BVI at odds with UK over financial assistance

The British Virgin Islands (BVI) government Wednesday said it is preparing to hold talks with the Treasury and other departments of the United Kingdom government, to discuss “what can be described as, one of the most critical issues facing us as residents of this Territory in modern history”.

In an address to the nation, Premier  Andrew A Fahie, said while he has his own vision and philosophy of where the British Overseas Territory (BOT) needs to go and “how we should go about getting there…as in all other things, I am guided by you the people….

“I believe it is imperative that I must place all the relevant information before you so that you are aware of what is taking place and so that when the time comes, you would be able to have your say and make your input based on facts and informed opinions.”

Fahie said that the matter before the BOT is primarily that of accessing loan funding to support the mountain of work that needs to be done to advance the recovery, restoration and development following the natural disasters of 2017.

But he said he issue facing the island “is whether we are prepared to mortgage our birth right in order for the British government to provide the guarantee needed for us to access this critically needed funding”.

Fahie said at present, what the UK government is demanding in order for it to provide its guarantee, is for the Virgin Islands to basically hand over almost full control of the management of the Territory’s finances to the Recovery and Development Agency (RDA), which was set up at the request of London.

He said the limited self-government that the BVI currently enjoys “is the fruit of the labour and struggles of our forefathers who, through sheer grit and determination, forged the society that we see today after the slave masters and European capitalists abandoned these islands, condemning us to be nothing more than a bird sanctuary.

“Our freedom and autonomy were hard-earned, are priceless, and cannot be given up or diluted so easily,” Fahie said, noting that “while it is not unreasonable for the UK government to want some measure of security that we will be responsible and prudent in spending funds accessed through its guarantee, and that we will repay the loans, it is our respectful view that what is being demanded of the people of the Virgin Islands at this time in order to access these funds is far in excess of what is reasonable”.

He said the BVI appreciates that the extreme caution being exercised by London may not be without some justification.

“However, not even the reckless mismanagement of the previous administration can justify the constitutional over-reach that we are being asked to sanction and to accept.”

Fahie recalled that following the passage of Hurricanes Irma and Maria in 2017 the damage and losses to the island were estimated at almost triple the Gross Domestic Product (GDP)  and impacted the livelihood of everyone, severely affected the physical, economic and social infrastructure of the BVI.

He said in response, the Disaster Recovery Coordinating Committee (DRCC) was established by Cabinet in October 2017 with the mandate to coordinate the recovery efforts with the support of the British government.

He said London however made it clear that “it would need to set conditions around such support to ensure that all recovery measures represent value for money and that the additional borrowing is sustainable for the BVI.

“This is absolutely reasonable. As a precondition to the UK’s support for guaranteeing up to £300 million of loans, it was recommended that a Partnership Agreement between the UK and BVI governments be developed to establish the necessary structure that will drive recovery and thereby attract private investments.”

He said that the high level framework for UK support was centered on the five principles of Good Governance, Fiscal Sustainability, Building in Resilience, Public Administration Reform and UK-BVI Partnership.

But Fahie has said the debate on whether or not London should be offering grants as opposed to the offer of guarantees for BVI loans “is indeed a moot point in this discourse.

“Conditions are typical and fundamental for each and every loan agreement between lender and borrower. Additionally, the BVI government is required to request the approval of the United Kingdom to secure all loans to the Government by third parties, since such loans are recognised as contingent liabilities on the records of the United Kingdom Government’s financial records,” he added.

Fahie outlined a number of concerns regarding the projects being undertaken adding “in spite of numerous requests and public outcry, the relevant authorities and those with Constitutional responsibilities have failed to commence and/or conclude the inquiries into each of the occurrences outlined above.

“All appeals to the UK-appointed officials for these matters to be probed have seemingly fallen on deaf ears over the past several months.

“May I say that it is unfair and unjust for the UK government to seek to penalise the people of the Virgin Islands and this new government on the basis of the actions of a past government – an administration that the people have rejected and voted out of office – without the UK government and its representatives having exercised their roles in getting those matters investigated and properly ventilated”.

Fahie said that “investigation and ventilation of these suspicious and scandalous matters would have allowed all concerned parties to uncover whether any misconduct occurred and to hold persons accountable”.

He said this is essential for restoring faith in government and the governance process.

“Additionally, and most importantly, it would have allowed for the discovery of weaknesses in the system that facilitated the leakage of taxpayers’ money and which are at risk of being exploited in the future, so that those deficiencies can be strengthened to increase effectiveness in the future.

“There is a widespread perception that this failure by the UK officials to act swiftly and to have these matters probed was deliberate and designed to hold the door open for the UK government to impose certain conditions contained in the High Level Framework for UK Support to BVI Hurricane Recovery.”

Fahie warned that “this kind of suspicion is not healthy for BVI-UK relations, but perceptions cannot be tamed only by will and wish”.

He said among the concerns of his government is the distinction about what funds should be automatically placed in the Virgin Islands Recovery Trust Fund, and which should not, needs to be clarified.

“We believe that it is only those funds that are obtained by application of the UK Government’s guarantee and certain other funds received on trust for hurricane relief and recovery – such as UK funding assistance and project specific donor funding – should be placed in the Virgin Islands Recovery Trust Fund and managed by the Trust Manager.”

He said all insurance settlements and loan moneys that do not concern the UK Government’s guarantee or donations “must be deposited into the Consolidated Fund” which “can then be disbursed by the Finance Minister to the Virgin Islands Recovery Trust for the funding of projects approved in the original or revised Recovery plan(s) as necessary”.

In his lengthy address, Fahie likened the situation to Britain’s negotiations to leave the European Union, saying “in the language of Brexit, this will be a case of deal or no deal.

“It will be a deal breaker because there are some things that are too precious to the Virgin Islander to put a price tag on,” he said, insisting that the “contentious conditions that I have mentioned will bind us as a Territory in a straight-jacket.

“We must also weigh getting major loans at a time when it has been forecasted that our revenue from the Financial Services will be effected by the many international attacks for the next few years to come. Thus, we must be confident in our ability to meet our obligations and not to find ourselves being penalised for default,” he said, promising that a series of public meetings is being planned to discuss this matter with the national population.