Said Gov’t relying on financial services industry now more than ever due to COVID-19
One of the Territory’s major revenue earners, the financial services industry has been resilient and robust during the ongoing coronavirus pandemic; however, Chief Executive Officer of BVI Finance, Ms Elise Donovan said the local industry must not get comfortable but continue to be vigilant and proactive.
“We are still very much dependant on what is happening in the global economy, so it is not all a glory story, we have to be cautious and understand that is happening in the globe will affect us all,” Ms Donovan said while a guest on JTV’s Big Story with Cathy O. Richards on July 15, 2020.
Business continued in the financial services industry throughout the lockdown period as companies made maximum use of virtual platforms as it did during the period of hurricanes Irma and Maria in 2017.
And as the pandemic rages on, and with predicted second waves, there is a continued impact on businesses globally.
According to Ms Donovan, there are also opportunities in the crisis.
Among the opportunities, according to Ms Donovan, based on recent studies conducted by an independent body, there is a need in the Hong Kong market for the services that exist in the Virgin Islands.
“One of the things that they are looking for is in terms of risk mitigation as well as securing their assets and these are the specialities of the international financial centres like the BVI.
“We provide that security, we provide safety, we provide reliability, we provide trust and confidence that, the Asian institutional investor, the Asian high net worth investor, the Asian corporates are looking for.”
And, according to Ms Donovan, because the Asian market was first into the pandemic they will be the first out.
She said the VI has a thirty-year relationship with places like China, which represents approximately 35% of the VI’s share of financial services companies.
“So we are seeing that market is going to rebound faster because it went in first [and] it is going to come out first.”
Financial Services shouldering the weight
Meanwhile, financial services and tourism were seen as the two main economic pillars of the VI prior to the COVID-19 era. Financial services also accounts for 60 cents of every dollar of Government revenues.
Two in ten jobs come from the financial services industry as opposed to tourism, which represents one in every four jobs for the economy.
“So certainly as far the wider GDP is concerned tourism is more impactful. You have seen that on the ground. You create more businesses, more jobs and more interaction for a wider cross-section of the BVI community.”
As it relates to financing government, Ms Donovan said, “But as far as government revenues are concerned over 60% of the government’s revenues actually come from Financial Services industries.”
Because of the lull brought on by the COVID-19 pandemic and the hit it has on the tourism sector; however, the government will now lean even more on financial services, according to Ms Donovan.
“Government’s revenues are probably more reliant on the financial services industry and we have seen the robustness and the resilience on that financial services industry continue,” said Ms Donovan.