Hon Penn blasted for suggesting VI take £300M UK Loan Guarantee
Hon Penn, in a February 22, 2021, statement accusing the Government of having no plan for COVID-19, said, “There is no plan to finalise the $400m loan guarantee, and might I add - losing access to this money is a dagger to the heart. Imagine where our territory would be if we had that money and leadership that understood how to use it to benefit the territory in the long term,” he said.
Skelton-Cline fires back
Social Commentator Claude O. Skelton Cline has since hit back at the Opposition Leader, referring to the argument as problematic, given the valid concerns the VI has about accepting the loan guarantee, and the refusal of the UK to address the concerns in writing.
“I see him refer to, and in fact says that we should have gotten and taken advantage of the loan guarantee offered by the UK, knowing fully well that the Protocols for Effective Financial Management and all of its ancillary instruments… that there were things there that raised more questions than answers answered,” Skelton-Cline remarked.
In addressing one of the ambiguities surrounding the Loan Guarantee, Premier Andrew A. Fahie (R1) in August 2019 said the Protocol for Effective Financial Management signed between the National Democratic Party (NDP) Government and the UK in 2012, stipulates certain financial indicators that must be maintained.
UK refused to address VI concerns in writing - Premier
The Protocols, based on revenues, expenditure, debt and debt servicing were signed before the 2017 Hurricanes, therefore, according to the Premier, it was only fair that certain ratios be readjusted to take into account the VI’s economic reality—post-hurricanes Irma and Maria—given the territory’s lowered earning capacity.
“Unless these ratios are adjusted, or suspended, the Virgin Islands runs the risk of exceeding the levels set and being accused of defaulting on the terms of the [Loan] Guarantee,” Hon Fahie had said.
Premier Fahie said no indication has been given in writing to date that conditions would be relaxed.
He reasoned that had the territory agree to the loan guarantee, the COVID-19 pandemic would have adversely affected VI’s ability to meet the loan stipulations.
Pandemic would have impacted loan conditions
According to Skelton-Cline, “Were we to have gone under… and draw down from that, we would have been up the creek now without a paddle because diminishing revenues, tourism flat on its back, financial services under continuous attack by the same UK and other European countries and yet Honourable Penn is here trying to suggest now we should have taken this loan?”
Senior Opposition Legislator Hon Julian Fraser RA, speaking at a public meeting at St Mary’s Church Hall on Virgin Gorda, on March 7, 2018, said that should the VI take the loan with the current conditions, the territory could become the victim of countries and institutions whose agenda is to enrich themselves while making other countries heavily indebted and ultimately getting the upper hand over those countries’ government and economy.
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29 Responses to “Hon Penn blasted for suggesting VI take £300M UK Loan Guarantee”
Second what is the alternative since we did not have enough reserves or insurance to re-build after Irma. The answer to that is pretty small dollar loans from Caribbean Development Bank and dipping into the social security/pension fund. It remains to be seen whether that expenditure ends up being accounted for.
There are so many ways of viewing our past and if people get hung up one one of them, that’s all they will see. And that will distort their thought processing, and give them distorted outcomes.
Not saying ignore race in our context. Just saying if you want the best for yourself and the BVI, consider the many other factors at play in our lives, too.
Straight up, you are wrong.
Fine example of why attributing racism to everything is stupid. You will not win a fight if your defense is based on a misunderstanding of the attacker’s aim.
Hint, they just want people of any color anywhere to stop hiding their money.
If we had simply taken the guarantee, even if sensibly having timely renegotiated some of the terms, and accepted the assistance offered, we could have already much better infrastructure (built to proper spec and having a whole host of contractors share in this growth), more robust economy, properly built 21st century schools, and higher tax take in the increased activity. We'd give nothing of import away. The guarantee merely means we have a large country standing behind the loans in case we have a period of difficulty repaying the banks/funds.
@Hmm the UK has no benefit to controlling the BVI, only downside. It's in the UK's interests for its OTs to all have up to date infrastructure and amenities, good governance and to be able to grow more independently going forward. Anything else costs the UK time, resources and bad PR.
I have said it before RDA is running on fumes without a large cashflow to operate and once the CDB loan amount runs out, we will be in more trouble.
When you take out a loan you have to put up assets which are lost if you are unable to pay on time.
When your house blows down a friend will never offer a loan they know you may not be able to repay!
Especially if they know you can not earn as much after your house was destroyed.
Now COVID hits and the same ‘friend’ says fund your own stimulus.
Cant make this up. They expected the new politicians to scroll to the bottom and click accept without considering the terms of the contract. As if we can not think for ourselves.
Leave bad deals alone it’s that simple. A bad deal means no deal.
The last administration was the definition of gullible.
You are worried about defaulting when the whole point was that the UK would cover us if we defaulted on any loan that we took from outside institutions anywhere in the world. Only problem with it was that every cent had to be accounted for and this didn’t seem popular among the BVI’s politicians.
Repeat: it was a loan guarantee, not a loan that the UK offered.
This I believe is one of the reasons they never borrowed against the guarantee.
The loan guarantee is a subtle trap for the Premier, because once he signs on to the agreement and the funds starts to flow, there cannot be any further negotiation with the guarantor. Firstly, with the Financial Services under threat by the same British Government and secondly Tourism is contracting as a result of COVID-19, where will the revenue come from to repay the loan. Perhaps, another forty years the Territory we will not be able to repay its debts. As citizens we need to take our time and develop the territory. If the economy fails, then it will not affect us here, there will be a domino effect in over one hundred countries around the world. The Premier is doing a good job and I will support him one hundred percent.
I think Hon. Penn should ask the NDP why the government did not purchase Little Dix Bay Marina for the benefit of the people when it was being sold and why they allowed the Investment Club to purchase it. Secondly why the NDP government gave Ocean Conversion water plant that belongs to the government to be operated by the Investment Club? These are things he should talk.