By Davion Smith, BVI News Online Staff
While assessing Donald Trump’s presidency of the United States, a university professor urged the British Virgin Islands (BVI) not to panic although it may face frightening repercussions, including possible blows to its main economic pillar – financial services, as well as other industries such as fishing and agriculture.
United States-based political scientist, Professor Max Hilaire, said his assessment is based on the president’s politics and policies.
“If the rhetoric coming from Trump is any indication of what he intends to do, we can expect a very rough four years for the Caribbean on a whole and the BVI to some extent,” the professor declared during a lecture at the H Lavity Stout Community College last evening, April 27.
The financial services sector
President Trump so far has indicated an overall disinterest in globalisation partly through his promises to pull out of international trade deals such as the Trans-Pacific Partnership, and the North America Free Trade Agreement.
While noting that the financial sector is a benefactor of globalisation, Professor Hilaire stated that President Trump’s “anti-globalisation” stance may impact service and financial sectors in the Caribbean.
“Globalisation has helped lift some Caribbean countries out of poverty – namely the BVI and other British Overseas Territories,” he said.
The Morgan University professor went on to state that “Trump has threatened to punish companies that shift their operations abroad”.
He added, “This sentiment may ultimately be used against Americans who have used the financial sectors in the Caribbean and elsewhere to shelter their assets from the reach of US jurisdiction.”
Professor Hilaire also noted President Trump’s proposed tax reform plan, which will effectively grant major tax cuts to US businesses and citizens.
“The [new] US tax code will also have a major impact on the Caribbean and in particular the BVI, the Cayman Islands, and other offshore financial sectors in the Caribbean. A reduction in US tax rate, which Mr Trump has called for – which will be 15 percent, encourages American citizens to repatriate their overseas assets back to the US. It will eliminate the incentive for corporations to keep their overseas profits or to put it in tax havens elsewhere.”
Professor Hilaire continued: “Foreigners with assets in the BVI, the Cayman Islands and elsewhere will no longer be able to conceal their assets because that information legally will be required to be available to other signatories to that [Common Reporting Standards] agreement.”
Elaborating on the Common Reporting Standards (CRS) agreement, the professor reasoned: “The CRS – which requires all signatories to share tax information with each other about holdings by foreign nationals in their jurisdictions – will significantly undermine the offshore financial sectors in the Caribbean.”
US pull-out may hurt fishing
Meanwhile, Professor Hilaire said another of the US president’s whims that may not spell well for Caribbean countries such as the BVI is the likely pull-out from the Paris Climate Agreement.
Effectively, that agreement, which was spearheaded by the United Nations, is aimed at combating climate change and global warming.
“Trump’s rejection of scientific evidence linking carbon dioxide to climate change will force the US not to comply with the Paris Climate Agreement which was signed just about a year ago. It would be detrimental to the Caribbean as a whole,” Professor Hilaire argued.
“Climate change may also impact the fishing and agricultural industries in the Caribbean and lead to greater dependency on imports of food from Europe and the US,” he added.
“Global warming is leading to an increase in sea temperature, which is causing stronger hurricanes in the Caribbean. Global warming is also causing a rise in sea level, which ultimately will lead to the disappearance of some of our islands – and is very destructive of the coral reefs. A drastic change in the earth’s temperature is likely to undermine the marine environment in the Caribbean and impact the tourism sector negatively.”
No need to panic
Professor Hilaire, in the meantime, said “there is no need to panic” although the effects of President Trump’s proposals may be frightening.
He added that it is yet to be seen if the president’s proposals will be set in stone.
President Trump will tomorrow (April 29) officially be in office for 100 days.
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