BEYOND GLOBALISATION:THE BRITISH VIRGIN ISLNADS' CONTRIBUTION TO THE GLOBAL PROSPERITY IN AN UNCERTAIN WORLD

According to the Greek philosopher Heraclitus, “There is nothing permanent except change.” Some two thousand five hundred years later the veracity of that observation remains unshaken. This year bears witness to change on a worldwide scale; a transformation that is poised to reshape global trade and much of the infrastructure that underpins its operation.

All around us, geopolitical tensions, the rise of crypto and digital currencies, revised global allegiances, a growing awareness of the need for sustainability and the aftershock of the pandemic are at work, reshaping old certainties and fashioning new routes for international commerce. What will emerge at the end of this process is unclear, although what is certain is the post-cold war order that has dominated global trade for 30 years has ended and we are entering a new chapter for the world economy.

In 2023, BVI Finance and Pragmatix Consultancy released a new report ‘Beyond Globalisation: The British Virgin Islands contribution to global prosperity in an uncertain world’ exploring what this next chapter for globalisation will entail and the continued role of the BVI business and finance centre in facilitating global growth and prosperity in this fast-changing landscape.

The report spells out in detail three likely scenarios that may emerge over the coming years. The first scenario sees a weakening in internationalism and a slowdown of globalisation but no overall change in direction. The second, the rise of the bloc economy, sees the continued economic and regulatory integration of nations within predominately geographical blocs, but with the blocs becoming more divergent from each other. The final scenario sees the development of a new economic nationalism, which will see larger nations become increasingly protectionist and anti-internationalist.

All three options present opportunities and challenges for the global economy, with the latter two scenarios re-shaping supply chains, trade, and international investment.

AN ESTABLISHED INTERMEDIARY

Over the last 30 years, the BVI’s international business and finance centre has acted as a vital cog in the global economy, banking a wide range of experience that will help it aid the continuity of cross-border investments and transactions during this new chapter.

The BVI’s contribution to global prosperity was highlighted in the Beyond Globalisation report, which found that investment mediated through BVI Business Companies has been hugely beneficial for the global economy, facilitating $1.4 trillion in cross-border trade and investment, equivalent to 1.5 per cent of global GDP, and supporting around 2.3 million jobs, globally.

Whichever scenario eventually comes to fruition, the need for neutral investment intermediaries will continue. As cross-border transactions become more complex and fraught with political tensions, the offshore expertise and neutrality of IFCs - in particular the wide range of financial and professional services available in the BVI - will remain an important offshore intermediary at the heart of international trade due to their neutrality, agility, and ability to adapt.

...investment mediated through BVI Business Companies has been hugely beneficial for the global economy, facilitating $1.4 trillion in cross-border trade and investment, equivalent to 1.5 per cent of global GDP, and supporting around 2.3 million jobs, globally.

SUSTAINABLE INVESTMENTS

There are new agents of change at work, too; forces that are changing global business in unexpected and exciting ways. For example, sustainable investments and related ESG funds are an area of encouraging growth. The value of the global sustainable fund market is predicted to grow to be nearly 50 fold by the end of the decade and the BVI is perfectly positioned to optimise this potential, already having the right frameworks in place to facilitate investment.

The digital revolution has also transformed the global landscape. For example, the Beyond Globalisation report found that the addressable market of digital assets is expected to be worth between US$8 trillion and US$13 trillion by 2030, and the BVI is fast becoming a renowned leader in the space.

The BVI is well-placed to take this leading role as it has the required financial and professional services expertise to cater for the entire life cycle of a company, making it well suited to serve new and developing markets. Additionally, digital assets are increasingly non-geographical, which makes sense for a taxneutral jurisdiction like the BVI to serve as a neutral and secure location for companies to operate in.

The increasing focus on ESG finance and digital assets demonstrate how the BVI is able to be proactive, as well as reactive, in the shifting global financial landscape, and is ready to embrace the opportunities that are arising.

A GLOBALLY RESPECTED CENTRE FOR BUSINESS AND FINANCE

Change may always be with us but the BVI is well-positioned to respond to the risks and uncertainties. As a globally respected international business and finance centre with a proven track record of successfully facilitating global trade, finance and investment, the BVI will remain a reliable and trusted partner that helps its clients manage their cross-border activities, contributing to jobs, trade and global prosperity.