British Virgin Islands

Saturday, Apr 17, 2021

Hon Penn blasted for suggesting VI take £300M UK Loan Guarantee

Hon Penn blasted for suggesting VI take £300M UK Loan Guarantee

Leader of the Opposition Hon Marlon A. Penn (R8) has come under fire for suggesting that the Virgin Islands (VI) should have taken the £300M loan guarantee offered by the United Kingdom (UK), even as the Fahie administration has repeatedly said the loan came with conditions that could have adversely affected the territory.

Hon Penn, in a February 22, 2021, statement accusing the Government of having no plan for COVID-19, said, “There is no plan to finalise the $400m loan guarantee, and might I add - losing access to this money is a dagger to the heart. Imagine where our territory would be if we had that money and leadership that understood how to use it to benefit the territory in the long term,” he said.

Premier and Minister of Finance, Hon Andrew A. Fahie in a statement on the UK Loan Guarantee, released August 17, 2019, said while the loan was welcomed, the demands were far from reasonable.


Skelton-Cline fires back


Social Commentator Claude O. Skelton Cline has since hit back at the Opposition Leader, referring to the argument as problematic, given the valid concerns the VI has about accepting the loan guarantee, and the refusal of the UK to address the concerns in writing.

“I see him refer to, and in fact says that we should have gotten and taken advantage of the loan guarantee offered by the UK, knowing fully well that the Protocols for Effective Financial Management and all of its ancillary instruments… that there were things there that raised more questions than answers answered,” Skelton-Cline remarked.

In addressing one of the ambiguities surrounding the Loan Guarantee, Premier Andrew A. Fahie (R1) in August 2019 said the Protocol for Effective Financial Management signed between the National Democratic Party (NDP) Government and the UK in 2012, stipulates certain financial indicators that must be maintained.

UK refused to address VI concerns in writing - Premier


The Protocols, based on revenues, expenditure, debt and debt servicing were signed before the 2017 Hurricanes, therefore, according to the Premier, it was only fair that certain ratios be readjusted to take into account the VI’s economic reality—post-hurricanes Irma and Maria—given the territory’s lowered earning capacity.

“Unless these ratios are adjusted, or suspended, the Virgin Islands runs the risk of exceeding the levels set and being accused of defaulting on the terms of the [Loan] Guarantee,” Hon Fahie had said.

Premier Fahie said no indication has been given in writing to date that conditions would be relaxed.

He reasoned that had the territory agree to the loan guarantee, the COVID-19 pandemic would have adversely affected VI’s ability to meet the loan stipulations.

Senior opposition Legislator Hon Julian Fraser RA, speaking at a public meeting at St Mary’s Church Hall on Virgin Gorda, on March 7, 2018, said that should the VI take the loan with the conditions, the territory could become the victim of countries and institutions whose agenda is to enrich themselves while making other countries heavily indebted and ultimately getting the upper hand over those countries’ government and economy.


Pandemic would have impacted loan conditions


According to Skelton-Cline, “Were we to have gone under… and draw down from that, we would have been up the creek now without a paddle because diminishing revenues, tourism flat on its back, financial services under continuous attack by the same UK and other European countries and yet Honourable Penn is here trying to suggest now we should have taken this loan?”

Senior Opposition Legislator Hon Julian Fraser RA, speaking at a public meeting at St Mary’s Church Hall on Virgin Gorda, on March 7, 2018, said that should the VI take the loan with the current conditions, the territory could become the victim of countries and institutions whose agenda is to enrich themselves while making other countries heavily indebted and ultimately getting the upper hand over those countries’ government and economy.

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