As part of the BVI rebuilding efforts the United Kingdom Government has offered to guarantee a loan for the Territory. However, there are some residents who disagree with the United Kingdom Government loan requirements and Premier and Minister for Finance Dr. the Hon. D. Orlando Smith addressed the points raised against the move head on this week.
The fact that some are not in favor of the UK loan guarantee agreement was made obvious two weeks ago when a large billboard appeared in the vicinity of the Road Town Roundabout urging a stance against the loan guarantee agreement.
The billboard was subsequently removed and was followed by a flyer circulated via Whatsapp calling for support of the loan guarantee agreement. The situation was quietly debated until 12 March when Premier Smith gave a Territorial address that touched on some of the points that were mentioned in arguments against the loan guarantee.
Attacking the comments directly the Minister for Finance stated that some see the loan as a means of mortgaging the future of the next generation: “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!”
The Premier pointed out that the loan is necessary in order to rebuild the Territory and stated that he cannot emphasize enough the fact that the Territory cannot rebuild on its 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.”
Hon. Smith explained that Government is aiming 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, he said will be 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.
One of the chief concern amongst those opposing is that the loan which based on the UK guarantee can be up to $400M may become a noose around the BVI’s neck and hurl the Territory down a slippery slope that ultimately cause it to lose its autonomy.
This point was rebutted by Premier Smith who stated that the guarantee is no millstone: “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.”
Similarly the BVI Leader explained that the Territory will not bite off more than it can chew and will therefore only borrow what is needed: “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,” the Premier stressed.
The Premier further pointed out that the Agency is being established according to international best practice. He pointed out that it is the House of Assembly which will be responsible for bringing this Agency into effect by statute and will also be responsible for approving projects to be carried out by the Agency. Additionally the Premier said that once the work of the Agency is completed it will be disbanded.
The Premier also mentioned that there is also a specific manner in which the funds for the recovery process will be disbursed.