A very interesting blog post and subsequent discussion are on BVIPlatinum.com now. The original post, written by Benito Wheatley, Program Board Associate at the Institute of Caribbean Studies in Washington, DC, asks the question, ‘Have Tourism and Financial Services Failed the BVI?’

Mr. Wheatley begins with an examination of the ‘twin pillars economic strategy.’ ‘Fiscal year 2009 has started off on a less than optimistic note for the British Virgin Islands (BVI). In the tourism sector, industry reports estimate that tourist arrivals are down 15 to 20 percent in the first quarter and present a bleak forecast for the remainder of the year. In the financial services sector, data indicates that by the end of 2008 new international business company incorporations were down 20 percent, presumably on uncertainty about the future of the financial industry. What these trends indicate is that the BVI is beginning to feel the negative effects of the global economic crisis, as the economies of its major tourism markets in the United States (US) and Europe enter into recessions and the global financial crisis prompts calls by international leaders for financial reform, including enhanced regulatory oversight and scrutiny of offshore financial centers. These developments have created unfavorable global economic and financial conditions for tourism and financial services industries in the BVI.’

He continues, ‘The nature of the current crises has limited the government and private sectors’ abilities to adjust the Territory’s economic position in the short-term or scale back the impending economic downturn that is beginning to take effect. In the interim, the private sector will have to make painful cutbacks, while the government considers stimulus measures to help propel the economy along during what is expected to be an economically challenging fiscal year. The deteriorating economic situation raises important questions about the viability of the BVI’s economy and the durability of the twin pillars economic strategy pursued by BVI governments since the early 1980s: Is the BVI’s twin pillars (i.e. tourism and financial services) economic strategy sufficient to sustain economic growth? Are third, fourth and even fifth economic pillars necessary to ensure the Territory’s economic survival? What other sectors and industries should be developed in the interest of economic security? The answer to these questions and how the society’s leadership responds to today’s harsh international climate will largely determine the economic future of the BVI.’ Wheatley then makes the case for economic diversification in the BVI, especially into the back-office services, or knowledge-based services, like India has done.

The comments posted to his blog pose some thoughtful questions of their own, and certainly give insight into local thinking. If you are concerned about the economic future of BVI, read the post and comment yourself if you choose. Also contact a Coldwell Banker BVI agent to discuss real estate opportunities specifically. We are still very optimistic about the real estate market here in the British Virgin Islands.