The Road to El Dorado
For the effective policymaker pursuing a Virgin Islands national vision, both current economic ideas—austerity and stimulus—offer a route to the land of Milk and Honey.
This narrative will dwell on the Supply Side road to economic prosperity.
OK. The Visionary Politician views Jack the Local and International Investor as a critical partner in any strategic plan leading to the national vision. Once a vision has been set out and agreed upon by government and voter, then private investment is viewed as the most important avenue to El Dorado under the free market model.
For example, the West End Ferry Dock Development and surrounding infrastructure is rightly viewed as critical to Virgin Islands travel and tourism. In reaching a vision of increasing the number of overnight travelers into the territory; who are the travelers that drive the tourism economy at its core, the West End Dock is a crucial infrastructure.
However, the government has two economic options when considering how to provide funding for the project. Government should use these two economic options in assessing the best route ahead.
First, the government can follow the stimulus route. Under Stimulus government spends taxpayer cash directly on the Ferry Dock through using cash it has in its reserves or borrowing from the bank or similar financial institution. The project is managed and financed completely by government. The government owns the dock.
Stimulus will get the project off the ground, put cash in the pockets of contractors and workers—which further stimulates the economy—and end up in project completion. A user-friendly and well-managed ferry dock will drive travelers who overnight into the territory, providing government has made provision for available rooms for travelers.
Alternately, under the Supply Side Austere Model, government subcontracts the development to an investor who will own the lease of the project for say 20 years. The private investor will provide the funding for the project. After the project is completed, the investor will enjoy the benefits of owning the ferry dock through the earning of various fees, docking charges, berthing, and renting parts of the dock to businesses.
However, under the private investment model, the outcome remains the same. The dock is built and drives traveler traffic into the Virgin Islands.
Of course, when a private investor ‘’runs the show’’ stipulation must be made for the community to have a say in the management of the dock through taxation, legislation, and a government seat on the board that runs the dock.
Under both Stimulus and Austerity, the outcome remains the same.
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