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UK questions if VI can repay loans

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– Premier Smith was grilled by UK Member of Parliament on how the VI intends to repay the loans it is seeking

 

ROAD TOWN, Tortola, VI – Premier and Minister of Finance, Dr The Honourable D. Orlando Smith (AL), who appeared before the International Development Committee of the House of Commerce in the United Kingdom on Tuesday, October 31, 2017 was grilled by Member of Parliament, Lloyd Russell-Moyle on how the Virgin Islands (VI) intends to repay the loans it is seeking.ROAD TOWN, Tortola, VI – Premier and Minister of Finance, Dr The Honourable D. Orlando Smith (AL), who appeared before the International Development Committee of the House of Commerce in the United Kingdom on Tuesday, October 31, 2017 was grilled by Member of Parliament, Lloyd Russell-Moyle on how the Virgin Islands (VI) intends to repay the loans it is seeking.
ROAD TOWN, Tortola, VI – Premier and Minister of Finance, Dr The Honourable D. Orlando Smith (AL), who appeared before the International Development Committee of the House of Commerce in the United Kingdom on Tuesday, October 31, 2017 was grilled by Member of Parliament, Lloyd Russell-Moyle on how the Virgin Islands (VI) intends to repay the loans it is seeking.ROAD TOWN, Tortola, VI – Premier and Minister of Finance, Dr The Honourable D. Orlando Smith (AL), who appeared before the International Development Committee of the House of Commerce in the United Kingdom on Tuesday, October 31, 2017 was grilled by Member of Parliament, Lloyd Russell-Moyle on how the Virgin Islands (VI) intends to repay the loans it is seeking.ROAD TOWN, Tortola, VI – Premier and Minister of Finance, Dr The Honourable D. Orlando Smith (AL), who appeared before the International Development Committee of the House of Commerce in the United Kingdom on Tuesday, October 31, 2017 was grilled by Member of Parliament, Lloyd Russell-Moyle on how the Virgin Islands (VI) intends to repay the loans it is seeking.ROAD TOWN, Tortola, VI – Premier and Minister of Finance, Dr The Honourable D. Orlando Smith (AL), who appeared before the International Development Committee of the House of Commerce in the United Kingdom on Tuesday, October 31, 2017 was grilled by Member of Parliament, Lloyd Russell-Moyle on how the Virgin Islands (VI) intends to repay the loans it is seeking.
The VI is set to benefit from the recent ruling by the Organisation for Economic Cooperation and Development (OECD) where the UK’s Development Aid can be used for short term assistance for middle income countries.
However, as the territory struggles to get back on its feet with an impact of $3.6 billion in losses following hurricane Irma, the Virgin Islands will need millions to begin rebuilding.
Mr Russell-Moyle explained, “When natural disasters or human disasters hit, we have to step in, just like in 1993, when the City of London was bombed by the IRA; we stepped in. Since then, the City of London has paid, through its tax base, back the UK Exchequer many times.”
He continued, “With BVI there is a lot of discussion about transparency of tax and openness of shell companies. Is that something that needs to be harnessed to make sure that money is used for the right purpose in the long term, so we know it is paid back?”
$60M in Reserve Fund
In response, the Minister of Finance commented that the VI is part of the international monetary system that works very well in terms of cross-border transactions, providing employment all around the world and is absolutely well regulated.
Not very pleased with the response by the Premier, Mr Lloyd Russell-Moyle questioned again, “I am asking more about how you leverage in the future, in the long term—because in the short term we have a duty to support the islands—so that these funds can be put aside for resilience and climate change, and how you are thinking about that. That is what I am trying to explore: the long-term plans for resilience-building.”
Dr Smith emphasised that the VI has already started to look at long term plans for resilience building, while recalling that seven years ago the VI started having reserve funds towards that kind of purpose.
“That is why we have at this moment over $60 million in that reserve fund. The financial service area will contribute to that fund, and we will continue to develop that, because we realise we need that kind of back-up in case of this kind of disaster,” explained the Minister of Finance to the committee.
Long term assistance needed
Meanwhile, the Premier explained to the committee that the territory needs long term assistance although the VI has received aid from the UK and other countries in the initial stage.
“Now we have to look at the long term, and because of the extent of the damage, we are not able to do that within our budget, so we will have to seek assistance in terms of loans and any other forms of financing we can,” the Premier said.
The Member of Parliament pointed out that the VI has a higher Gross Domestic Product (GDP) per capita than Britain, while questioning if the VI is thinking about having reserved funds for climate change and other disasters in the future.
The Premier urged, “Even though we had a relatively high GDP before, right now if we do not get the kind of assistance that is needed to rebuild the economy, we will become a dependency on the United Kingdom, and that is something that we do not want and you do not want.”
Dr Smith disclosed that the territory is not accustomed to being dependent on the UK, adding that they have always been able to take care of the territory’s needs.
The leader of the territory said that the catastrophic hurricane is not something that the territory ever expected, “So we have to deal with it and we need assistance to deal with it.”

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