(Photo Credit: BVI Platinum News)
His Excellency Governor Augustus Jaspert issued a statement on Monday evening (August 19), announcing that some of the points of concern that were raised in Premier and Minister for Finance, Hon. Andrew Fahie’s August 16 statement on the Recovery and Development Loan Guarantee were already discussed and provided for, and that the UK is not trying to infringe on the Territory’s Constitution or autonomy.
In his statement on Friday, Premier Fahie announced that agreements that were made with the United Kingdom Government seemingly infringe on the Constitution of the Territory and the autonomy it has.
Hon. Fahie explained that the contentious matter relates to the High Level Framework for UK Support to BVI Hurricane Recovery Agreement and the Protocols for Effective Financial Management. According to the Premier, aspects of both documents are causing difficulties in post disaster BVI and are now threatening the financial and economic independence of the Territory.
However, in his response, the Governor stated that this was not so and noted that the UK Government was not trying to overstep.
"The UK and Virgin Islands Governments discussed how best to support the Territory’s longerterm recovery and development. Both were clear that the Government of the Virgin Islands retains management of the Territory’s finances and the policy direction of Government as per the Virgin Islands’ Constitution. There is no change to this," Governor Jaspert said.
In assuring that there will be no Constitutional infringement, the Governor declared that the UK has no interest in managing the BVI's finances via the RDA.
"The loan guarantee does not take control of public finances away from the Government, nor change arrangements as set out in the Constitution. The UK Government has no intention that control of the management of public finances be transferred to the RDA...I assented to the Virgin Islands Recovery and Development Agency Act on 12 April 2018, as the Virgin Islands Government’s legal view was clear that it does not conflict in any way with the Constitution."
He further explained that the arrangement with the loan guarantee was in keeping with international best practices and reflected agreements by both Governments.
"The agreed approach was for the UK Government to underwrite and guarantee loans of up to £300m to support the Territory’s recovery – offering to stand with the Virgin Islands in negotiations with lenders, backing the ability to repay and deliver a BVI-led recovery."
Further, Governor Jaspert said that the UK Government set conditions to ensure that all recovery measures are accountable and represent value for money, and that the additional borrowing is sustainable.
"The conditions are linked to international financial best practice. By adhering to them, the Government will simply be ensuring financing to the RDA is well managed. Similarly, any banks offering loans will want to set conditions on their use and repayment. This is good financial practice, ultimately ensuring value for money, accountability and transparency for the people of the Virgin Islands," he pointed out.
In relation to the Protocols for Effective Financial Management, the Premier in his statement said that the document, which was signed on April 23, 2012 included the application of certain financial ratios that were based on the figures and the economic environment of 2012. These, he said, changed substantially after the protocols were agreed to, and even more so after the natural disasters of 2017. Therefore, the Premier said that based on the times the Territory is in and what the BVI is dealing with, the particular conditions should not be strictly applied or the ratios should be revised or suspended.
In response, the Governor announced that the UK is willing to consider proposal to extend the Territory's compliance to the Protocols.
"The UK Government has acknowledged that any new borrowing could cause the Government of the Virgin Islands to remain temporarily out of compliance with the existing borrowing ratios under the Protocols for Effective Financial Management. The very offer of a loan guarantee is an indication by the UK Government that if the Government of the Virgin Islands’ analysis shows that it will breach the borrowing ratios, the UK Government would consider proposals for an extended date to return to compliance and it has made clear that there are already arrangements under the Protocols for Effective Financial Management to do just that," Governor Jaspert said.