Government believes there are a number of ‘loan guarantee’ conditions which exists between the UK and the BVI that are cause for concern and need to be urgently renegotiated.
Premier Andrew Fahie said in a recent public statement that a specified number of conditions within the ‘High-Level Framework for UK Support to BVI Hurricane Recovery’ and the ‘Protocols for Effective Financial Management’ agreements must be renegotiated in the interest of residents as well as the Virgin Islands Constitution.
“Government of the Virgin Islands is concerned that the distinction about what funds should be automatically placed in the Virgin Islands Recovery Trust Fund, and which should not, needs to be clarified,” the Premier stated.
“Section 15(c) of the Virgin Islands Recovery and Development Agency Act, No 1 of 2018, as currently worded, is being interpreted to mean that all moneis received by government for Recovery and Development, whether or not the projects have been referred to the RDA, shall be deposited to the Virgin Islands Recovery Trust and accessed only by the Trust manager.”
Funds from insurance should solely be in govt’s control
Premier Fahie, who is also the Minister of Finance, said he believes only funds which are obtained through the application of the UK government’s guarantee and other funds received for hurricane relief and recovery should be deposited in the Virgin Islands Recovery Trust.
He said his government also believes funds derived from insurance settlements and loans which were not apart of the UK government’s guarantee should be deposited into the Consolidated Fund.
By doing the latter, the Minister responsible for Finance can then disburse the monies to the Virgin Islands Recovery Trust to fund projects approved in the recovery plan, Fahie reasoned.
The Premier also described Section 15 (c) of the RDA’s Act of 2018 as being unconstitutional and therefore needs to be amended.
“It seems to conflict with the provisions of Section 102 of the Virgin Islands Constitution Order (2007),” he argued.
Protocol for Effective Financial Management
Premier Fahie also called for the need to have certain conditions or ratios of the Protocol for Effective Financial Management agreement which was done in 2012 to be revised or suspended.
According to the Premier, the ratios which consist of variables such as net debt, debt service, liquid assets, recurrent revenue and recurrent expenditure, includes ratio limits that were designed for the economic environment before hurricanes Irma and Maria.
Declining revenue, a weakened economy
Due to the territory now being in a rebuilding stage, the Premier said a number of factors now exists which include declining revenue, a weakened earning capacity, increase in expenditure for rent and repairs of infrastructure and the unavoidable accessing of loans, which have all changed the economic dynamics of the BVI.
He, therefore, said, “the BVI would unavoidably exceed the currently stipulated ratios and be held in breach of the protocol once any significant loans are accessed.”
“On this basis, your government will be asking the UK Government to review its position on these ratios as a condition for accessing the loan guarantee once this option is exercised. It is our view that these ratios should be suspended for the duration of the guarantee or adjusted to more practical levels,” Premier Fahie stated.
“It may also be necessary to explore new options, and therefore we will have to discuss with the UK Government whether they would be amenable to considering any alternative proposals which may be more suitable to the interests of the people of the Virgin Islands.”
Copyright 2021 BVI News, Media Expressions Limited. All Rights Reserved. This material may not be published, broadcast, rewritten or distributed.