Government & Economy

Government: A nearly self-contained community, the islands are a Crown Colony with a Governor appointed by London, although to a large extent they are internally self-governing. The Governor (Frank Savage, appointed 1998) presides over the Executive Council, made up of the Chief Minister, the Attorney General and three other ministers. A Legislative Council comprises 13 members elected by universal adult suffrage (of which nine represent district constituencies and four represent the whole territory), one member appointed by the Governor, a Speaker elected from outside by members of the Council, and the Attorney General as an ex-officio member.

Economy: The economy is based predominantly on tourism; the islands offer up-market tourism in quiet, unspoiled surroundings and earnings are around US$150 mn a year. There are approximately 1,300 hotel rooms, half of which are on Tortola and a third on Virgin Gorda, the rest being scattered around the other islands, but nearly half of those visitors who stay on the islands charter yachts and only sleep on land for their arrival and departure nights.

Tourism in the BVI was hit badly by the recession in 1991. A new charter yacht strategy was announced in 1992, removing import duty and introducing licences to encourage more business. The Government aimed to attract quality operators in a more highly structured environment with streamlined entry regulations. Crewed yachts have been pushed rather than increasing bare boat charters. In another development to promote the islands, the British Virgin Islands Film Commission was set up to encourage film production in the islands and the previous permit fee was lifted. In 1996 commissions on shoots rose to US$1 mn from US$0.4 mn in 1995. Film crews were expected to bring considerable economic benefit through their use of local services and labour.

Since 1991 the tourism industry has shown improvement, particularly in the numbers of cruise ships calling. A new US$6.9 mn, 550-ft cruise ship pier was inaugurated at Road Town, Tortola, which can accommodate two medium-size cruise liners. The Government is aiming to attract the upper end of the cruise market and not to encourage the very large ships. Tourist arrivals and earnings are now growing steadily at about 4-5% a year.

The new industries of recent years are business and shipping, which have benefited from uncertainty in Hong Kong and Panama. International Business Company legislation passed in 1984 allows locally registered foreign companies tax exemptions with little currency risk, as the US dollar is the national currency. By the end of 1997over 250,000 companies had been registered as IBCs (of which about 35,000 had transferred from Hong Kong when it was returned to China) and fees from new licences generated substantial revenues. In 1997 licence fees for banks and trust companies were doubled to US$20,000 a year. Diversification of the offshore financial centre is being sought; currently over one third of government revenue comes from this sector. In 1994 the Legislative Council passed an insurance law, designed to regulate all insurance business in the BVI including captive insurance and reinsurance. New legislation to cover mutual funds was approved in 1996. The Act came into force at the beginning of 1998 and during its first year 1,700 licence applications were processed. In 1996 the number of registered ships and yachts increased from 596 to 693. A register for mega yachts is planned.

Industry on the islands is limited to small-scale operations such as rum, sand or gravel, and desalination plants are being built. Farming is limited to fruit, vegetables and some livestock, some of which are shipped to the USVI. Fishing is expanding both for export, sport and domestic consumption. However, nearly all the islands? Needs are imported.

Although the budget is in surplus, the Government is still receiving British capital assistance, as well as funding from the EC, the Caribbean Development Bank and the Commonwealth Development Corporation. Loans have also been raised from commercial banks. The British government is now curtailing its capital funding and other sources of foreign finance are being explored.

Neighboring islands:
South and West: US Virgin Islands
West: Puerto Rico (USA)
East: Anguilla.
Time:
Greenwich Mean Time less 4 hours.
Climate:
sub-tropical rather than tropical; trade winds moderate extremes of both heat and humidity;
temperature ranges: winter 22 degrees to 28 degrees Celsius; summer 26 degrees to 31
degrees Celsius; night temperatures drop to 10 degrees Celsius; and, erratic rainfall averaging
127 centimetres per year; occasional droughts.
Status:
Crown colony.
Capital:
Road Town, on Tortola Island (estimated population 2,500).
Other main towns:
East End; West End and, Long Look.
Population:
16,748 increasing by 1.7 per cent per year; and, infant mortality rate 29 per 1,000 live births.
Main language:
English.
Main religion:
Christianity.
Currency:
US dollar in use.
Exports:
fish, rum, sand and gravel, fruits and vegetables.
Imports:
foodstuffs, building materials, machinery and equipment, motor cars, beverages.
Main industries:
fishing, rum distilling, and construction. Economy based on tourist and financial services.
Tourism:
the major economic activity, accounting for some 75 per cent of GDP; approximately 290,000 visitors per year.
Festivals: The BVI Summer Festival is held over two weeks at the end of July and beginning of August. There is entertainment every night with steel bands, fungi and calypso music, a Prince and Princess show and a calypso show. During the year there are many regattas, such as the annual BVI Spring Regatta in April, Foxy抯 Wooden Boat Regatta in September and windsurfing events, which attract many extracurricular activities and lots of parties.