elmore Stoutt High School, now renamed the L Adorothy Turnbull Building, is standing strong in blue and yellow, with many resilient features to mitigate impacts. This is part of our recovery.

We also had the official handover ceremony from donors of the Bregado Flax Educational Centre. This is part of our recovery.

Completion of repair works and the subsequent opening of the new Enis Adams Primary School. This is part of our recovery.

The Clarence Thomas building has been fixed to ensure that the students going there will also be able to learn comfortably. This is part of our recovery.

Other schools throughout the Territory are finally being repaired after two years and our children are finally returning to full time classes with their teachers. This is part of our recovery.

Finally paying our hard working and dedicated public officers their long overdue increments, after they worked and continue to work in such poor conditions after Hurricanes Irma and Maria. This is part of our recovery.

The West End police station has been rebuilt. This is part of our recovery.

This Jost Van Dyke Police Station has been rebuilt. This is part of our recovery.

The temporary West End Ferry Terminal was opened, with accommodation provided for Customs and Immigration. This is part of our recovery.

The 911 Call Centre is being fixed and will be one of the top centres in the Caribbean. This is part of our recovery.

The public roads in some areas in the Territory have been resurfaced. Rehabilitation of the Central Administration Complex, after being neglected for two years, is finally taking place under the leadership of the Minister for Transportation, Works and Utilities. And there are more projects taking place. All of this is contributing daily to the recovery of the BVI. These are all part of our recovery.

Can I remind the few naysayers that “Rome was not built in a day”, and that our forefathers took their time and built this Territory without saddling their future generations with unnecessary debt. And likewise, we the present generation have an obligation to do the same.

Can we do it? Yes, we can!

Must we do it? Yes, we must!

Will we do it? Yes, we will!

Because the eyes of the future are looking back on us, hoping that we get it right. Let us not disappoint the future, and let us not dishonor the legacy of our forefathers.

This is what a responsible government does.

Therefore, this talk about no recovery taking place is a myth, fabricated to try to force the hand of your government into rushing to accept unfavourable terms that would have disadvantaged you the people, and benefitted no-one except the already-established status quo and other financial institutions who are lined up and hiding in the wings, waiting to swoop in.

You must ask yourself, why would anyone embark on such a feverish last-ditched attempt to try to get us to blindly and quickly accept clearly unfavourable terms, when the door for renegotiation was opened by the UK Government?

Ladies and gentlemen, during the deliberations in London, our fears were confirmed that conditions attached to the loan guarantee would not have allowed the people of the BVI to benefit in the way that they should from the projects to be undertaken.

Again, you would recall me saying that our contractors and skilled tradesmen were being locked out of these opportunities. We were able to restore some hope to this situation during the talks.

It was shocking to learn that the opportunity to access grants following the 2017 disasters was not taken up by the previous administration. This would have allowed families displaced by Irma, many of whom are still not living in their own homes, to obtain money to rebuild their homes – money which they would not have had to pay back.

We learned that the UK Government was told that you, the people of the Virgin Islands, did not need the money, and that the BVI preferred loans for construction projects instead.

Similarly, we also learnt that an offer of aid from another jurisdiction was declined by a high-ranking official. Unfortunately, these ships have sailed since 2017, and those opportunities cannot be brought back.

The widespread perception among Virgin Islanders is that we were treated poorly by the UK during our time of distress, and this has taken a toll on BVI-UK relations. And now, we have found out that these tensions were fueled by deliberate untruths.

Notwithstanding this, I am happy to report that the issues that were flagged by your government – which we have been highlighting over the past several months – fell on fertile ground in London, once we were able to speak directly with the officials of HM Treasury and Lord Ahmad, who have assured us that it is their wish to see that the people of the BVI benefit in a tangible way from any loans that materialize from this guarantee arrangement.

In our letter to the UK Treasury officials outlining the purpose for which the visit was requested, your BVI Government stated that the borrowing ratios in the Debt Section of the Protocols for Effective Financial Management did not sufficiently consider the impact of natural disasters and catastrophic events which can place the Territory in an unforeseen vulnerable position.

The UK Government stated to us that it is prepared to consider including a reference to natural disasters and catastrophic events in the Debt Section of the Protocols for Effective Financial Management.

Your government had raised concerns over the treatment the BVI would receive if we exceeded the borrowing ratios contained in the Protocols for Effective Financial Management.

This is something all sides have long acknowledged as highly likely, given the current circumstances.

The UK Government stated that it is prepared to work with BVI Government on coming back into compliance with the debt ratio if borrowing on the loan guarantee would cause the BVI to exceed the ratios.

Your new BVI Government advocated that the Financial Secretary should be able to access the Recovery and Development Act Trust Fund for the expressed purpose of being able to return any funds borrowed directly by the BVI Government at the request of the relevant lending institution on account of the funds in question not being administered in accordance with that lending institution’s agreed rules and guidelines.

The UK Government has agreed to consider this condition, and the BVI Government has been asked to submit some additional information with respect to this issue.

Your BVI Government has been saying that not all funds received or funds allocated for all projects must be put into the Recovery and Development Agency Trust Fund.

Your BVI Government has been saying that recovery is one thing and development is another.

The UK Government agreed to consider the direct administration by the BVI Government of other sources of funds for investment in the recovery besides those borrowed on the loan guarantee to support building and rebuilding.

These agreements pave the way for deliberations to open up and continue on other items that were placed on the agenda by the BVI Government, some of which are inter-woven with the above-mentioned issues.

With this new development, your Government has been asked to prepare a plan of action to present to the UK Government by September 27 for moving forward.

To assist this process and later activities, the UK Government has opted for the setting up of a special steering committee to enable more direct communication between the Virgin Islands Government and HM Treasury.

I can also report that our concerns with respect to ambiguous language that was used in some of the documentation, such as the High Level Framework for UK Support for BVI Hurricane Recovery, will be revisited in the best interest of you the people of the Virgin Islands. This includes reference to the divestment of public assets.

As your Premier, I am relieved that, through these meetings, with God as our guide, your Government has been able to redirect the focus of this Loan Guarantee matter back to you, the people of this Territory — for glaringly missing from the recovery agenda was you and your needs.

Your Government is a firm believer that the BVI will never fully recover, unless the people recover.

Your Government is a firm believer that the BVI will never be truly resilient, unless the people become resilient.

We were able to return the focus on you, the people, by convincing the UK officials that the people of the British Virgin Islands turned a new page on February 25, 2019; that your new government has a different philosophy from that of our predecessors; and that our vision genuinely puts the welfare of the present and future generations of Virgin Islanders first and foremost.

Ladies and gentlemen, we have crossed hurdles, and there are a few more ahead to be crossed. But there is now mutual understanding and a clear commitment from both the Virgin Islands Government and the UK Government to ensuring that the people of the BVI must be at the forefront, and that you must benefit from any loans accessed through this guarantee.

Your BVI Government is committed to ensuring that procurement for projects to rebuild and develop the BVI do not exclude the BVI excavator operator, the BVI truck owner, the BVI tradesmen and the BVI businesses.

For we know all too well that when the BVI excavator — the breadwinner of his family — is paid, he can afford to keep the roof over their heads. The children can go to school on a full stomach. College tuitions can be paid. Mortgages and rent can be paid. Transportation can be purchased and filled with gas. Family vacations can be taken. The monies will be able to circulate in our economy multiple times enabling our national flow of income to become stronger. Our economy becomes stronger and our social ills will be significantly reduced. Our people will not be onlookers of progress but will be participants in the progress. Offerings to God can be made to receive more blessings in abundance.

This formula worked for our forefathers, and in a modernised form, your government will make it work for us. Only though this course of action will our Territory become resilient.

This is just one of the reasons why those conditions of the loan guarantee that are of concern to us must not be implied, but they must be written clearly, in “black and white”.

Because a main part of the Territory’s recovery and resilience is ensuring that our local businesses are able to get back on their feet, to strengthen their capacity, and to become resilient.

Your government has been saying that we cannot let all of these funds be flown away by foreign contractors.

We cannot take loans and build other countries, their businesses and their economies, while our people continue to struggle to make ends meet, and while doing so, we are still expected to pay back those loan monies which our people have never seen or experienced, with interest.

No way, Jose!

That is not right. That will never be right.

That is a set up, and can only lead to a failure of our economy.

But, NOT UNDER THIS GOVERNMENT’S WATCH!

And, you the people should never encourage or expect of us to strengthen with the current status quo whose present direction would leave you, us, and generations unborn as paupers.

By utilizing as much local input as possible, we can ensure that some of this money goes towards improving the condition of our people; it will circulate through local businesses as cash flow; it will work within the BVI economy to assist the people of the BVI in repaying those loans.

There are many persons who still have no homes following Irma. They have not completed their repairs two years after the disaster; not because they do not want to, but they cannot because of financial constraints beyond their control such as rising bank interest and insurance costs, among others.

Some are still going through trauma even as we face new storms. Some are still battling with insurance companies and the banks to get their just due. These areas, among others that are affecting you the people of the Virgin Islands, must be factored into the discussion on recovery and resilience.

That is why these negotiations are about you, the people.

Putting money and opportunities directly in your hands in an accountable and transparent manner.

This China Cabinet mentality of the stranger eating from fine China and those at home eating from spall metal cups and plates is a thing of the past.

While a lot of the talk is on one side of the recovery effort, which is the infrastructure, many have forgotten that there are people whom we must also focus on.

Again, I stress, that it is your government’s firm belief that the BVI will only recover when our people recover, and recovery cannot take place without the recovery of our people. That was the mindset of the team when we left for the UK and it still remains.

To this end, your government is working though the Ministry of Health and Social Development to introduce a new initiative to provide qualified individuals with some money to enable them to purchase materials so they can repair their homes and become more resilient.

This government is making more moneys available for our citizens to access scholarships to further their resilience by obtaining Associates Degrees, Bachelors Degrees, Masters Degrees and Doctorates.