Governor Augustus Jaspert has debunked claims by Premier Andrew Fahie that the United Kingdom wants the Recovery and Development Agency (RDA) to have virtually full control of the territory’s finances in exchange for the UK to fulfil its offer of granting the BVI a recovery loan guarantee of up to £300 million.
“The UK Government has no intention that control of the management of public finances be transferred to the RDA,” Governor Jaspert said in a reactive statement late Monday, August 19.
“Both (UK and BVI) were clear that the government of the Virgin Islands retains management of the territory’s finances and the policy direction of government as per the Virgin Islands’ Constitution. There is no change to this,” he added.
Governor Jaspert noted that that the RDA is an agency of the Government of the Virgin Islands that was established by local legislation (the Recovery and Development Agency Act of 2018) for a precise purpose.
He further made it clear that the UK’s conditions do not mandate that government’s fiscal management (revenue or surplus) or monies received from insurance settlements be deposited to the RDA.
“Government fiscal management and proceeds from insurance and other government revenue are for the government of the Virgin Islands to decide how best to spend. The UK has only specified that investments and contributions (borrowing and donations) for recovery are financially managed by the RDA. This is clearly reflected in the Recovery and Development Agency Act, 2018,” he insisted.
Other conditions are necessary
In the meantime, the Governor said any other conditions set out by the United Kingdom for it to become the territory’s guarantor is necessary.
“The UK Government set conditions around such support to ensure that all recovery measures are accountable and represent value for money and that the additional borrowing is sustainable. The conditions are linked to international financial best practice. By adhering to them, the government will simply be ensuring financing to the RDA is well managed,” he stated.
“Similarly, any banks offering loans will want to set conditions on their use and repayment. This is good financial practice, ultimately ensuring value for money, accountability and transparency for the people of the Virgin Islands,” the governor reasoned.
UK guarantee is a win for the BVI
He also said both the UK and local government had already acknowledged that any new borrowing could cause the central government to remain temporarily out of compliance with the existing borrowing ratios under the Protocols for Effective Financial Management.
He further said it was already been made clear that there are already arrangements facilitate this temporary breach and to get government back into compliance.
“As the two year anniversary of Hurricane Irma approaches, whether the Government of the Virgin Islands decides to take, or not, the offer of a loan guarantee, I am pleased that the Premier is prioritizing the resolution of this issue.”
The has been much public chatter since the Premier’s statement that the UK was fishing to give the RDA control of the public’s purse.
Public meetings on the issue will begin on Tuesday (today) at 7 pm at the Paraquita Bay-based H Lavity Stoutt Community College.
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