No more debate, no reconsidering; we need to borrow
“We cannot continue to look like a third-world, bombed out shell of who we were prior to September 6, 2017.” — Premier
Amid calls for a referendum or even reconsideration on how government plans to finance the territory’s recovery and development, Premier Dr D Orlando Smith has made a firm decision on the matter.
The Premier said he will not change his mind about accepting the £300 million (approximately US$400 million) loan nor the accompanying conditions from the United Kingdom (UK) government.
He said the debate on the subject has gone on for too long.
“I feel at times that we have lost sight of the prize. It is now time to act! We cannot continue to look like a third-world, bombed out shell of who we were prior to September 6, 2017.”
“The reality is that we need to get our people back to work in a comfortable and productive environment. The reality is that our residents need comfortable houses to live in, good roads to drive on, and a reliable electricity supply.”
“We need all these amenities to continue attracting visitors to our beautiful shores. These amenities require money – money that is available to us in the form of both loans and grants. Without investing in these amenities business will not only stagnate, but business will move elsewhere,” a frank Premier said during a public address Monday evening.
Pressure
The Premier Smith administration has been facing increasing pressure from the parliamentary Opposition and other residents to back out of its loan agreement with the UK.
According to Opposition member Julian Fraser, government is ‘mortgaging local children’s future’ by borrowing to rebuild the territory.
The Opposition member is publicly advocating against government’s financing strategy. Apparently, so is a group of anonymous residents who recently mounted a controversial billboard in Road Town; opposing the strategy.
We are not damning our people
But, Premier Smith said the territory is in no way damned if government accepts the UK’s offer and borrows.
“We must not for a moment see this as a yoke around our necks because the UK will provide a guarantee for our borrowing so that we will be able to borrow on much more favourable terms. For instance, we can borrow at an interest rate of just under one percent compared to 3.5 percent that we would have to pay without the UK guarantee,” Dr Smith said.
“Whether we borrow $100 million per annum or less will be determined by our ability to effectively spend that money, or invest that money, in our future.”
He continued: “The US$400 million dollars that the UK has agreed to guarantee is a maximum figure. We might find ourselves requiring less and indeed with your help in identifying priority projects we are still working out what that figure will be annually. The bottom line is that as a territory we are in a position to access the monies needed to rebuild.”
CLICK HERE for the Premier’s full statement.
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OK Smith..stand up and lead…finally
The reasons why the BVI is experiencing so much hardship from the UK is because no one trust the NDP with money.
a lie. presently, ndp is the only party to lead us and dr. smith is the best . does he look too gentle?only appears so. this statement is decisive. those harping against it aer just that ” harpers” can do nothing better for the country
What hardships are we receiving from the UK?
Please specify.
He is leading,he and the ndp are leading us all over a cliff
“The prize?” A loan is hardly a prize unless you intend to personally profit from it. The loan should be taken with absolute certainty that it can be repaid without burdening our future generations. If the current ministers view this money as their personal prize or piggy bank, we be sunk.
A glass of water is a prize to a man in the desert.
BVI badly needs capital to rebuild. In case you haven’t noticed, people aren’t exactly queueing up to lend us money given the state of our finances.
So yes, a large loan at a very cheap rate of interest is definitely a “prize” from where I am standing.
EXACTLY!!!! Sometimes I wonder if we really that stupid around here. We sit here acting as though there are so many options on the table for the rebuild. Not one person against the borrowing has put forward an alternative to rebuilding. Everyone agrees we need hundreds of millions of dollars NOW to get the BVI back or else we will lose what we have forever but saying we don’t want to borrow. The choices are borrow from institutions under the UK requirements or have a big wig investor pump millions in and get what he/she/they want in return. Pick your poison and hush.
@ Albion.
I totally agree with your statement. No one ever talk on what we should do ,but what we should not do. And that`s all that we get TALK. Time for us to make a move.
Agreed with you Albion. Those who oppose need to say where they will get the the money from.
The man in the desert finds a glass of water a “relief.” We should view the loan as a relief not as something we have won in a competition. It’s not a pirate’s prize. The utmost responsibility and care should be applied to using these funds.
Remember all, this is not a prize nor a gift but a future obligation.
Only a gimmee welfare mentality would view a loan (1% interest guaranteed by the lender) as an act of brutality.
Personally, I see it as a testament of confidence in the current Government. The right Premier at the right time in this our worse hour of need is how I see this and I am saying that the VI is and continues to be blessed. Wendy is filled with gratitude.
As opposed to being obligated owned and tied as a result of welfare funding, heads should he held high, pride lifted and BVIslanders forging ahead as has been their custom because they are people well known to self sufficiency.
Let’s be honest. The ministers don’t have any experience in managing a project like this. In the past several years they have mysteriously thrown away $7M on BVI Airways without publically disclosing the terms and they overspent 100% on the pier project again without full public disclosure.
We all agree the funding is needed to rebuild our roads and schools, but the ministers are talking about spending $200M to extend the runway and other white elephant projects. Ideally, we would have a recovery plan that everyone could participate in designing and vote on and then we could hire a world class consulting company to administer it.
Imagine if we could redesign our infrastructure with high speed Internet and alternative energy products. Imagine if our schools could be purposefully rebuilt to encourage a great education experience. Imagine if our roads could be purposefully rebuilt with underground utilities. Imagine if homeowners were given incentives to rebuild in more sustainable ways.
Hot deal! I wish I could gt $300 mil at 1%
If the Premier looked around prior to Irma he would have noticed the country was already a third world place with crappy roads and infrastructure !
Exactly!!!!!! Wrong person to manage the affairs.
I was thinking the same thing. We looked third world before Irma. Irma just made the third world look of the BVI bombed out.
If the government was transparent we would not have all these restrictions on us for the disbursement of funds.
C———-n and c——–m and n——-sm is coming home to roost
The BVI had money. Plenty USD. But development, growth ? : absolutely not!!
He’s out! Thank God it is not 3 more years to deal with him!!! I got enough time to practice scribbling my X.
FINALLLLY the Premier being a leader. This is what the Territory needs. Everyone wants to be against but what are the alternatives?
Good try but we all know better. This is the ——– leadership this country has ever seen.
“Ispend effectively, invest for the future” thatbis what youbwere supposed to be doing from the get go.
All this non sense about the economy being so robust. Now that you dare not utter thise words you want to put a death hold on the country.
History has shown borrowing from other countries actually leading to the detriment of said country. Having rules and restrictions set to the point where you cant even scratch your a$$ without their say so.
Next thing you’ll be tooting is “ the economy is out of our control now, bow down to massa and beg for more”
Please, those who oppose taking this deal and oppose the new Recovery board, you need to outline your alternatives.
Just telling us, ‘No’ is not enough.
The BVI urgently needs to get rebuilt and if we do not accept this loan guarantee and the transparent disbursement of funds, what would you propose instead?
Fewer, more expensive loans?
No rebuilding?
No transparency, again, like always?
No UK people, just locals deciding on projects and allocating funds?
Tell us. Don’t just stick up a billboard with the word ‘No’!
Then the people can decide.
Well how about each of the 20 or so rich BVI families donated $10 million each. Starting with the government ministers.
Though apart from a couple of notable exceptions they have not donated $10 so far.
You are smoking crack. (1) Which families in BVI are so rich that they can “donate” $10 million? That is a huge sum of money for an individual.
Name just one, never mind twenty of them. (2) Even if you were speaking the truth (you’re note), that still only comes to $200 million – a long way short of the sort of money we need.
Then those 20 or so $10 million dollar donors would have and expect, entitlements .
Nothing is free.
Well Duuurgh.
It has been third world living for a long time. Just 1st world expensive.
I am starting to wonder if the only two people who are opposed to this loan are Mr Fahie and Mr deCastro.
BVI needs to rebuild. It needs money to rebuild. People are willing to lend us money to rebuild. But these two object to us borrowing the money because … the UK demands transparency and oversight to prevent the risk of corrupt politicians squandering the money on political cronies?
What kind of sense does that make? Isn’t the VIP the party who is always arguing for ‘Government in the sunshine’? Maybe the think they will soon be in Government, so now they are less enthusiastic about checks and balances on Government spending.
Nah, I think there is also the self-appointed spokeswoman for the people and the chap who does the tv show in immigration.
It makes sense to them because they are vying for Premiership next election and having restrictions on this loan would not serve their intent.
What they are doing is revealing their ——— hearts to the local community and to the UK. I doubt that the UK would have brokered a deal with them had they been in power. …..
Their c——— has come home to roost.
The premier seems to be a ———. He must remember he is there to serve the people and he must listen to them. Do not behave like the dog with the bone that went after its shadow and lost all. What will BVI pay back that loan from? Is he willing to contribute some of his personal funds towards helping with repayment? Time to stop trying to —- indigenous Virginislanders. The country is devastated. People are struggling to rebuild their houses, farmers and fishermen have lost their livelihood. The two industries are under government control. Where will the ordinary man get money? Tap some investors for help. They benefit all the time.
You need some help. The loans will be guaranteed by the UK. This means if we cannot repay the loans. The Uk will pay it for us. THE Of course there will be guild lines like any other business venture. There must be check and balances. It is simple as that. Any investor will have stipulations as well. When we get the loans then we will be able to rebuild the industries and and launch other initiatives. THE PREMIER IS RIGHT. we need the loans so the country can get up as quick as possible. Unfortunately there are a few persons who are making a lot of noise and are not saying where they will get the money rebuild. It is obvious that they don’t know a darn thing about business. What is their alternative action? They are misleading people. A set of con-artists trying to mashup our country. God is with us and we shall overcome by the Grace of God.
“Tap some investors”? Show me the investor who is going to put money in for a return of less than 1%. Investors typically want a return of above 12% – you would drive us into bankruptcy so fast?
6 months have gone by…..some questions..
The BVI it was said before Irma, “had a plan.”
How much money is on hand?
How much has been receives?
When does work actually begin?
If Hon. Omar W. Hodge hadn’t sadly passed away, would there have been any work on the HOA which is still incomplete?
What’s taking so long to get going?
With less than 3 months before the 2018 Hurricane opens, will shelters be properly reinforced and equipped for any eventualities?
There’s more, but we need to start seeing THINGS HAPPENING!! Too much talking and no action!!
State your case Premier! Great reply to those responsible for that billboard. Seems like we have the BVI equivalent of the Russian interference. We need to find out who is responsible as their actions….pure propaganda. Who would want to mess with the stability of the country at this difficult time? Politics I tell you!!!
The government gets most of its money from the companies that operate here. The vast majority of its money. If there are no roads, water , telecoms, security, docks for boats, ferry terminals to bring in tourists etc, those companies will move elsewhere or close down and the govt will have next to no revenue. Unemployment will follow and the government will have no money to pay the unemployed or the current army of civil servants who will themselves become unemployed. The country will descend into extreme poverty.
What do you not understand about this?
What is your alternative plan?
Tge UK is not giving us any loans so why is everyone thinking this?
I think we all realised this just after Irma so why is it taking you so long to realise this basic thing? And your “No Direction Party” continues to live up to its name by failing after over 6 months to secure important funding for infrastructure, schools, ferry terminals etc – an absolute disgrace – you really need to step aside asap and before the next election please…. My patience in you and your ministers has worn v thin…Stop supporting race courses, runway extensions, marijuana farms, cultural villages and get down to the important stuff which you clearly have failed to address….
It is amazing to me that the CDB loan got support even though it had similar conditions. Now they are on a mission to distract the people with fake concerns…please!
Let’s not take the loan, just continue to operate in a dramatically slowed economy, let’s continue to pretend that all is well, let’s continue to ignore opportunities and let’s just go ahead and insult the UK as this is in our best interest.
The suggestion to rebuild incrementally is not practical, considering the loan opportunity available to us. In my humble opinion; let us get our territory back to or at an improved state as quickly as possible. This way we speed up our economy and secure the businesses that continue to operate under strenuous condition and create an environment to attract new ones.
The sad reality here as well; most of those who are against this loan are comfortable and don’t need to worry about getting wet if it rains or even if the night dew is a lil heavy.
What are you saying ? Thing aren’t “ROBUST” to use one of your favorite words
Take the grants not the loans. The grants covered the same amounts but they want campaign money so they want a loan instead. B/c with the grants the uk can have a say in who, where & how the contracts are awarded. Which is fine imo b/c it’s a onetime deal. And this could’ve been done immediately but with no audits who could they just expect a fully guaranteed loan for the amounts that we need..
With a potential GDP of $3.5 billion, annual deficits of 90% of GDP are sustainable under present conditions, and allows for annual borrowing of over $3 billion. Money markets globally possess very low rates of interest, so in the present deflationary global economy, there should be no fears of interest rates gobbling up public revenues. There is leeway for the BVI to borrow billions over the next 5 years to stimulate the economy. So go for it Premier, but ensure transparency and accountability in how the loaned cash is managed and utilized. Stimulus is required immediately to prevent a long term contraction of the economy. But even more important adopt a long term strategic economic plan tied to short, medium, and long term borrowing.
Dickson, I think you mean *borrowing* of 90% of GDP are sustainable. A deficit of 90% of GDP (ie. spending over $3 billion a year despite only collection $0.2 billion in revenues) is not sustainable on any economic basis.
I think you also mean *total borrowing* of $3 billion, not annual borrowing. We could never borrow $3 billion a year (because no one would lend it to us), but if we did there is no conceivable way we could ever repay that level of debt.
Accuracy is everything.
Yes, my annual borrowing of 3 b was incorrect- I am human after all – I should have stated 3b over a period of say 1-5 years- that would have been a more realistic borrowing metric
Is the VI recent GDP approx $1B? Is the VI GDP projected to be halved this year? Does it have the capacity and capability for its GDP to balloon to $3.5B in the near term? Should the territory really be running a 90% deficit of GDP annually? Will this action drive up the national debt? Is a high debt to GDP a best management practice? What is a reasonable debt to GDP? 50-60 typically. Are not high debt to GDP ratio major causes of concern for many of our regional sister countries?
Does the BVI need to borrow money to rebuild, to recover? Yes. Should it have the proper structures and framework in place to borrow? Why is the UK putting guard rails on BVI borrowing? Are the guard rails driven by past financial performance? Was the Governor’s Office/FCO/UK nervousness stemmed from lack of transparency, accountability, good governance……..etc cause for the financial guard rails?
If the NDP Government borrow billions of dollars, we are still going to look like a bombed out third world country. They are not going to use the money for the intended purpose. They are going to waste it, and we end up with a big bill and don’t have any thing to show.
The VI is well beyond the discovery and debate phases of the 3D process; it is decide phase time. Hurricanes Irma and Maria battered the VI. They shattered physical infrastructure(roads, electricity, ports, water, sewage) personal/personnel housing, economy, government facilities, public safety facilities, businesses, tourist facilities, reduced employment ……etc.
Further, the estimated recovery cost is $3.6B and government does not have the capital in reserve or the ability in pay as you go revenue to fund the recovery in a timely manner to put the territory on an acclerated growth and development recovery pace. Consequently, it is not if capital needs to be borrowed but how much, payback period, terms and conditions and pay back from what revenue streams.
Moreover, other than borrowing, what other options does the BVI have to fuel the economic recovery? Options include 1)other grants from large developed countries, local/regional grants, Marshall Plan-like bail out programme ……..etc. None of these options are on the horizon to materialize. Borrowing $BB to fund the recovery is a bitter pill to swallow but needed. The way forward will be challenging requiring much territorial sacrifice, pain…..etc.
Further, the VI is a small, resource-poor territory. It lacks oil, diamonds, valuable minerals……..etc to fund its recovery. It lacks the resources to construct either a primary or secondary economy; its economy is service-based, ie, tourism and financial services. Both are fragile. As such, to borrow and fuel the recovery effort, taxes, fees…..etc will have to be increased. Furthermore, if low/no interest money is available from reputable sources, seize the opportunity. Most investors tend not to loan money for 1%. They normally/typically set a minimal hurdle rate of 10-20%.
It has been 6 months since Hurricane Irmaria decimated the BVI. However, though some progress have been made around the margins, the core is still hollow and needs to be filled in. The territory still looks like a bombed out war zone. It needs external investment( foreign direct investment) to fill in the hollow core to recover from the ravaging damages. The external investment will be through either grants or loans. Nonetheless, borrowing seems like the most probable means of funding the recovery.
The UK provided £10M ($13M) in grants and £300M ($403M) in loan guarantees with some strict terms and conditions. The terms and conditions have unleashed a robust and raging debate on accepting the terms and conditions. Some feel that the terms and conditions rekindle the embers of colonialism, imperialism and neocolonialism. However, the realIty is that government made a universal decision to agree to the terms and conditions without the opportunity for a strong debate and approval in the HOA.
Nonetheless, whether it is the UK guaranteed loans or other loans, money still needs to be borrowed to invest on the recovery. The territory’s progress/recovery is being held in the balance. It is time to decide on a course of action in regards to borrowing. Lets get ah dun? Residents need to see and feel some action and energy on the road to recovery.
Let’s lead like eagles, not careen off the cliff like buffaloes.
Well done Premier. Good move. Its about time. I trust you get the support from your colleagues as we the people of the BVI will support you. We need help. We are confident that you will lead is into a better BVI. Respect Sir
Dr.smith is playing righ into there hands. Watch out ndp u cause this to happen. Bvi is sell! Finsh the deal dr. When u come out your head will b shaking.
Since when did the “No Direction Party” NDP ever care about accountability and transparency – until Dr Smith wakes up and starts to do his job properly as Finance Minister the BVI will continue to struggle to get loans with no reasonable conditions attached – good comments above by the way I am relieved that many see through this incompetent government and their attempts to spin things ….
I can’t believe how stupid these comments have become. Other Caribbean destinations have rebuilt with lightening speed and have active tourism gains this season. BVI has….. A bunch of ungrateful locals with bad attitudes and zero alternatives. You can’t be both angry you don’t have a roof, water, or power AND be upset about the only viable solution to get you those things. I fear BVI has lost at least 20 years of tourism and economic progress because people with no idea about natural disasters and recovery think they know what is best. Time to put up or shut up then. Where are your other brilliant opportunities, naysayers? Oh. Right. They blew into the sea with everything else last September. You should be ashamed of yourselves for holding up the recovery. You have only yourself to blame