Private enterprise: the driver of Virgin Islands development
Dickson Igwe - Saturday, June 23rd, 2012 at 9:43 AM
Dickson Igwe
One thing is clearly evident in the ongoing national development discussion and debate in the British Virgin Islands. And that is this! Any move towards establishing an effective, efficient, and profitable national enterprise model and culture for the country, must include the private sector as the most crucial component.
Although one must never generalize, the fact is that West Indians possess a culture of dependency on Government. This is a Caribbean idiosyncrasy that evolved from slavery. The mindset of many of the freed slaves in the 1800s was not replaced by a new pattern of thinking.
Instead, the plantation as source of subsistence was transferred first to colonial governments; and then national governments after independence. Post 1950s Caribbean governments became de facto, the new ‘plantation owners,’ and providers of ‘the daily bread.’
However, this dependency on the public sector overburdened local economies and hampered national development for decades after slavery ended; and thereafter the fight for independence and nationhood. And this dependency on the public sector still persists.
Consequently, the promotion of a truly free and independent, dynamic private enterprise culture in West Indian society, is the only option for the removal of decades of shackles of underdevelopment and poverty. A dynamic and free enterprise model must become the engine of development and prosperity for Caribbean community, albeit with government as watchful monitor.
Arguably, in the USA, the Black US Citizen also needs to adopt a much more aggressive free enterprise culture if he or she is to catch up with the white majority in terms of wealth and prosperity. Whites in the USA, according to recent figures, are 22 times wealthier than their black brothers and sisters. Despite great political strides, the realization of economic equality in the USA remains a climb to the top of the proverbial mountain for the Black American, who remains deep in the social and economic valley.
One only has to visit neighbouring Charlotte Amalie and see the results of an anemic free enterprise culture on the black population. Whole swathes of USVI commerce, from hotels and leisure, to retail and banking services, are today owned and managed by white, Indian, and Syrian businesses, with blacks acting as indigent consumers, relegated to middle or lower management positions in the private sector, or working mostly in public sector jobs, and driving taxis. An amble down the Main Street of the USVI Capital will reveal that not a single shop is owned or managed by a black US Virgin Islander. This is the bitter truth that cannot be allowed to become a similar reality in the British Virgin Islands!
However, it is also a well know fact that access to loans and credit is limited for black Americans, and many black owned businesses and homes were lost during the financial meltdown of 2007-2009. The Great Recession hit the black and Latino family especially hard.
OK, returning to the British Virgin Islands, and if it is to be the establishment of a national air carrier of international pedigree; a highly functional and attractive air and sea port infrastructure that complements and builds the country’s commerce; expanded ferry services to include new and regular calls to ports in Puerto Rico, St. Martin, and elsewhere. And improving access to and from the United States Virgin Islands in terms of improved port facilities, and round the clock ferry scheduling; then the private sector must be crucial partner.
Whether it is installing the infrastructure for the efficient and abundant supply of fresh water; and establishing a solution for the effective, environmentally friendly, and safe treatment and disposal of raw sewage; or the eventual realization of a robust and well managed hospital facility; a self sufficient, green house driven, and highly productive food and agriculture sector with an internal marketing dynamic; and the transformation of the nation’s hydro carbon based energy architecture, into a clean and renewable energy model; achieving these national aims must include private enterprise as critical partner to Government.
In fact, one school of thought asserts that the less government interferes in anything the better. That body of scholarship further exhorts that Government involvement in the economy is simply to create the conditions necessary for a thriving national commerce. Consequently, the effective politician and national leader, for this citadel of ideas, commonly considered the ‘’Milton Friedman School of Economics,’’ is the man or woman who understands that he or she is in fact the advocate of business, walking the halls of power with the key purpose of facilitating and promoting, a dynamic and thriving national economy, and private sector.
And so to the civil servant and public officer, their job, apart from doing the government’s bidding, and upholding the integrity of the public service, is ensuring the smooth running of the country, primarily in terms of its commercial and economic performance.
Or, using an analogy taken from Holy Scripture, ‘’ seek ye first a buoyant, robust, and prosperous, national economy, and all other things will fall into place.’’
And a thriving national economy brings with it, strong economic growth; profitable and lucrative businesses; personal wealth; good jobs; commercial opportunities; and tax revenues for public investment in education, health, physical development; and so on. A strong economy is a synonym for a bright future!
At the other end of the dialectical spectrum is the John Maynard Keynes School of economic thought, which holds that governments can regulate the business cycle with fiscal policy: in other words, government interference in the economy is a good thing, and required, to ensure strong economic growth.
Both models are useful in that they allow policy makers and leaders establish a suitable modus Vivendi that leads to the realization of the national objective in terms of growth and development. Economic theory provides a mould in which the politician, and policy maker, is able to make and remake a country’s planning, development, and economic and fiscal management. However, which side of the philosophical fence one subscribes, is entirely a matter for debate, and the two schools of thought remain the two most disparate and contentious differentials in global economic thought to date.
A close look at the current USA election campaign will clearly reveal which side of the spectrum each candidate sits: Barack Obama, the Democratic Candidate, is clearly the candidate of the John Maynard Keynes School, that espouses the virtue of government as big brother to business; while his counterpart, the Republican, Mitt Romney, preaches the Milton Friedman narrative of small government and a robust free enterprise model, as panacea for all things bright and beautiful.
However, this Pilgrim subscribes to the view that ultimately, it is the private sector alone, which possesses the creativity, imagination, dynamism, and capability of bringing about transformative change to the country’s economy. Government’s job is to make the country the most attractive jurisdiction in the region and world, to live, work, play, learn, operate a business, and invest.
Still a very weighty task!
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11 Comments
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Capitalism–heralded by the “private sector”–is inherently corrupt, unethical, un-Christian and undemocratic! It inculcates greed and rabid “me-ism.” Read Marx, Engels, Lenin, Guevara and Fidel… and the New Testament:the philosophy of Jesus.
The latter to which Dr.Igwe supposedly subscribes (?).
I totally agree: Capitalism and Christianity, and indeed Capitalism and bourgeois Democracy are oxymoronic.
But, according to the Bible Doctor “nutten wrong wid dat.”
It is a case of “Every man/woman for himself/herself…and God for us all!”
Questions & Answers? Plantations 2012 B.V.I.
How many “white people” in the government? Is the government at the “heart of power” so to speak – the now black overseers or the black “owners”?
How many business owned by black residents? Would they then be “the white overseers”?
What is the actual racial make up of the Islands / B.V.I.
Does the money earned by “white companies” e.g Hotels go out of B.V. I. or stay in to improve the hotel & services and so on? Like on the plantations.
Did the 1800′s etc. Plantations close up in “hurricane season” like now in 2012?
Who looks after the 2012 “plantation workers” when the “hurricane season” closes the hotels / restaurants etc.?
Yes interesting…..many questions can be asked and conparisons made. Perhaps it is all the case anywhere of the “ant colonies” Queen ant, worker ants, etc……..and we can forget plantations altogether
True assessment- the time is ripe in these Virgin Islands to get the plantation out of hearts and minds- however after 200 years- the slave mentality is still a reality- despite economic and social progress
Beware when Government and private sector are one and the same.
Be aware Now
We need a register of the private interests of Government Ministers and their friends and family now for the sake of honesty, democracy, decency and the little people of the BVI.
There will be no responsibility and accountability without transparency and they know that.
For Ministers yes, but their family? Are you out of your mind? You all come from where you come from behaving as if corruption only exists in the BVI. The BVI is far less corrupt that where you people are from so clean your backyard before calling down ours. We are a very small closed knit community so many things may seem untoward but shouldn’t be deemed so at all times.
I agree with the register of interests but some people behave as if because I’m a successful businessman or involved with an investment club, I shouldn’t contest elections if I feel I can make a difference in my country. I say bring the register but leave the people’s families out of this rubbish.
Not sure who believes that because you are involved with an investment club that you should not contest elections to make the BVI better for all.
I for one believe that you should not contest an election to help get contracts for buddies and cronies. A register will help everyone see when that happens here as it has to the detriment of the country for many years.
Transparency, Responsibility and Acountability is the key.
Not as corrupt as people think it is? Really? what is there to show for the $Billion spent by the country over the last 4 years?
Mr. Igwe, once again you have provided a most interesting and thought provoking commentary. Please continue to write and share your ideas. Many of us are taking notice of your contribution. I look forward to reading your next article.
Dickson, another strong, truthful and penetrating article that the whole BVI community should evaulate and take to heart. As noted the BVI government, along with other governments in the region, has become the de facto plantation. Citizens throughout the region depend heavily on government for both direct and indirect employment.
Politicians play a role in enabling this dependency; political patronage is common throughout the region. Further, the region also suffers from the shortcomings of plantation economics. Essays on the Theory of Plantation Economy by Lloyd Best and Kari Polanyi Levitt is a good read on plantation economy.
Though it is true that the private sector is a critical cylinder in driving the BVI’s economic engine, so too is government. There must be positive and effective collaboration and cooperation between the public and private sectors to maintain the economic engine at peak operation efficiency.
The public sector plays a key role in providing nonrival and nonexcludable public goods that the private sector may benefit from but has little incentive to providet yet are needed by the general public. These public goods include roads, police /law enforcement, fire protection, public education……etc.
Government and private sector play different but key roles in driving the economic engine. For example, during an economic downturn as the BVI and rest of the world currently in, the private hold back on investment and it takes public sector investment to sustain and move the economy for private investment.
What is all this talk of plantation economics? Did not our forefathers leave the plantations nearly two hundred years ago?
Since emancipation, we have freed ourselves and achieved a high standard of living and one of the best quality of life in the region. Additionally, we are self supporting; little to no grant-in-aid. Lets look to the future and focus on tourism and financial services and keep the plantation in our rearview mirror.
Plantation economy is not much about plantations. Norman Girvan in the Foreward to Essays on the Theory of Plantation Economy by Lloyd Best and Kari Levitt labeled the term as a means of characterising how typical Caribbean economy works relative to historical origins.
The theory is about permanent dependence—growth without development, adjustment without structural change, diversification without transformation. Basically the region needs to where practical reduce its subordination to and dependency on external sectors. It also needs to shift from passive incorporation to active incorporation into the international economy. The theory of plantation economy stipulates that active incorporation can lead to sustain growth and development.
True, our ancestors were emancipated in 1834. And the BVI, inspite of size, has thus far done reasonably well economically. But it still need to take the proactive actions to minimize its subordination to and dependency on another plantation-like system(s). Examples of such actions include aggressive and effective master planning, robust education and training, effective regional collaboration and cooperation.
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