BVI News

The role of government (governing) anywhere and at any level is inherently challenging and complex; government has the unenviable task of trying to meet the needs and expectations of many diverse interest groups. Though effective governing is vital to the success, growth, and development of any country, it is at best difficult.   But governing is more challenging and difficult in small, island microstates such as the BVI with its small population (~30,000), small economic base, and limited resources.

These conditions present greater challenges or disadvantages for the BVI relative to larger regional or international countries.   Thus, a steady, skilled, proven team is needed to take a bird’s eye view of BVI and its challenges and effect aggressive action to navigate the BVI through them.

Some of the challenges of governing in the BVI due to its small size include (1) high cost of providing public services, (2) small labor pool, (3) segmented labor force, (4) higher import/trading costs, (5) limited domestic competition, (6) limited incentives to attract external investment, and (7) small market/economic base. These myriad of challenges demand effective governing to transform   expectations and demands into positive outcomes.

What is the role of the BVI government?  The traditional role of government was to serve, protect and provide some basic infrastructural and social services.  And up to the early 1960’s, government provided limited services; Virgin Islanders were more rugged, independent and depended less on government.  But, currently, commensurate with the level of growth and development the role of government has changed and expanded.

Now, Virgin Islanders expect and demand that government provide a variety of services equivalent to what is delivered in many modern societies:  education, health services, fire services, police, transportation (road, airport, seaport, bridges), potable water, sewerage, telecommunication, electricity, direct and indirect employment, social services…etc.   Further, the types and level of service provided is a function of what the majority of citizens desire and are willing to pay for. Some of the services demanded are based on political patronage.

And as it has in some other regional countries, political patronage has permeated the BVI society.  Many citizens expect and demand that political leaders provide a host of services some of which are beyond the traditional, inherently governmental basic services.  Though political patronage is an integral part of local/retail politics, it has a downside; it causes conflict among Virgin Islanders. It is an accepted part of local politics; therefore, the challenge for government is leveling the playing field so that all citizens have relative equal access to services.

Typically, in many larger countries government’s role in providing some of these services involves establishing the framework and policies for the private sector to efficiently and effectively deliver these services. For example, in larger countries, the private sector is often the major employer, not the government.  Nonetheless, the BVI government by necessity (limited private sector opportunities) is a lead employer. Moreover, due to BVI’s small size and economic base, many beneficial services would not be available if they were not provided by the government.  These services are neither practical nor cost effective for individuals to provide and not profitable enough to interest the private sector.

Undoubtedly, government is a key player in providing many public services. But due to its small size, population, and economy the cost of providing these services is much higher than in larger countries.  For example, the per capita cost of delivering services (infrastructure, health services, education…..etc) is much higher than in larger countries, for the lack of economies of scale and scope.  Further, due to the higher costs, the quality of public services may not always be top quality.  Additionally, the BVI importation of most goods, coupled with its distance from major markets, also increased the cost of providing public service.  The challenge is to lower the cost of service.

Another challenge for the BVI is meeting labor demands from its small labor pool.  The growth of tourism and financial services, the twin pillars of the economy, has increased the demand for both skilled and non-skilled labor. But the demand, particular skilled labor, is beyond the capacity of the local labor force; labor shortage required importation of labor. Further, the need to import labor has segmented the labor force between locals and expatriates.  Most locals are concentrated in government, or statutory bodies.   But expatriates occupy technical positions, senior management positions in banks, hotels, and financial services industry; construction workers, and tradesmen. Expatriates occupy many positions   atop and   at the bottom end of labor scale.  This segmenting of the labor force causes the some friction between both groups.

Expatriates are often blamed for this friction. But in fairness expatriates, for the most part, occupy jobs that (1) either there are not enough qualified Virgin Islanders to fill or (2) jobs that they do not want. Lack of effective long-term planning is one reason for the labor shortfall.  But to correct this glaring disparity in the workforce, the BVI needs to institute an aggressive, focused, and phased education and training plan that (1) meet its employment needs, (2) reduce the shortage of skilled workers, and (3) prepare Virgin Islanders to occupy most positions.

An additional challenge for any government is the size of the public sector workforce. Though it is a political hot potato and the elephant in the room that no one wants to talk about, it is an issue that needs to be reviewed.  As a minimum, a review is needed to (1) determine how many years of effort is needed to deliver  best value public sector services at  the least cost, and (2) for resource leveling, moving personnel from overstaffed areas to understaffed areas. This is a highly sensitive area and will take political courage and will to address.  But it is better to attack the issue locally rather than it being done eternally by bureaucrats who are not familiar with local needs and preferences.  A review does not necessarily mean that anyone has to leave the public sector; improvements may be just some resource leveling or structural adjustments or administrative changes.

Finally, one of the biggest challenges for the BVI is continued growth, development, and expansion of its small economic base. Currently, financial services and tourism are the twin pillars of the economy. They have provided the BVI with a high quality of life and one of the highest standard of living in the region. But the BIG question is how long can these industries sustain this status? Nonetheless, the challenge for the BVI is to maintain and sustain the twin pillars, and diversify its economy to maintain/improve the quality of life and standard of living for Virgin Islanders at all income levels—-high end, middle class, lower end—well into the 21^st Century.

The VI is a small, island microstate. And as such there are many governing challenges, including higher cost in delivering public services, due to its small size, population, and economy.  These challenges cannot be viewed as either weaknesses or threats but opportunities to build the economy on.  Government is heavily involved in the economy at significant cost. The question is can it sustain and afford this level of involvement?

Consequently, in a few weeks Virgin Islanders will be strolling to the polls to elect a new government. And this new government must take action(s) to bend the cost curve without affecting the level of service provided, look at shifting some of the services provided to the private sector through partnerships or subsidies, and sustain/diversify the economy to maintain the standard of living and quality of life that Virgin Islanders have grown accustomed to.

Edgar Leonard is a native Virgin Islander currently residing abroad.

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