Address by Premier and Minister of Finance
Hon. Ralph T. O’Neal, OBE
“Report On Government’s First Year in Office”
Monday, 25th August, 2008

~~Adz:Right~~Roadtown, Tortola- Greetings to all the people of the British Virgin Islands and all those listening or watching in the neighbouring islands and throughout theCaribbean.

I extend condolences and sympathy to all those who have lost relatives and friends during the past year and we remember the contributions they made in many areas of the Territory’s development.

One year ago [23rd August, 2007], the Virgin Islands Party Government took over the administration of this country.  We were provided with a mandate to chart the development of the Virgin Islands for the next four years.  We were fully aware of the fact that it was under a new Constitution which made provision for the elected members forming the Government to have more responsibility than under the previous Constitution.  For example, two elected members would sit on the National Security Council; a new feature introduced which has a part to play in dealing with the Police Force.

Additionally the Governor, the Premier and the Cabinet Secretary would meet once a week to fix the agenda for the Cabinet meeting the following week.

As we commemorate this first anniversary, we thought that it would be useful to reflect on the last 365 days and report to you our constituents what we have been able to accomplish.  Despite the many stumbling blocks we met on the way and are still meeting, we have managed to forge ahead and make some important decisions that will bear fruit very soon.

Government finances
We had to spend the greater part of the 365 days getting the financial situation of the Territory in order, and believe me my people, up to the 21st of this month, bills were still coming in for work that was done in 2006 and the early part of 2007.  Of course once proof is received that the work had been done, payment would have to be made. 

Another glaring example is that we were told several times that British Virgin Islanders attending the H.Lavity Stoutt Community College would get tuition free of cost.  We were presented with a bill of $1.3 million for BVI students, who attended the College under the pretext of free tuition, but the lecturers and staff of the College had to be paid and this payment comes from the fees that students pay.  However, life must go on and we wish to thank you the people for your patience and tolerance while we try to get over the various hurdles with which we were faced.

Although we worked tirelessly to gain your support, the election of the Government did not represent the end of our efforts, but instead signaled the beginning of a new period in the development of the Territory, a dynamic era, an age of vibrancy, truly reflective of what is needed as we strive to ensure the survival of the Virgin Islands in an increasingly competitive global arena.

When we assumed office in 2007, we promised that we would:
• Make every effort to improve the morale of the Royal Virgin Islands Police Force.
• Foster economic growth and development through diversification.
• Maintain our leadership position as a unique tourist destination.
• Develop and promote our world class Financial Services Sector.
• Increase the vibrancy of the Agriculture Industry.
• Improve our Education System through the delivery of quality education and training
• Promote the delivery of impeccable health care services
• Ensure that there is an adequate supply of water and electricity
• Provide a proper sewerage system in Road Town and Sea Cow’s Bay, Long Look and East End, and Virgin Gorda.
• Encourage positive youth development by creating a system of training, education, mentorship, sports and culture.

~~Adz:Left~~ I am happy to report that Government has recorded some major achievements.  The success of any Government is often measured by its ability to manage the economy and the accompanying economic status of the citizens.  Despite the pressure of the global economic downturn and the need to pay off the debts incurred by the 2003-2007 Administration, Government has maintained the Territory’s economic growth and unemployment continues to be minimal.  The uncertainty of the world’s financial markets, the weakening of the United States dollar and soaring oil prices continue to significantly challenge the capacity of small island states, like ourselves, to maintain economic viability and by extension the ability of citizens to maintain their standard of living.

While Government spearheads the efforts to address these issues, I must emphasise that it is a shared responsibility. You, as citizens of this beloved Territory must also do all within your power to ensure your financial security. Reduce consumption, source imports from cheaper markets, curb waste and improve resourcefulness are just some of the measures that you can take to supplement the efforts of Government.

One of the initiatives embarked upon in the last year is the Establishment Survey, launched in May. The exercise, being conducted by the Development Planning Unit, will supply government and private sector decision-makers with reliable information on how the Territory’s businesses are performing.

The information collected will be compiled and used to develop important and commonly used economic indicators such as the Territory’s Gross Domestic Product and its Gross National Income. It will also allow Government to monitor how different industries in the Territory are contributing to the overall growth of the economy. The data collection phase of the survey should be completed by the end of August.

Financial services sector
The financial services sector continues to be one of the main economic pillars of the Virgin Islands. The Territory’s status as a leading international financial centre was confirmed by the BVI’s inclusion for the first time in the Global Financial Centres Index published by the City of London. The Virgin Islands entered the list of top centres as 27th among 69 leading international finance centres. The index is based on nearly 19,000 assessments from business professionals worldwide. Respondents also placed the BVI among the world’s most stable finance centres, just behind jurisdictions such as Zurich, Hong Kong and the Isle of Man.

With such recognition on the international stage, it is imperative that Government maintains a pro-active approach in the quest to further develop this vital and robust segment of the local economy and at the same time, protect the Territory’s integrity and reputation as a well-regulated international finance centre. The biggest threat to the financial services sector is its susceptibility to money laundering and the BVI Financial Services Commission (FSC) is leading the charge to enhance the Territory’s legislative arsenal of protection from financial crime.

Government recognises the critical need to protect the sector by adopting measures to deter and combat financial crime in keeping with the changing global environment. In February this year, the FSC, acting in accordance with the powers granted under Section 27 of the Proceeds of Criminal Conduct Act, 1997, issued the Anti-money Laundering and Terrorist Financing Code of Practice and the Non-financial Business Notice. The code replaces the Guidance Notes on the Prevention of Money Laundering, issued in 1999, and serves as a practical guide for compliance with standards on anti-money laundering and combating terrorist financing.  As part of the BVI’s anti-money laundering regime, the code fosters a climate of compliance that meets international standards and secures the integrity of the BVI financial services industry.

On the promotional front, the BVI International Finance Centre (BVIIFC) continues to actively market the Territory as a world-class financial services centre. In the past year, the jurisdiction witnessed a record number of BVI business company incorporations following IFC Roadshows to London, Hong Kong, Singapore, Dubai and Qatar.

In July, the IFC hosted a high level retreat to examine the products and services that are offered by the Territory’s financial services sector, opportunities in new and emerging markets around the world, and development of our human resources.

~~Adz:Right~~ All of the delegates in attendance acknowledged that there should be a deeper understanding of the financial services among Virgin Islanders and I welcomed their commitment to undertake more training and mentoring so that greater numbers of Virgin Islanders reach senior levels within the sector. The retreat was a resounding success, it provided a welcome opportunity to discuss how the robust regulatory regime that has been established benefits our private sector and where further developments might be helpful.

The IFC has obviously been hard at work and its commitment to high quality, professional service has not gone unnoticed. The BVI IFC is one of the nominees for the “International Finance Centre of the Year” in The Society of Trust and Estate Practitioners (STEP) 2008/2009 Private Client Awards.  The winners will be announced at the awards ceremony in September.

The BVI’s nomination and the obvious strides made in the sector in the last 12 months are particularly heartening when we consider that our entire reputation as a financial centre could have been attacked and destroyed by external forces had we not been vigilant.  I thank Almighty God that this was not to be. The Attorney General Chambers provided outstanding leadership and support as the Territory prepared for the recent Caribbean Financial Action Task Force (CFATF) Evaluation. The Chambers’ assistance to the Territory as a whole and the House of Assembly has been invaluable.

Tourism sector
A critical initiative of this Government in the past year has been the establishment of a permanent airlift task force to continuously liaise with the airlines servicing the Territory. Pending Cabinet’s approval, I in my capacity as Minister for Tourism will head up this taskforce and our mandate will be to continually seek to improve the relationship with the airlines.

I firmly believe that the creation of this task force is a crucial development given the fact that the lack of adequate air access continues to be one of the major challenges facing the local tourism industry. Government’s efforts to improve air access to the Territory clearly demonstrate how serious we are about ensuring the survival of the tourism industry and by extension, the economy of the Virgin Islands.

Shipping registry
One of the more notable achievements in the past year is the promotion of the Territory to a Category One ship registry status by way of an Order in Council, signed by the United Kingdom’s Privy Council in May this year and enforced one month later. This new status permits the Virgin Islands Shipping Registry to register mega and super yachts of up to 3000 gross tonnage and general cargo ships of unlimited tonnage.

It means therefore that the Virgin Islands have joined Bermuda, the Cayman Islands, the Isle of Man, Gibraltar and the United Kingdom among the Red Ensign Group countries with a Category One ship registry. At the end of 2007, 3180 vessels were listed on the register and with the attainment of this new status and its potential to attract mega yachts, a category previously prohibited, we can definitely expect that number to increase significantly by the end of this year.   Work to attain the status was started over six years ago and my thanks go out to all those who worked so hard to obtain that category especially Captain Baboucar Sallah.

Anegada lands
In the past year, Government made good on its promise to the people of Anegada, by initiating what it is hoped will be the settlement of the long-standing debate over land ownership there. For decades, the ownership and allocation of land on our sister island remained a contentious issue that has plagued successive administrations. Some years ago we were able to distribute some land but unfortunately it came to a grinding halt.  However, Government is now ready to begin again the distribution if land titles to the people of Anegada.  It is our intention to start issuing these land titles by the end of 2008.

In November last year, myself and the Minister for Natural Resources and Labour, Honourable Omar W. Hodge presented to the people of Anegada the first draft of a revised plan for the Anegada Development Project and Land Allocation Task. Since then, that draft has been revised to better reflect the views of Anegadians.

On 28th August, we will meet again with the people of Anegada to ensure that they all become familiar with the procedures for receiving land titles and the selection process involved. Similar public meetings will be held in the United States Virgin Islands and New York because we want to ensure that all Anegadians are aware of this development and that they are provided with an opportunity to voice their opinion.

~~Adz:Left~~ Jost Van Dyke
On Jost Van Dyke, plans are being prepared for a Community Centre and it is proposed to increase the water supply.  To enable the ferry service to be improved, Government has granted the operator pioneer status and we are anxiously looking forward for this to play a significant part in the growth of the tourist industry on Jost Van Dyke.

This brothers and sisters is what good governance is all about, encouraging the participation of all,  providing an opportunity for the voice of the masses to be heard and incorporating their suggestions into the plans designed to foster the development of this great land of ours. We are cognizant too of the need to ensure that this development is widespread and have made a concerted effort to have the sister islands incorporated into our development thrusts.

Virgin Gorda Airport
The proof has been clearly demonstrated in the past year. In June, Government signed a contract with the United Kingdom-based Halcrow Group Limited to produce a safer and more modern airport on Virgin Gorda. The new airport will be constructed according to international standards and will have the capacity to accommodate 19-seater aircraft. I have every confidence in Halcrow Group Limited because they have an excellent track record, having successfully completed similar airport projects on other Caribbean islands, including Montserrat and the Commonwealth of Dominica.

After the contract signing, myself and other Government representatives as well as officials from Halcrow, met with the residents of Virgin Gorda to inform them about the project and the benefits for the island. This outreach effort forms part of a larger commitment to involve the community in large development projects and work on this front is spearheaded by the Town and Country Planning Unit. Additionally, as we pursue development, we have to also ensure that it does not negatively impact the environment and here again the Town and Country Planning Unit helps to keep us mindful of the need to conduct environmental impact assessments as required in the Physical Planning Act of 2004.

Commercial court
Another significant infrastructural development project is the start of work to construct a Commercial Court in the Virgin Islands. It is anticipated that by 2009, we will have a world-class court of which we expect will attract new, high end, commercial business to the Territory.

The court will serve as the Commercial Division of the Eastern Caribbean Supreme Court (ECSC) in the Virgin Islands. As construction progresses, a Steering Committee has also been established to focus on the recruitment of the first commercial court judge, the recruitment of staff for the court and the establishment of court rules.

~~Adz:Right~~Healthcare
The delivery of world-class healthcare services continues to be a priority area for Government, evidenced by the ongoing project to construct a new Peebles Hospital. The construction of this new state of the art facility has been progressing at a steady pace and the new completion date is May 2009.  It is with high expectation that this Government and our Territory as a whole anticipate the completion of the hospital project.

With the structure beginning to take shape, I am sure more of us are now better able to appreciate the scope of this project while gaining a sense of what the end product will be like. The Ministry of Health and Social Development is currently working on a second video documentary to update the public on the progress made within recent weeks. The new video will be aired on local television towards the end of September.   

Not only are we improving the infrastructure within the health sector, we are also expanding the range of healthcare services provided as part of the overall effort by the BVI Health Services Authority to enhance quality and variety in the health sector.

In July this year, a number of new services were introduced at the clinics across our Territory including obstetrical, gynaecological and paediatric services. Other newly added services include weekly orthopedic clinics; pathology services; radiology; cardiology; and gastroenterology. We have also created a clinical pathology lab, improved the blood banking services, and created an enhanced emergency room area that offers upgraded equipment and furnishings. The Health Services Authority has also added an Orthodontist and a Vascular Surgeon, both of whom are native BVIslanders, to the repertoire of health professionals servicing the sector.

We are also continuing our efforts to improve and expand the range of tertiary healthcare services and advantageous networking arrangements with other health care facilities in the Caribbean and the United States. Following visits to two Florida based hospitals in May this year, the Ministry of Health and Social Development is considering options proposed and discussed in an attempt to better meet the needs of BVIslanders who utilise the services of Jackson Memorial Hospital and Baptist Hospital with its network of seven affiliates.

Sports
Government’s commitment to sports and youth development was clearly demonstrated in our first year in office with the completion of the eight-lane rubberised track at the A. O. Shirley Recreation Grounds. The new facility which has since received the International Association of Athletics Federation (IAAF) Class II certification was officially opened in April. Government spent an enormous amount of money on the rubberised track and with its rating as one of the best in the Caribbean, the onus is on all of us as a people to protect this sizeable investment. Its existence creates new opportunities for us to compete for the privilege of hosting significant athletic competitions.

Social Security
As we support the youth, so too, must we support the elderly, those who have given years of service and contributed in a variety of ways to our development. Social security is the main means through which we lend this support and it is with great pleasure that I disclose that the assets of the Social Security Board are valued at approximately $322 million as of July 31, 2008, increasing from $275 million at the end of 2006.

The ninth Actuarial Review of the Social Security Fund covering the period from January 1, 2004 to December 21, 2006, revealed that the economic expansion experienced in the British Virgin Islands over the past few decades continues to provide a strong economic foundation for the long-term growth and sustainability of the fund.

Based on this strong economic performance, Government has approved several recommendations coming out of the Actuarial Review. These include a 50 percent increase in funeral and maternity grants, a reduction in the qualifying period for invalidity and survivors pensions, a 25 percent increase in minimum age pension and the provision of payment of age pension or Invalidity pension with survivors pension.  These increases in benefits will take effect from 1st January, 2009.

~~Adz:Left~~Education
In the education sector, Government continues to focus on the delivery of quality education by exposing teachers to relevant training. Better trained teachers will help propel our students to higher levels of academic achievement. The Ministry of Education and Culture has entered into an historic agreement with the H. Lavity Stoutt Community College (HLSCC) for a Bachelor in Education programme to be delivered to the first cohort of 20 teachers beginning in the 2008/2009 academic year and using the curriculum of the University of the West Indies.

The teachers, all of who are from the public primary school system, will undertake the two year programme, specialising in the areas of English/Literacy, Special Education and Social Studies.  It is expected that within the next 10 years or by the end of the fifth cohort of teachers, the majority of our public primary school teachers will have attained at least a Bachelor’s Degree. This achievement would put us at the top of the list of Caribbean countries that can boast of this accomplishment. 

The cost to Government will be well over $2 million for each cohort of teachers, including their replacements and relative compensation. However, when we consider the fact that children are our future, the value to be derived from this investment will be priceless.

Government is committed to ensuring that all children in the Territory receive a secondary education. Recognising the tremendous financial burden parents face as they send their children to school, Government initiated an assistance programme in the 2007/2008 academic year. Under the school textbook loan programme, parents volunteer to sign an agreement which gives them full access to all their children’s required text books.

The main stipulation is that the books must be returned to the respective schools in good condition prior to the start of the next school year. Participation in this initiative is not compulsory but almost 50 percent of the students attending our secondary public schools have enrolled in the programme. This initiative will continue in the up-coming 2008/2009 school year and beyond.  Plans are also afoot to extend it to the public primary schools in the near future.

At the tertiary level, HLSCC recorded the highest enrolment in its history in the past year, with 1070 students enrolled in the Spring Semester earlier this year. Of this number, 870 benefited from Government’s Tuition Assistance Programme. The Virgin Gorda Centre, in particular, has also grown dramatically, with enrolment almost doubling to just under 100 students over the past academic year.   It is expected that a new building providing extra space will be made available in the very near future.

As part of efforts to meet the growing demands of the students and to expand the areas of training, Government signed an agreement with the European Commission (EC) for the creation of the BVI Culinary Arts Centre. Government will invest $1 million into the establishment of this facility and the European Commission has agreed to provide $1.53 million. The culinary arts centre is a significant development because it will help to provide a cadre of better-trained persons for the tourism industry. We expect the centre to be operational by 2012.

Other efforts have been made to help the college meet the demands for training in the technical and vocational arena. In September last year, the College was accredited as an examination centre for the City and Guilds Institute. The designation of HLSCC as an accredited City and Guilds Centre means that the College is now authorized to offer International Certificate and Diploma qualifications in Motor Vehicle Studies as well as to offer any of City and Guilds’ international examinations. Additionally, the Disaster Management degree offered by HLSCC is now well established and an online version of the programme has been piloted, making it available to individuals outside of the Virgin Islands through our distance learning technology.

~~Adz:Right~~ Infrastructure
In the past year, Government demonstrated its continuing commitment to improving the Territory’s public utilities. One of the major projects, we have embarked upon is the Feeder Relocation Project for the Wickham’s Cay I area. This project entailed the burying of conduits and pulling the electrical wires in several parts of Road Town.

Approximately 80 percent of the electrical wires have been pulled and the project is expected to be completed by the end of the year. The relocation of the feeders is designed to upgrade the electrical infrastructure of the commercial and financial district, beautify Road Town and provide the necessary reserve capacity to supply Wickham’s Cay one.

The Water and Sewerage Department also continued its infrastructural development programme. As part of the Department’s Water Supply Network Future Planning and Extension Projects, a total of 15,742 feet of water mains were laid at Mount Healthy, Brewer’s Bay and Sheppard Hill on Tortola, and Mahoe Bay on Virgin Gorda. The project cost approximately $1.2 million.

Also under the Ministry of Communications and Works, the Telephone Services Management Unit successfully installed Voice over IP (VoIP) communication service at several satellite government departments and statutory bodies including Magistracy, Post Office, Fire and Rescue Service, Department of Disaster Management, Offices in the RFG Building, Telecommunications Regulation Commission, and the International Finance Centre.

We expect to significantly reduce expenditure in this area in the coming years because VoIP is a cost efficient service that requires only one line for both voice and data and it enables Government’s satellite offices to have the same telecommunication services as the main office complex. Preparatory work is now underway for the installation of VoIP service at all Government schools in the Territory.

Another significant development was the installation of a Port Management Information System, by Klein System Group at various port facilities. At a cost of $315,000, this computerized information system, once completed, will integrate operations management, billing, vessel schedule planning, and day-to-day port and cargo operations.

BVI Post continued to provide excellent mail service to the people of the Territory by embarking on a few initiatives. A Miami-based delivery service called Ezone was recently launched and already 200 persons have signed on for this service. The Post Office has also embarked on a number of technological initiatives all of which will improve the efficiency with which it serves the Virgin Islands.

In the past year, a new production studio was created for the Department of Information and Public Relations. Its official opening later this month will end several years of dependency on the private sector for the production of Government’s audio-visual material.  Production costs will be significantly reduced now that 90% of the material currently produced by the private sector will now be produced in the GIS Production Studio. It is envisaged that Government will have more autonomy over its audio and video productions which is likely to result in more timely, better quality and more accurate information being disseminated to the public. A digital audio-visual library will also complement the new facility and would allow quick and easy access to information by the public.

Another notable infrastructural development is the new immigration detention centre and female prison at Balsam Ghut, which also helps Government to fulfill its obligations associated with various human rights conventions. This new facility will help to silence the critics who have condemned us for not having a suitable place for detaining illegal migrants because it provides for inmates and immigration detainees alike, conditions that are consistent with human dignity. The Territory has a long history with illegal migration that predates the 1940s, and modern trends towards a globalised community have increased pressures for governments to provide detention facilities that are capable of achieving world standards for safety and security.

 ~~Adz:Left~~Public sector
In the continued battle against illegal immigration and to effectively serve those who legitimately visit our shores, 16 immigration officers participated in a training workshop under the theme Enhancing Border Protection with Quality Service. We recognise that the job of immigration officers is a delicate one as they strike a delicate balance in the execution of their duties to protect the Territory’s borders, while at the same time serve as ambassadors for the Territory, the economy of which thrives on tourism. The training also represents Government’s commitment to developing its human resource base.

In the past year too, there was renewed focus on reform for the Territory’s Public Service with the identification of four main areas, namely, service delivery, financial management, strategic planning, and human resources management.

To date, the majority of government departments have revised their service charters in an attempt to ensure that they adhere to the agreed upon standards. The financial reform, led by the Ministry of Finance is underway with a key element, the introduction of accrual accounting to be accomplished by 2011. The concept of output budgeting has already been introduced with the objective of ensuring that government spending is in line with its priorities. Government has high expectations for this public sector reform programme including the delivery of improved service to you the general public in keeping with the strategic objectives we have identified to promote development.

I must also mention the improvements that have been made in Public Service Reformation. It is very noticeable in some departments of Government that the public servants go out of their way to help the citizens when they visit their office and this is excellent and I hope it will spread to every department and statutory board. While we would like to contain Government, when the public demands more and more service, this can only be provided by having more people work and this Government will continue to train and help those who show desire for training.

There are some public servants who I consider, went beyond the call of duty, and to whom I have written, to express my personal thanks and appreciation for what they have done. I would like to thank all those persons in the public service and in the statutory bodies for all the help, kindnesses and courtesies extended to us during the past year.

Deputy Governor
I should mention here that on Thursday afternoon, at around 5:00 p.m., His Excellency the Governor informed me orally, that he had been instructed by the Under Secretary of State, Meg Munn, to appoint Mrs. Inez Archibald as Deputy Governor. I replied to His Excellency that he knows my views on the matter but there is no doubt that this was arranged some time ago that she would become Deputy Governor and a new Speaker would be elected. A new Speaker was elected but it was not the one planned for.

It is no secret that Government is violently opposed to the appointment and I made sure that I mentioned to His Excellency that I cannot see how a person will be in charge of informing people that they have to retire at the age of 60, when that individual is already over 60 years of age. I guess he would have to amend the Pension Law, but my dear people this is another hurdle we will have to pass over and we shall do it.

Conclusion
These afore-mentioned developments represent just a fraction of what Government has achieved within the past year. We have simply paused for reflection. There is still a lot to be accomplished on our agenda to bring cohesive and sustained development to the Virgin Islands. As we continue to work over the next three years and with your support, beyond, we assure you of an unfailing commitment to creating a Territory we can all be proud of, where development for one means development for all.

It is the vision of this Government that the Virgin Islands will be a socially cohesive, just, safe and prosperous community populated by healthy, well-educated persons who respect and use their environment in a sustainable manner. To facilitate this, we as a Government have pledged to ensure that the economy is strong, that it is in fact growing and that we are adapting to the changes made necessary by the increasing globalisation of the world in which we live.

I refer again to the issue of good governance. It comprises among other things widespread participation, consensus-building, transparency at all levels, effectiveness and efficiency, accountability, equity and cognizance of current and future needs. These are the core principles on which this Government operates and as we look forward to our remaining three years in office, I pledge to you the people of these Virgin Islands that Government will continue to work steadfastly to deliver on the promises made and to ensure that the requisite development to take the Territory forward does in fact take place.