Our community has endured withering experiences these past ten-plus years: the recession of 2008, hurricanes in 2017 and now the Covid epidemic. These occurrences test our resilience. Difficult times, however, require steady leadership along with informed and thoughtful responses and decisive action. What lies ahead is ours to determine.
We stand on a stark landscape. Fortunately today there are green shoots that can revitalize that landscape.
Substantial federal assistance is available to help rebuild critical infrastructure and to navigate the economic dislocation. Before the pandemic is behind us there may yet be additional dollars from a fourth federal stimulus package to fund major infrastructure. The hope is that federal government spending will help get America back to work.
This surprising level of federal assistance goes beyond just rebuilding and recovery. Deployed correctly it can stimulate local business formation, ownership and economic diversification.
For the Virgin Islands, the ability to leverage these dollars to achieve those objectives requires changing the existing paradigm.
First, there is the need to know the full extent of the resources available. Second is the need to qualify for and then secure those funds. Third, plans, systems and best practices need to exist, which ensure that funding when available, is used appropriately and with accountability.
Specific to hurricane recovery, there may be uncertainty around exactly what percentage of the $5 billion of Public Assistance spending FEMA plans to make available to the Virgin Islands will actually materialize. Whatever that amount is, however, it is substantially more than we would have available were it not for the support of the federal government.
In the case of pandemic support, an unprecedented $2 trillion of stimulus spending will make hundreds of billions of dollars available to local communities and businesses across the United States. The Virgin Islands should be aggressive in seeking to a share of these dollars for government agencies, community organizations and businesses. In the latter instance partnering or seeking to attract companies to the Territory who qualify for this funding should be a high priority.
The Federal government seeks to reduce the possibility that the national medical systems and local communities will again be as unprepared in successive pandemics.
Can the Virgin Islands obtain some of the funding for manufacturing, service delivery and capacity development? Doing so will contribute to diversifying and growing our local economy, strengthen health and educational services and increase local government revenues that can then be used to help address other chronic local financial challenges.
An approach for achieving this is to offer targeted incentives, provide business and organization support, and structure partnerships to secure available funding. Where we lack indigenous capacity, we can promote new business formation as well as incentivize business relocation. Success will not only expand the economy and grow local government revenue but it will afford economic resilience to future downturns.
These dollars, if made available, can leverage external private investment for new business formation and add footings to the local economic stool that has supported the Virgin Islands economy for the past forty years. Access to these dollars can strengthen and expand our educational and health care institutions insuring a long-term improvement in service delivery to residents.
The Territory has critical needs that cannot be addressed by these monies. However, by expanding the economy and increasing revenue flow, these challenges can be chipped away.
Only by having development strategies in place will the potential these funds make possible be realized. It can happen if we exercise forethought, are financially and economically disciplined and if we have strong leadership.
As a community we have the ability to set a path forward and pursue it. Others have implemented successful development strategies which we can replicate. We can adapt these and in doing so package our resources in a manner that achieves success.
We have had other opportunities before though possibly none of the magnitude and breadth as now exists.
Insanity, as Jane Fulton said in the 1983 novel Sudden Death, is doing the same thing over and over again, but expecting a different result.
Isn’t this the time to try to do things differently?
Submitted on Monday by: Justin Moorhead, Managing Director, Virgin Islands Capital Resources, Inc.