Gov’t made embarrassing gamble by declining UK’s loan guarantee

Opposition Member, Julian Fraser, said the Virgin Islands Party (VIP) government made a gamble in refusing a loan guarantee offer of $426M from the United Kingdom (UK) when it entered office just over a year after hurricanes Irma and Maria.

According to the Third District Representative, the decision to forego the offer from the UK government may have backfired given the unanticipated blow taken by the BVI’s economy in the wake of COVID-19.

“The government, when they came into office, they rolled the dice and gambled. They could have been lucky but COVID came,” Fraser said at a recent press conference.

The legislator expressed that the administration, led by Premier Andrew Fahie, could have later accepted the UK’s offer and avoided embarrassment, but declined to do so.

“This government thought… they thought a lot of things. At this particular stage, it doesn’t look like they made the right decision,” Fraser stated. “I think that they could have backpedaled and not be embarrassed, because no one anticipated COVID.”

Fraser said if the government had indicated that they belatedly accepted the UK’s loan offer because of the COVID-19 pandemic, he would have been willing to accept this.

“No one knew what could have happened. They probably could have generated the kind of revenue that was needed in order to rebuild the country,” Fraser shared, “but they’re not going to do it. It’s not going to happen.”

Governments run on debt

The veteran legislator argued strenuously that the territory should not be run as if it’s someone’s household.

“You have to wait until you get paid from your job and you go to the bank and get a couple dollars to do something, put in an addition to your home. That’s not the way a country is run, countries are built around debt,” Fraser said.

He continued: “The United States, the great United States [is] built on debt. All these trillions of dollars that the President [Joe Biden] is going to spend on the infrastructure, where do you think he’s getting it from? Well they got a mint, they’re going to print money, but it’s still debt.”

Fraser said the BVI needs to be courageous enough to begin to build debt. “You can’t sit down there holding on to your purse and saying, ‘I’m saving it for a rainy day’. It doesn’t work that way.”