Statement By Premier And Minister Of Finance Dr. The Honourable D. Orlando Smith,
OBE At The Fourth Sitting Of The Fourth Session Of The Second House Of Assembly Of The Virgin Islands
Thursday March 12, 2015
Financial Services Industry Report:
Building On A Thriving & Sustainable Financial Services Sector
In The British Virgin Islands
With your kind permission, I wish to make a statement on a study which my Government undertook in relation to our financial services sector.
Much of what I say here is largely outlined in the foreword of the report entitled “Building on a Thriving and Sustainable Financial Services Sector”.
It is essential to be aware that our jurisdiction is at a critical point in its history.
For three decades, we experienced tremendous growth in our Financial Services industry.
We became one of the largest domiciles for company incorporations, and we established a global brand that reached through the Americas, into Europe, and across the Asia Pacific Region.
Financial Services directly account for over 60 percent of our government revenues, and likely upwards of 80 percent, if indirect sources are included.
Financial Services fuel our economy, create our jobs, and fund public services such as education, healthcare, roads and other infrastructure.
For the last few years however, we have faced challenges that may threaten the core of our competitive position in Financial Services.
Rising international pressure and new competitors have slowed down our incorporations business.
We must, therefore, further diversify our industry through more value-added activities and offer a wider range of services beyond our traditional business.
At the same time we have become critically aware of gaps in capabilities that would allow us to better weather similar storms and sustain the sector in the future.
My Administration came into Office in November of 2011; by early January of 2012, I had begun to consult with the Financial Services Commission, other Government agencies including the BVI International Finance Centre, the private sector and other stake holders about how best to reinvigorate the industry and set it on a firm footing for the long term benefit of the people of this Territory.
I am satisfied that over the last two years or so through various initiatives a framework for the further development of our financial services has been laid by our financial services experts in Government and Industry.
Building on that framework, my Government commissioned this capstone initiative; an intense three-month effort facilitated by global consultants Mckinsey, with involvement of the industry and other stakeholders to lay out a pragmatic strategy and implementation plan to ensure a thriving and sustainable Financial Services sector.
I am pleased to share a report with this Honourable House which contains the findings and recommendations of that effort.
It identifies the problems and challenges within the financial services sector and provides solutions for addressing those challenges to ensure the survival of this very vital industry.
The industry stakeholders played a very significant role in providing the necessary information and feedback as to the current state and the need for future development and growth, as well as identifying and prioritising the initiatives for implementation.
A number of meetings and interviews were held with both private and public sector stakeholders through the steering, local and international advisory groups as well as with key individuals within the government and private sector.
The main focus was on establishing a strategic framework for the future of the BVI Financial Services sector.
It comprised three phases, where phase one focused on taking stock of and reviewing the current state and future outlook; phase two focused on setting the vision, agreeing on strategic pillars and priority initiatives; and phase three focused on laying out an implementation plan and pushing the initiatives forward.
Our strategic direction for BVI was agreed as follows:
- to remain a world leader in the core business of company incorporations by improving our reputation and level of customer service;
- to expand into value-added services by attracting and retaining top talent, from wherever it resides, as well as developing BVIslander capabilities, and making the BVI an exceptionally convenient destination for business, through investments in infrastructure; and
- to build best-in-class enabling mechanisms for the Financial Services industry – such as a Delivery Unit, and vigorous marketing, promotion and business development functions.
In addition, 40 initiatives were identified which could be explored to further develop and enhance the industry. From those initiatives, 10 top priority initiatives were agreed for timely implementation.
The Report is completely frank in identifying the problems the industry is facing. More importantly however the Report provides a framework for correcting these problems and for revitalizing the industry and placing it on an even sounder footing.
In this regard, I am pleased at the bipartisan manner in which it was developed and trust that this would continue as we move to implement the recommendations, as solving the issues at hand is vital to the longevity of our jurisdiction and the livelihood of our community.
It will require all of us – the people of the BVI, government and industry – to band together and prioritise our long-term future.
I, personally, am committed to seeing through the implementation of these efforts, and we have already started acting on some of the recommendations.
I hope that this report serves as a roadmap for our Territory, supporting us as we come together to build a brighter future for the Virgin Islands.