Kevin E. Malone. Photo: Provided

Regardless of which party is in power, the BVI Government is often on the receiving end of harsh criticisms when it comes to their policies and the ideologies around them. While this is both healthy and necessary for any democracy, the realization of what is RIGHT with the BVI often gets little attention and thus can be lost in the endless public argument.

The recent criticism received by the BVI due to the illegal data leak should be looked at in an economic context as opposed to a personal one. Governments around the world have been unexpectedly thrust deep into the financial red due to the recent global economic recession. With this recession came a dramatic decrease in tax revenue due to high unemployment and the decrease in strong revenue’s normally brought in by the financial industry.

Faced with the prospect of going into temporary economic Armageddon, major economies around the world began the process of buying private assets and government bonds in order to stimulate economies and keep borrowing rates down. This involves creating money that doesn’t really exist in hopes that it will eventually be replaced by an economic recovery. Assuming this economic recovery takes place, there then has to be a way to slowly end the massive level of government financial intervention that has taken place.

One thing that all democratic governments have in common is they all face tough decisions that involve the options of doing what’s best and doing what’s necessary. Contrary to public opinion, the two aren’t always mutually exclusive. In the case of the global recession, governments have been forced to look for new areas to increase revenue in order to keep their balance sheets stable so as to not rock what has become the unsteady ship known as the global economic recovery.

As is true of all recessions, this one has hit the middle and lower class of all societies very hard. Unemployment always starts at the bottom and works its way up. Couple this with government's need to raise revenue and you have a situation where taxes and spending inevitably become the focus of economic policy and the only people politically acceptable to tax are the wealthy. Thus this is where countries like the BVI enter the conversation.

The BVI has the one thing that businesses as well as citizens around the world seek, low taxes. As long as spending is kept in check, a society with low tax rates will thrive and inevitably attract businesses and investors from around the world. This is the goal of every society, but a goal often met with limitations due to respective policies and financial obligations.

The BVI isn’t a place where companies go to avoid paying taxes and hide money for various purposes. It is a jurisdiction that has created a business friendly environment, which ultimately serves to the benefit of its citizens as well as countries abroad. Through various information agreements and agencies, the BVI makes widely available the kind of business which is conducted in its territory and adheres to international standards. Holding money in companies or registering companies in jurisdictions other than one’s country of residence is merely an effort by those parties to legally keep as much of their financial assets as possible.

With this truth comes the truth that it is both legal and appropriate for foreign governments to seek ways to attract revenue that its citizens may be investing overseas. This is part of the competition meant to spurred on by globalization and it’s the duty of any proactive government. However, the best way for a country to attract capital back to the shores in which its citizen’s reside will always be through policies that entice individuals and businesses to voluntarily do so. Whether this route or the legislative route is taken, the BVI will have to think of additional areas to attract international capital as it’s evident that the push to recover overseas assets will only continue to increase in the immediate term.

I think this is a time for the BVI to be proud of the economic model it has created. A country with 28,000 people has constructed an economic model that has allowed it to be a part of the intense competition created by globalization. The biggest beneficiary of globalization is innovation, and it is this innovation that will continue to force businesses, governments and individuals to continually adapt to the times and create successful economic models. 

The BVI has a successful economic model that is causing international capital to enter our shores. While the continuing success of this model may not fully be in the BVI’s control, it something that all of us and not just government representatives should be proud to respectfully defend. We should seek to converse with those who may not understand our financial services sector as it accounts for almost 60% of the country's revenue, thus making it in everyone's best interest to do so...