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STATEMENT BY PREMIER AND MINISTER FOR FINANCE DR. THE HONOURABLE D. ORLANDO SMITH, OBE JOINT PRESS CONFERENCE AND SIGNING OF PROTOCOLS FOR EFFECTIVE FINANCIAL MANAGEMENT FORGING AHEAD IN THE NEW DIRECTION PREMIER CONFERENCE ROOM MONDAY, 23RD April 2012 12:15 p.m. Minister for Overseas Territory Mr. Henry Bellingham, MP His Excellency the Governor Boyd McCleary, CMG, CVO Ministers of Government Government Backbenchers Deputy Governor Mrs. Inez V. Archibald Financial Secretary Mr. Neil Smith Permanent Secretaries Chairman BVI Tourist Board Mr. Russell Harrigan Members of the Press Ladies and Gentlemen, Let me take this opportunity to formally welcome Mr. Bellingham, MP to our beautiful shores. I say „formally‟ as I was honored and pleased to accompany him to our sister island of Virgin Gorda yesterday to not only experience its beauty and charm but to get a better appreciation of multi island living - BVI style. I am very pleased that Mr. Bellingham accepted my invitation extended last November to visit the BVI at this time as today is a very significant day in the evolution of the partnership between the Virgin Islands and the United Kingdom. In a few minutes we will sign the Protocols for Effective Financial Management, signaling a commitment from the Government and people of the Virgin Islands to management our fiscal resources in a more transparent and efficient manner, and in turn the United Kingdom‟s commitment to support us in this effort. I am grateful to Mr. Steve Johnson and his colleagues Naomi Jeffries of HM Treasury for agreeing to travel to the BVI in February so that we could sit down and hammer out an agreement that was mutually acceptable to both sides. Perhaps most importantly I 1|Page


am grateful to my Ministers here who supported me in the ensuing negotiations with the Treasury representatives so that today we have an agreement that embodies the selfsufficiency and autonomy which we as a people have always held to so dearly. Indeed since 1976 when we ceased to need grant – in - aid and were therefore were fully responsible for our budget we have guarded that autonomy jealously. The possibility of a deviation from this was one of considerable concern to this entire Territory. To put this all in some perspective: in 2010 HMG came to the conclusion that the Borrowing Guidelines signed in 2005 were inadequate to provide them with assurance of this Territory‟s fiscal accountability. . The UK government, facing its own fiscal challenges and recognizing the very real threat of unaffordable contingent liabilities, decided to partner with several overseas territories to produce an arrangement to minimize this threat. After some consultations, a proposal for a new commitment was presented to the then Administration in 2011 that encompassed methods of international best practice in governance, fiscal and economic planning and risk management. Some of the measures contained therein compensated for perceived weaknesses in our current financial management system that we ourselves should have eliminated. More worrying to my colleagues and I when we took office last year, was the fact that had the previous administration carried through the Financial Management Reform Initiative crafted by our administration in 2004 to its conclusion, the need for these proposals by HMG would not have arisen. At that time we recognized the deficiencies in our financial systems, our data collection and analysis, as well as in our management practices. We promised you the people then that we would improve the status quo and as a result sought to improve these systems so that you might be better able to participate in the development of the future of this Territory. Although our efforts were overtaken by a change in Administration, I am today happy to state that signing these protocols mean that my colleagues and I are back on the path towards the responsible management of our fiscal affairs. We have chosen active participation in the decision making process for you the people of this territory and accountability for our actions to you as elected officials. Ladies and gentlemen I do firmly share the view voiced by a former UK prime minister that: “It is not an arrogant government that chooses priorities; it's an irresponsible government that fails to choose.”

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This Government is fully committed to accountability, transparency and information based decision making. The protocols which we are about to formalize by signature this morning are indicative of our determination to adhere to five important principles viz: 1. 2. 3. 4. 5.

Fiscal and economic planning Transparency Decision making based on quantitative data and analysis. Value for money. Proactive Risk management.

As we have already demonstrated since our assumption of office in November last year, no longer will it be the norm to make black box or purely partisan decisions on the future of the Territory, but instead that our ideas will be presented to you on the basis of research, analysis and supporting documentation. Todayâ€&#x;s signing is indicative of our unequivocal commitment to doing this. Unlike the previous administrationâ€&#x;s paralysis in forging ahead to adopt the fundamental principles of good governance that formed the basis of the Framework for Fiscal Responsibility presented to them out of a necessity to ensure that proper governance reigns supreme in this Territory, my colleagues and I indicated our own commitment to these principles and dialogued with the UK government to formulate a new agreement that is sensitive to our own unique circumstances; The Protocols for Effective Financial Management will be complemented by a strengthened Public Finance Management law to be drafted and presented to the House of Assembly later this year. In these protocols, one will find the very sound principles of Medium Term Planning, Transparency, Decision making based on accurate quantitative data and analysis, Value for money guarantees and Proactive Risk management as its core principles. In these protocols, one will not find a requirement to send our budget to the UK for approval, nor will one find the heavy intrusive heavy hand of a concerned big brother, but instead will find a commitment by the Virgin Islands to manage itself responsibly, and a United Kingdom Government, who now recognizes that the people of this Territory can and will, if given the opportunity, take care of themselves responsibly. I believe that today, by the signature of this document, the Minister and HMG which he represents, has demonstrated renewed confidence in this Territory.

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A new direction is being forged ladies and gentlemen; a dramatic change. One that signals a departure from the old ways of partisanship towards a partnership that is based on mutual respect and the shared value of doing what is in the best interest of our people. My colleagues and I have but one goal in advancing this partnership between the UK and the Virgin Islands. This goal proposes that each side will always consider the position of the other and that we will move ahead on one accord, recognizing that though we may have different circumstances, as a unit we can build off of of each otherâ€&#x;s strengths to form a mutually beneficial solution and destiny. Ladies and gentlemen, thank you for taking the time to share in this significant occasion with us, and may God Bless you all.

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Premier's Protocol Statement