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The Edgar Leonard Vision of a better Virgin Islands

-Current Affairs Writer, Edgar Leonard, has presented his vision of El Dorado. The following article is part of a series on Virgin Islands politics and economics
Dickson Igwe. Photo: VINO/File
By Dickson Igwe

Edgar Leonard is a popular opinion contributor in the Virgin Islands. Leonard is a bright mind. He is an analytical type. His opinion pieces on economics, and how the management of scarce resources can affect the community for better or worse are required reading for all with a stake in the territory.

On October 21, 2014, the Op Ed writer penned a story titled, “Economic Diversification: Transforming the British Virgin Island Economy.’’ The story offered a visionary model for the country.

Leonard began his article with a snapshot of Virgin Islands economic history. A national vision frequently incorporates a picture of the past as pathway to the present and future. Leonard described Post Emancipation 1834 to the 1960s as a time agriculture, fishing, small stock rearing, coal burning, rum distilling, straw work, boat building, and remittances, composed the country’s economy.

Leonard was instructive. He described how financial services and tourism became overwhelmingly dominant. The preceding agrarian economy declined dramatically. The twin pillars became the economic mainstay giving the country a current per capita income of 42K per annum, one of the highest in the world.

However, this new economy was also an ACHILLES HEEL. That Achille’s heel lay in the overwhelming dominance of the two sectors in the economy. Furthermore, the two economic cultures were dependent on external factors, out of the control of the country.

In establishing his vision, Leonard described how the country lacked economic diversity, and the natural resources to develop a strong primary economy: fishing, forestry, mining, refining. The country also, was unfitted for a secondary economy: industry and manufacturing.

The dependence of the country on tourism and financial services, made the economy vulnerable to external shocks.

Leonard gave some important metrics: “financial services and tourism contributed 60% of government revenue, 50% of national income, 70% of GDP, and 55% of employment. Government employed 30% of the country’s workforce.”

This high concentration on two economic cultures made the country and its economy vulnerable to external events such as natural disasters, business cycle gyrations, weather events, global regulatory financial changes, and price fluctuations. The economy was imbalanced.

In order to protect the country from these vulnerabilities Leonard offered his vision of an economy that had to be TRANSFORMED and DIVERSIFIED.

In order to achieve that vision Leonard gave a mission: Government needed to create a, “balanced, broad based, diversified economy, over a wide range of economic sectors.”

Leonard stated that poor economic diversification led to low productivity and a lack of competitiveness. This in turn led to inefficiency and slow economic growth.

The present economic model is taking away from the other potential sectors that could also generate job growth such as agriculture, and the maritime industry.

Leonard stated his main idea on how to transform the economy to make it less vulnerable. The vision of a diverse economy required a mission for government that would be to “expand the economy into undeveloped sectors: fishing, farming, light industry and manufacturing.

However, the writer asserted that, “the best opportunity for the country to diversify given its small size and lack of natural resources, would be to build a knowledge based economy.”

Singapore was offered as the model to benchmark. Education was the key component to building a knowledge based economy.

Leonard described how Government played a vital role in diversifying the economy through: providing the regulatory framework to support economic activity, creating a foreign investment attractive environment, and building an enabling environment.

Leonard’s vision for the future placed education at the center of the country’s social economy. This Old Boy will add that education, both technical and academic, is the only way the economy will achieve transformation through diversification.

Now, in asserting that the knowledge economy is the way to go, there is a caveat. A knowledge economy is driven by an advanced science and math education model. A knowledge economy is furthermore multilingual. A Knowledge economy wedded to productivity is capable of converting scientific know how into innovation and creativity in the workplace: the Asian economic model. The knowledge economy is capable of efficiently creating the products and services demanded by the contemporary global consumer.

However, a knowledge economy is undergirded by a highly supportive government that puts in place the type of modern social and economic infrastructure that can support 21st Century technological innovation.

This Old Boy cannot see any type of institutional or social framework in the Virgin Islands that could establish and foster the knowledge based economy, presently.

That may change when the country possesses a major university and research institute, linked to private enterprise. The local college appears to have that as its vision.

Additionally, the local workforce will have to be transformed into the type of animal that can man and manage a scientifically oriented economy, in all its various dimensions.

A knowledge economy possesses the type of research and development culture that churns out the minds, ideas, and products that propel countries to the forefront of commercial, technological, and scientific innovation. The country is not there presently.

The vision of a knowledge driven economy is achievable, however. To get there will require years of visionary and effective leadership, add national sacrifice. Whether the country is ready for that, time will tell.

To be continued

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3 Responses to “The Edgar Leonard Vision of a better Virgin Islands”

  • ccc (25/10/2014, 10:00) Like (0) Dislike (0) Reply
    What can i say?
  • cay (26/10/2014, 13:17) Like (0) Dislike (2) Reply
  • @Cay (26/10/2014, 15:44) Like (2) Dislike (0) Reply
    If you are a Virgin Islander or a VI resident, it is this type of attitude that is stagnating the VI growth and development. If all we want to read about if we read at all is gossip and nonsense, the VI is doomed to being a little sleepy hollow again. Do you want the VI to be relegated to a bird sanctuary again? Do you think education and economic diversification? And if no the VI is a ship adrift and headed for the reef and will splinter into many pieces. It is only when this happens that we will wake up from our sleepy. Do we need a rude awakening to chose the right path? Why head off the cliff when it can be avoided by taking prudent action? Food for thought!

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