2001 Budget Tops $185 Million
In 2001, the government of the Virgin Islands expects to collect $185,600,000 in revenue, it was announced here Tuesday. Chief Minister and Minister of Finance the Honourable Ralph T. O'Neal made the announcement as he presented his 6th consecutive budget address in the Legislative Council, under the theme "Gateway to the Future".
The Chief Minister focused on the need for increased planning and execution. He presented the address in the context of the global and regional perspective, reflected on the past and looked towards the future, outlined the fiscal domestic performance for 2000 and the plans for each government department, Ministry and statutory board. "The revenue estimates reflect projected growth of over 54% in six years," he told the 18th Sitting of the 1st Session of the 14th Legislative Council of the Virgin Islands. Recurrent expenditure is estimated at $145,328,300, contributions to the Capital Fund will total $35,826,045 and contributions to the Disaster Relief Fund will be $1M. The estimated contributions to the reserves will be $3,445,655. Provisions have been made for funding for capital projects to the tune of $109,426,045. Of these funds, $38,376,045 are from local sources ($35,826,045 from the recurrent budget and $2,550,000 as a contribution from the Transportation Network [land, air and sea] Improvement Fund) and $71,050,000 (loan funds approved) are from external sources.
Recurrent revenue for 2000 is expected to exceed a total of $175M, which is an increase of approximately $18M over that of 1999, by some 11%. For the period ending 31 December 2000, the public debt (Central Government) is estimated to be $37,959,128 and the national debt (including contingent liabilities) is estimated to be $84,620,794. National debt for 2000 has increased over that of 1999 by some $9,756,392 or 12%. Contingent liabilities total $46,661,666. "As regards potential international borrowing criteria, the BVI is at 70% of its borrowing capacity, including envisaged borrowings," the Minister reported. He explained that the increase in debt both nationally and publicly is a result of much needed improvements to the territory's infrastructure and general services that impact the quality of life.
As at the end of the third quarter, total bank deposits stood at two billion, six hundred and forty five million, five hundred and sixty two thousand dollars, with local deposits at $1,055,546,000. Total loans and advances for the corresponding period were $593,137,000, with domestic loans and advances at $520,110,000. In his budget presentation, Hon. O'Neal spoke to the external influences that affect the BVI economy, such as the increase in oil prices, the inconsistency of the financial markets in Europe and the decrease in the Dow Jones Industrial Average. He also mentioned the many challenges facing the Caribbean in its inability to unify as an economic force to lobby its position internationally, the threats in the arena of financial services, tourism and trade and the fact that non borrowing member countries of the Caribbean Development Bank are now ceasing contributions to new financial packages to inject funds into the bank. However, Hon. O'Neal said the local economy continues to reflect positive growth. The Gross Domestic Product (GDP) for 2000 is approximately $682,830. This reflects a growth of $28,773 or 4.4% over that of 1999. The annual rate of inflation for 1999 stood at 2.3%. The estimated rate of inflation for 2000, as at the end of the third quarter, was 3.4%, an increase over last year. Chief Minister O'Neal looked back at the pledges and commitments of his administration in 1997 and proudly noted that the "cries of duty" from the people were answered through the completion of a number of infrastructural projects, improvements to the education system, enhancing the culture of the BVI and other improvements in the service provided by government. Looking at the vital tourism industry, the Finance Minister said projections indicate that the travel and tourism industry will flourish in 2001 and beyond. In 1998, visitor spending totalled $210.8M. He announced an increase in the Board's allotment by some $1.9M, to a total annual subvention of $7.9M. "If the country is to continue to optimise the benefits from tourism, there is the need for a greater injection of capital in promotion and product enhancement."
Turning to the other economic twin pillar of financial services, Mr. O'Neal said preliminary indications suggest that the turnout from the territory's financial sector activities in 2000 will be at least consistent with that from our record year 1999. "The Department is intensifying its efforts to make the BVI more attractive as a situs for mega growth." He said new and amended legislation would be brought to the House shortly to this end. Government depends on the financial services industry for approximately 50% of total revenue. "Mr. Speaker, Sir, this territory has progressed significantly in recent years. This is a testament to the vision of our forefathers and their faith in the people and in the country," the Chief Minister stated. He pointed out that this progress has been in the midst of tribulations and hardship. "The road has not been always an easy one and I wish to put on record that future generations must be prepared to toil in order to amass to great things and prosperity." He also urged the leaders in the Legislature to set the primary example and unite for the common good.
Debate on the merits and principles of the Bill entitled: Appropriations (2001) Act, 2000 has been deferred until a later date. The annual estimates for the year 2001 were referred to the Standing Finance Committee. This was the fourth consecutive year the estimates were laid before year's end, in keeping with a commitment from the Chief Minister. He expressed disappointment yet about the lack of compliance by senior officers to budgetary schedules to ensure timely completion. "This is the last year it will occur," he declared. Hon. O'Neal said for the 2002 exercise, deadlines that lapse will mean forfeiture of monies and/or opportunities and those Ministries and/or Departments that are adhering to the rules and policies will reap the benefits. Three Bills were down to be brought to the House during Tuesday's sitting, but the Order of the Day was amended to delete that order of business. The Attorney General was expected to move the Introduction and First Reading of the Bill entitled "Anti-Discrimination Act, 2000" and the Second and Third Readings of the "Eastern Caribbean Supreme Court (Virgin Islands) (Amendment) Act, 2000 and the "Interpretation (Amendment) Act, 2000".