ROADTOWN Tortola BVI, February, 2nd, 2012  --  Ladies and Gentlemen Ministers of Government Members for House of Assembly Members of the Public Service Members of the Press Good afternoon. Today I want to talk to you about initiatives that were raised in my Budget Address which are vital to our economy and all residents of the Territory. They are:

1. My initial approach to lowering the cost of goods for sale in the Territory
2. Declaration of Gun Creek as a port of entry into the British Virgin Islands
3. Initiation of a 6 day per week ferry service between Road Harbour on Tortola and Settling Point on Anegada

With effect from the 1st February, 2012, today, the policy of government with respect to goods being imported into the Territory is that duty will be levied on freight on port costs and not on cost, insurance and freight as is the current practice.

I spoke about this in my Budget address and my press conference this afternoon illustrates that with my government, a promise made is a promise kept. Ladies and Gentlemen the fundamentals of my government’s approach to economic recovery is that we minimise direct contributions into the economy by Central Government via transfers and direct participation and instead provide an enabling environment, so that the private sector as a more efficient and responsive vehicle, can be the main driver for economic growth and development.

I indicated that we would lower the cost of goods imported into the Territory by charging - import duties on freight on port costs as opposed to what is currently done on cost insurance and freight. People in this Territory are subjected to very high prices especially for food and household items that cause them to experience hardships in meeting the needs of their families.

These hardships have negatively impacted the quality of life that we are accustomed to in this territory as more and more of our residents have difficulties with basic survival. I have heard the cries, ladies and gentlemen. I hear the complaints that prices fluctuate widely on the supermarket shelves and that we are spending more of our paychecks for food, clothing and shelter.

I know that is why an increasing number of you shop overseas and spend in excess of an estimated $40million per year doing so. We need that money to stay in our economy and we believe that if we were to become competitive in prices, a large portion of that money would indeed remain in the BVI.

If we keep that money in our economy, then our local businesses hire more, turn over their products faster and yes, pay more taxes; a win-win for everyone. Our economy cannot realise its true potential ladies and gentlemen if we continue to expatriate funds out of the Territory. So here is what we expect with this change in duty assessment. We expect that the savings to the local businesses will allow them to provide incentives and lower prices to the consumer.

The 3.7 million dollars in revenue foregone by the Government of the Virgin Islands we consider as an incentive to local businesses that should accrue benefits very soon. In an effort to facilitate the success of this initiative, there will be joint supervision by the Ministry of Finance and the National Business Bureau, and the combined effects of its existence reviewed during and at the end of the next twenty four (24) months.

In regard to this initiative, while I understand that Mr. Wade Smith, Commissioner of Customs, has been requested to take a substantial portion of his leave in accordance with Government’s policy, his absence at this time, and more so in light of the new initiatives I have just announced is not convenient. I have therefore asked that his requirement for leave be deferred to a more suitable and mutually agreeable time frame to allow the work of the department to proceed unimpeded.

I will also take this opportunity to also announce, that on 1st March 2012 Gun Creek in Virgin Gorda will be designated as a port of entry into the British Virgin Islands. The North Sound, of which Gun Creek is a part, is hailed as one of the best anchorages in the Caribbean and is a playground and watering hole for our valued visitors throughout the year.

We believe that the increased convenience that this new port of entry will provide for our visitors will set us well on the way to improving the experience they encounter when they come to and consequently spend time in the BVI.

This is a bold initiative that will require investments upfront but which we are confident we can recoup in user fees, cruising permits and indirect taxes as a result of increased traffic in the Sound. More importantly however, declaring Gun Creek as a port of entry will act as a catalyst for the development of a very important segment of our tourism industry, as well as facilitate the development of the industry in general and commerce in the British Virgin Islands.

Finally, I would like to announce the provision of a six day per week ferry service between Road Town, Tortola and Setting Point on Anegada as of Tuesday of next week (7th February 2012). The people of Anegada must be as connected to their capitol as are the people of the other major islands in the British Virgin Islands.

They deserve to be and in any case, an increased service will have the intended benefit of stimulating the economy of Anegada by providing greater, continuous and affordable access to that island from the main island of Tortola, both for residents and tourists alike.

At the moment the service is being provided three days each week and my intention through this initiative is to provide an additional three days for the duration of the tourist season, initially. My Government will subsidise offsets on a predetermined formula to make the service viable in the short run but we are hopeful that an increase in the use of the service by BVI residents will significantly reduce the level of the subsidy.

Ladies and Gentlemen, bearing in mind that these three initiatives will require noticeable fiscal outlays by the Government of the Virgin Islands, we will monitor them very closely over the next twenty four months in order to measure the effect that they are having on the economy is aligned with our intent, and as a result adjustments made.

As stated previously, we hold the position that it is the regular citizen and the private sector that ultimately provides for a more efficient, developed and growing economy, and consequently we are using these three initiatives as initial steps by which we can create an enabling environment while we continue to develop others.

I ask to you continue to be patient with us as we seek to forge ahead in our quest to improve the living standards experienced by the people of this unique and special place we call home.

Thank You.

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