Exploring the Virgin Island Economy

By :- Janette Brin

Lifestyle & Culture

By Sowande Uhuru

At one point in our recent history, the British Virgin Islands boasted of full employment.  Its relatively small population, combined with the twin pillars of tourism and financial services, created an economy with plenty of opportunities for work and wealth.  Currently, the Virgin Islands economy no longer holds the same promise for those searching for new opportunities.  The current economic model seems to have reached its limit, a reality further compounded by global threats to tourism and financial services.  This spells bad news for the hundreds of students graduating from local secondary schools and tertiary institutions near and far.  There is an increasing list of first time job seekers and even highly educated and skilled individuals who find themselves unemployed, and this troubling trend shows no evidence of reversing anytime soon.  A number of factors have led to this sad reality, but answers to the vexing questions of continued economic development do exist.  Are we brave enough to explore them?

The Public Sector

The Government of the Virgin Islands is the biggest employer in the Virgin Islands; it is also the biggest employer of Virgin Islanders in the Virgin Islands.  As a graduate of secondary school in the Virgin Islands, I recognized that many of my peers found security in the belief that the government could always provide them with employment.  Government would employ Virgin Islanders out of high school immediately; it would employ Virgin Islanders who came home from foreign universities and colleges for the summer; it would employ Virgin Islanders who left the private sector.

This growth in the public sector could not be sustained, however; a rising recurrent expenditure, made largely of salaries and pensions, has brought this unmitigated growth to a halt.  And no one would be surprised to learn that the public sector has not operated at a peak level of efficiency and productivity, begging the question as to whether the public is getting good value in return for the huge public investment in salaries.  The resulting situation is that a government job is much more difficult to come by, reflected in the blank stares of young people congregating the street corners of unemployment.

The Private Sector

For years, politicians, talk show hosts, and other concerned individuals have voiced the need for Virgin Islanders in the private sector to be able to access jobs in mid to upper level management, for it seemed that there was a glass ceiling for locals.  Accounting firms, banks, trust companies, law firms, and other companies that have reaped benefits from this prospering economy have been encouraged to give more opportunities to a greater number of Virgin Islanders, but despite these efforts, it would seem as though Virgin Islanders are lucky to hold on to their jobs in these companies.

Now more than ever, companies seem resistant to the pressures for mid to upper level jobs for Virgin Islanders.  The common argument is that companies want to draw from a much larger pool of talent, education, skills, and experience than the Virgin Islands has to offer.  Also, competition is fierce, and companies, being concerned with their bottom lines, want a smaller payroll.  This has led to downsizing, the shifting of certain jobs to cheaper labour markets, mergers, and other attempts to increase profitability, which, in turn, has led to redundancies and reduced opportunities.  Generally speaking, the government has not condemned such aggressive behavior, agreeing that companies must do what they have to in order to survive.

The economic growth experienced in the Virgin Islands over the last thirty to forty years, spurred by the growth of tourism and financial services, has resulted in a decrease in local tradesmen and an increase in tradesmen from neighboring Caribbean islands.  Unfortunately, the social and education systems have not provided the encouragement or opportunities for locals to become masons, carpenters, electricians, plumbers, and the like.  As a consequence, the young people who are not desirous or well suited for administrative jobs congregate daily in our communities from west to east, pressuring politicians for some form of work.  There has been much talk of properly developing a technical school to better equip young people to capture the jobs that have been filled by migrants in recent history, but the talk has yet to produce a substantial shift in the status quo.

The same can be said of the retail sector.  Migrants have filled most of the positions in this area of the economy, but now, with the scarcity of opportunities in government, banks, accounting firms, and trust companies, young high school and college graduates are looking for opportunities in retail stores.  It would seem as though the mentality that Virgin Islanders can only work “big jobs” is fading, in light of the current grim job prospects.  However, it remains to be seen whether the retail sector will continue to be able to provide employment as it did in the past with the fierce competition from internet shopping, St. Thomas, Puerto Rico, St. Maarten, and Miami.

The survival of local businesses takes on a critical importance when considering the employment landscape.  Many Virgin Islanders have an entrepreneurial spirit and would even prefer owning their own business, but a business that does not perform well will necessitate the business owner seeking a 9-5 job while running their business on the side.  Ideally, one would want business to be so successful that the 9-5 job is no longer necessary.  Many small business owners are struggling to make this a reality.

 

The Way Forward

What is the solution to the reduced opportunities for employment in the Virgin Islands economy?  Firstly, we must have proper planning.  The government has a very important department named the Development Planning Unit.  This is the primary government institution responsible for the collection and analysis of information by which government can make informed decisions.  However, this unit has been unable to fulfill its mandate due to a lack of human resources and appropriate processes in place to capture data.  Therefore, decisions seem to be made whimsically as a consequence of scarce information.  This trend must be put to an end by arming the Development Planning Unit with all it needs to gather, process, and interpret data so that proper planning can take place.

Once statistical data has been analyzed, opportunities in the economy can be identified, and our education system can ensure that our young people are equipped to seize these opportunities.  This would involve an assessment of the labour needs of the Virgin Islands while developing courses, programs, and offering scholarships for further study in the required areas.  Our education system must produce the quality of human resources necessary for functioning in the modern Virgin Islands economy.  Our schools must generate hard working, intelligent, creative, critical thinking individuals that add value wherever they are positioned.

In addition to better planning and an improved education system, a rational immigration and labour policy must be adopted.  The labour needs of today are different from the labour needs of forty years ago.  Our immigration and labour policies must reflect that.

In order to ensure that young Virgin Islanders graduating from secondary and tertiary institutions have sufficient opportunities, the pool of labour in the territory must not be too large.  Businesses must be able to draw on the labour that is available locally.  For this to happen not only must Virgin Islanders be educated and skilled, they must also be motivated, meaning that the social system must not stigmatize certain forms of employment.

A strong business bureau, which can support the efforts of locals in forming businesses, is an absolute necessity.  The recent news that the National Business Bureau has partnered with the National Bank of the Virgin Islands to help provide credit for small businesses is welcome.  In addition to easier access to credit, locals can assist themselves by partnering in investment groups to improve their chances of success in business.  The BVI investment club has provided a model that can be followed.

We must also accept that a growing population with growing needs requires a growing economy.  Financial services and Tourism must be supported by other industries to sustain the prosperity experienced in recent years.  Food production is a logical place to look.  Our vast waters can certainly facilitate the territory’s demand for fish, and I believe that poultry and other forms of meat can be produced locally, thereby reducing the import bill while circulating money and providing employment. 

There are many opportunities out there, but one thing is certain: we must be proactive in searching for solutions.  We cannot simply rest on our laurels and expect the model that has served us up until this point to continue to provide comfort in the future.  We must embrace change, and strong leadership is required in ushering in change, but the question remains, “are we ready?”  Let us hope that we all answer yes because our future depends on it.

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