Dickson Igwe. Photo: VINO

OK! These are fair, acceptable, and even understandable allusions. But this Observer believes they represent a naïve assessment of modern economics. And just like any other country in the world plugged into the global dynamic of free markets, free trade, and cross border capital flows, Foreign Investment in the Virgin Islands is part of the reality of international trade and global integration. And that means countries being receptive to the inflow and outflow of capital, and borderless trade: a dynamic brought about by crucial developments in sea and air transportation, digital technology, and advanced telecommunications.  

Another thing is this: there is no incompatibility between Foreign Investment and national economic diversification. If anything, Foreign Investment, and the access to technology and global expertise foreign investment offers, is crucial to diversifying the Virgin Islands economy.

International trade is both competition and partnership between countries that specialize in what they do best. And access to the scientific and technological knowhow of developed societies is a major benefit of globalization and Foreign Investment for developing economies.

Beginning with the merchants and explorers of the 1600s, 1700s and 1800s, Western businesses and businessmen in the early 1900s initially invested in the Asian region when it was relatively undeveloped, at least by the standards of early 20^th Century Western industrialization.

Then after World War 2, the inflow of Foreign Investment into the Asian Pacific increased substantially. This led to major economic growth in the Far East. The extent and scope of that growth, beginning in the early 1970s, and then continuing for decades after that, eventually surpassed the economic growth of Western countries. This was a narrative about the flow of technological knowhow and capital from west to east: a gradual transference of Western manufacturing to Asia through foreign investment and trade that went on for decades.

As a consequence, Western investment in the Pacific was trigger for hurling Japan, Singapore, South Korea, Taiwan, and China into the forefront of global economic growth. Foreign capital inflows ultimately spurred an export dynamic that was the catalyst that has led to contemporary Chinese and Asian Pacific commercial and industrial power. 

Skepticism about Foreign Investment is essentially a cry for help to the Government to intervene in the local economy, to manage and direct scarce resources to ensure local control. However, Virgin Islands businesses and entrepreneurs are better off facing the global and foreign investment beast head on, and ensuring their businesses are competitive by global standards.   

And that means international collaboration; but it also determines possessing excellent education, effective job training, the very best mechanism for providing the vocations and technical skill sets critical to strong economic growth; and the type of innovation and creativity crucial to a modern free market economy. Add exceptional customer service in every part of the social economy.

Today’s Western economies cannot grow strongly through a culture of entitlement, protectionism, and building walls against international trade. They grow through competition, free trade, and efficiency. Globalization requires a high degree of collaboration, nimble footwork, resourcefulness, and imagination.

Global trade and inward foreign investment will offer Virgin Islands businesses and consumers better options, choices, and economies. Free market globalization will strengthen the national economy by placing Virgin Islands businesses in a far better position to play their part in a world governed by borderless commerce and the lightning fast movement of financial capital across vast and varied landmasses and time zones.

Protectionism and placing barriers against cross border commerce has not been successful policy anywhere. If anything it has proven a barrier to higher standards of living and a better quality of life. Government is always better positioned to do good when it takes its hands off the economy. And this Observer has been hearing about the need for economic diversification and ensuring local control of the business environment in the Virgin Islands for years now.

Economic diversification and national control over the economy in this new and increasingly integrated world is easier said than done. It entails a huge reallocation of scarce resources that are simply unavailable during a difficult economic period. Government led economic diversification also means unhealthy interference in the national economy by the state: never a good thing for free trade and free market dynamism.

Central planning does not work! Just look at the Old Eastern Bloc and the economic collapse that led to the end of Communism and Totalitarianism. Let the market decide the direction of Virgin Islands trade and commerce, and everyone is better off. That is the experience of modern capitalism.

Yes, government should build the roads, hospitals, airports, and docks; schools and colleges; and the drainage, sewage, and key physical infrastructure that aid economic growth. That is the job of government: facilitator and protector. But it is the businessman and businesswoman who must be front and center of economic growth, leading to greater security and prosperity.

To be continued…

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