STATEMENT BY PREMIER AND MINISTER OF FINANCE
DR. THE HONOURABLE D. ORLANDO SMITH, OBE
MONDAY, MARCH 12, 2018
REBUILDING A STRONGER BVI TOGETHER
Ladies and Gentlemen,
After much reflection, prayer, widespread discussions with Government colleagues and with you; as Premier of the British Virgin Islands I have come to the decision we must move forward with the total and complete restoration of our Territory.
For the next few minutes I will tell you how together we will rebuild a stronger BVI.
It is now over six months since Hurricane Irma, one of the most powerful hurricanes in the history of the Caribbean struck the BVI. With the upcoming hurricane season less than three months away, we the people of this Territory cannot tarry another day in its restoration.
Six months ago Hurricane Irma slammed into our shores and left our beloved BVI resembling a browned out desolate waste land with mangled infrastructure, destroyed or roofless homes, twisted vehicles, galvanize strewn far and wide, you name it. She was also directly responsible for the loss of four of our loved ones who perished during her passage, and at least partly responsible for many others who have since passed in the aftermath. As a medical doctor I firmly believe that the stress and strain brought on by this catastrophic event contributed to the downturn in some of those individuals.
With God’s help though, we have come a long way: my heart soars every time I see on Facebook, ‘we have power’. Today nearly 100% of our power has been restored, our country is green again, schools are underway albeit in less than ideal circumstances, boats are sailing our beautiful waters, planes and ferries are arriving with many visitors daily, some cruise ships are making weekly calls, residents who sought refuge elsewhere are back at home at work, our financial services continue to tick over and our economy is beginning to inch forward. I am grateful to all from near and far for your help in getting us to this point. But ladies and gentlemen we still have a long long way to go!
I thank you for your invaluable input during the public consultation on the recovery. There were many who said it should have been earlier but we had to develop a framework for discussion on which to build. Your views have shaped the way forward and I am thankful to the officials in my Government who continue to refine your views, so that these can become important building blocks for a stronger recovery.
Ladies and Gentlemen, it is now time for us to swing into action to make our temporary, make shift facilities permanent again, it is time for us to take our children out of tents or temporary buildings and put them into comfortable, modern and efficient schools so that they can continue to produce the top results we have been seeing especially just before the hurricanes. It is time for us to repair the Community College that our late Chief Minister H. Lavity Stoutt left us as part of his great legacy. It is time for us to repair our roads throughout the Territory. It is time for the raw sewerage to stop running in our streets and ghuts. It is time for us to build a stronger and more resilient electricity grid. It is time for us to restore our criminal justice system including rebuilding accommodation for our judiciary. It is time for our prisoners housed in St Lucia to be back at Balsam Ghut where they can be in touch with their families and friends. It is time to find shelter for those made homeless, and yes it is time to make the best use of our natural resources.
This surge in essential activities will create the momentum and resources to keep our businesses – small and not so small - up and running, as well as open up new sectors, making for a stronger more solid economy. During this short term, our truckers and heavy equipment operators, for example, have done exceptionally well – some perhaps better than they ever have, with clearing up hurricane debris, transporting goods from the ports to our respective properties and so on. But in order for our truckers and local equipment operators to continue with this success, we need to continue these activities to get our economy back on track.
While it is true that we have not been grant aided since 1976, and have enjoyed a good standard of living for many years, the scale of this devastation says that we simply cannot accomplish these economic activities on our own. We need help! We need external funding.
And let me be clear: I am grateful for the support that we have received from the United Kingdom to date and for their willingness to listen and to negotiate with us – especially through their current representative, Governor Augustus Jaspert. So I am very happy that the UK has agreed to partner with us in rebuilding our Territory based on our vision for a more resilient and greener BVI.
And we must not for a moment see this as a yoke around our necks: because the UK will provide a guarantee for our borrowing, so that we will be able to borrow on much more favourable terms. For instance we can borrow at an interest rate of just under 1% compared to 3.5% that we would have to pay without the UK guarantee.
Whether we borrow $100 million per annum or less will be determined by our ability to effectively spend that money, or invest that money, in our future. This is a key point: we are not just spending money here, we are investing in our future. The $400 million dollars that the UK has agreed to guarantee is a maximum figure. We might find ourselves requiring less and indeed with your help in identifying priority projects we are still working out what that figure will be annually. The bottom line is that as a Territory we are in a position to access the monies needed to rebuild.
Which brings me now to explain to you the framework within which our recovery will happen. In describing this framework let me quote from the discussion document which many of you are now familiar with.
‘In order to drive an effective, efficient and transparent recovery process, the Government of the Virgin Islands aims to establish the British Virgin Islands Recovery and Development Agency (BVIRDA or the Agency) to implement the British Virgin Islands Recovery & Development Plan approved by the House of Assembly. This agency, established through legislation, and managed by an independent board supported by a secretariat, will allow for the delivery of activities in a transparent and accountable manner.
Setting up this Recovery Facility as a body with an independent board will allow for greater efficiency. And it’s being established through legislation and responsible to the House of Assembly will make for delivery of activities in a transparent and accountable manner, as well as at the same time instill donor confidence.
This is international best practice in situations where such extensive damage is experienced in a any country or Terrirtory.
Let’s bear in mind then two points here:
- It is our House of Assembly which will be responsible for bringing this Agency into effect by statute. It is our House of Assembly that will be responsible for approving projects to be carried out by the Agency, and
- Once the work of the Agency is completed, it will be disbanded.
And then there is the all-important question of funding of the Agency. So I quote again from the same document:
'The Government will establish a ring-fenced Resilience Fund, which will hold funds in custody for the BVI recovery effort, and funds will be accessed by the Agency. It will rely on the contributions from a variety of sources including investors, donors, financial institutions as well as individuals and corporations to support the implementation of the activities outlined in the Recovery and Development Plan.
The funds will be disbursed for the implementation of activities included in the Recovery and Development Plan, based on approval of the Board of the Agency. The multi-stakeholder nature of the Board allows decisions to be taken in an impartial and transparent manner while preserving the integrity of the Recovery and Development Plan.’
Ladies and gentlemen conditions like these are part of international best practice and have been around for many years. Let’s take the $65 million dollars recently approved by CDB for our rebuild: those funds will be managed and disbursed through their rules. It is true that they will be disbursed through our project management unit headed by our Engineer Dr. Glasgow, but once we determine which projects those funds will be allocated to, a transparent process approved by the CDB, the Lender will select the contractors. These projects will be overseen by CDB-approved engineers. The same rules as they relate to transparency and accountability apply. In that respect, the Agency is no different except that it is located in the BVI whereas CDB is located in Barbados.
I cannot emphasize enough the fact that we cannot rebuild on our own. We need financial support from beyond the BVI in the form of loans, grants and just plain donations. Those who will provide loan funding as well as those who will give grants in virtually all cases require a level of assurance that is best achieved through this Agency.
An Agency will by no means result in BVIslanders being overlooked for involvement. Our people will be given preference in the redevelopment of our country whether as architects, planners, environmentalists, engineers, contractors, builders, truckers and the like. Indeed the Legislation setting up the Agency must and will ensure that this is the case, as well as the fact that the Agency will be headed by an experienced and well respected BVIslander chosen by us. The Chief Executive, who will be equally carefully selected, will give further assurance.
I spoke earlier about the willingness of the Governor to negotiate with us for what is in the best interest of the Territory: we could not be comfortable with an Agency that was not headed by one of our own and I am pleased that that has been agreed. In terms of the composition of the Board it will be comprised of no more than nine persons including one person appointed by the Leader of the Opposition, one person appointed by the Government, another appointed by the UK and persons representing civil society and commerce.
With regard to financing of our rebuild I mentioned the $65 million approved by CDB for projects in specific areas including funding for some schools, roads, accommodation for judges and so on. I also emphasised that we need much more and that we need it now. The UK understands this and as part of the guarantee of up to 300 million pounds, any further loans for BVI recovery must be within the framework of the Agency I just described.
During our consultation, you yourselves identified a number of critical projects and activities needed if our country is to be more prosperous, including more training for our people in healthcare and education sectors, more effective management of our waste both solid as well as sewerage, a greater focus on agriculture and fisheries, and priority attention to renewable energy. I add to those the rebuilding of the Elmore Stoutt High School and the Bregado Flax Educational Centre. Whether it’s rebuilt to pre-Irma specifications or whatever we determine for the longer term for secondary education for our children will require serious money. We cannot get our children back into a proper high school without this money. I am happy that the resources needed for rebuilding our school and to make other projects a reality is available and I am happy that they flow through the Agency using the mechanisms I have described. The end result will be efficiency, transparency and accountability.
There are some amongst us who are of the view that we should build back slowly, without loans. Their view is that loans mean we are mortgaging our children’s future. Indeed, an individual of East End said it best when he said at one of our consultation meetings that trying to build back without the assistance being offered would most likely slow down the Territory’s economic growth for many years to come, and would instead be an injustice to our children who would be unnecessarily denied potential opportunities, to paraphrase him. Let us move forward in good faith and fix our county!
At our most recent House of Assembly meeting my response to one colleague voicing this view was that we would be failing our people by not accepting the loans available. Why? Because, for one, we would not be able to care for the most vulnerable amongst us – those who need a roof over their heads, but do not have the resources to build one back. The reality is that we can offer only very limited support from our own resources. The reality is that we need to get our people back to work in a comfortable and productive environment. The reality is that our residents need comfortable houses to live in, good roads to drive on, and a reliable electricity supply. We need a clean attractive environment with solid infrastructure because our people deserve it. And we need all these amenities to continue attracting visitors to our beautiful shores. These amenities require money – money that is available to us in the form of both loans and grants. Without investing in these amenities business will not only stagnate, but business will move elsewhere.
To take a ‘wait and see’ stance would be irresponsible and failing the people of this Territory. To say no to these arrangements we are essentially turning our backs on the redevelopment of our country. Today we must move forward expeditiously as time is not on our side.
I have to say in closing that we have been deliberating the Recovery Plan, the sources of funding and the policies to facilitate the recovery for too long, so much so that I feel at times that we have lost sight of the prize. It is now time to act! We cannot continue to look like a third world, bombed out, shell of who we were prior to September 6, 2017. Together let us today get on the path to reestablishing that beautiful BVI we sing about in our Territorial song, that country with a strong economy that is the envy of many, with happy and productive citizens, expectant and ambitious young people – all confident that our best days are still ahead.
Ladies and Gentlemen, fellow BVIslanders, let us work together to fix our beloved Territory.