While persons here in the BVI have been focused on ensuring that the corona virus (COVID-19) which has been devastating the Chinese economy does not come to the BVI shores, CEO of BVI Finance Limited Elise Donavan is warning that the Territory’s economy might catch the effects of the virus since the BVI’s bread and butter industry financial services is heavily attached to China. Donovan made the stark disclosure on 18 February during her appearance on the talk show Honestly Speaking With Claude Skelton-Cline.
According to the CEO of BVI Finance the sting from the COVID-19 nipping at the Chinese economy might reverberate here in the BVI and she noted that it is something that BVI Finance is aware of.
In noting the seriousness of the matter Donovan explained, “We have to know which side our bread is buttered as far as China is concerned. Now 60 percent…65 percent of government revenues comes from our financial services industry – 35 percent of BVI’s financial services business actually originate from China. That includes Hong Kong…equates to about 20 cents out of every dollar that goes into our revenue comes from China.”
“Whatever happens in China is going to affect our bottom line, so people may not realize that this corona virus is going to have a massive impact on the BVI so we can’t sugarcoat it. We can’t say it any other way, we will just have to ride out this storm – ride out this challenge,” she pointed out.
The Territory’s financial services sector has been dodging and weathering various storms and obstacles thrown in its path over the last twenty years, and Donovan announced that the corona virus is another unfortunate stumbling block for the bruised industry.
“A lot the things that have happened are macro-economic challenges over the last couple of years that have impacted the global financial services industry as well as the economic substance; and the uncertainty surrounding what was happening with the economic substance also created a decline in the industry and now you have compounded that with the corona virus in China which is our largest market,” the BVI Finance CEO explained.
In emphasizing how dependent on China the BVI financial sector is Donovan said, “We are so interconnected – our economy is so interconnected with the China market that it is going to have a profound impact on the BVI and I am not trying to scare anybody but it is something we have to be realistically aware of and see how we are going to look to put other measures in place.”
Meanwhile, she announced that with all that has been happening BVI Finance is proactively refocusing its services. In this stead she said that Africa is looking lucrative. “We have started looking at alternative markets in Africa. We have begun focusing on Africa. Africa has the fastest growth. These are markets where BVI has an expertise, we specialize in the facilities that allow global trade and finance to take place. We provide the structure that helps to facilitate the wheels of global trade to take place.”
Additionally, Donovan said that BVI Finance is still looking at the other markets as they make entrance in Latin America. “We are still looking at Latin America, and we have a number of events planned in Latin America and we are still looking at the Middle East. While we are going through the bumps with our primary market in Asia and China we are still trying to look elsewhere to see where business can originate.”
On the other hand, Executive Director of International Business, Lisa Penn Lettsome explained that the $30Million falloff that was witnessed from the financial services sector was inevitable.
“I want to address the point that we have lost $30M whether it was intended or not the implication that all of a sudden we are losing money because of one reason or the other – the one reason or the other in this conversation always excludes to my amazement the simple mathematical reality. We have been climbing in figures from 1988 – there’s only so many users in the world for corporate structures and so there had come a time where these numbers would plateau and when we say things like we are now losing money and equating that with some loss of service or us not being necessarily ingenious or proactive we need to also factor in and not overlook that simple mathematical reality – the figures had to plateau. What BVI needed to do was perhaps diversify earlier rather than later. It is something that we have to accept – we probably started looking at diversification (for) much too long,” Penn-Lettsome explained.