Development Planning Unit, Government of the British Virgin Islands

TABLE OF CONTENTS
EXECUTIVE SUMMARY
1.	INTRODUCTION
1.1	The Planning Experience
1.2	New Imperatives
1.3	Integrated Development
1.4	Strategic Planning
1.5	The Requirements of Planning
1.6	The National Integrated Development Plan
1.7	Development Objectives/Goals
1.8	Strategic Vision
1.9	Mission
1.10	Contents
2.	THE PLANNING CONTEXT
2.1	Introduction
2.2	Geography
2.3	Constitutional Status
2.4	Population
2.5	Environment
2.6	Economy
2.7	Physical Development
2.8	Physical Infrastructure & Utilities Transportation Electricity Water and Sewerage Telecommunications Postal Service Industrial Estates
2.9	Human & Social Development Education and Training Health Housing Poverty Welfare Youth and Sport Culture
2.10	Employment
2.11	Public Sector & Public Administration
2.12	Development Policy
2.13	Disaster Management
2.14	Globalization & Global Connectiveness
2.15	Science & Technology
3	THE DEVELOPMENT AGENDA AND CHALLENGES
3.1	Overview
3.2	Reducing Vulnerability
3.3	Promoting Sustainability
3.4	Ensuring Environmental Sustainability
3.5	Enhancing Human Resource Development
3.6	Improving Physical Infrastructure & Utility Services
3.7	Improving Physical Development
3.8	Strengthening Institutional Capacity - Public Sector Management & Administration
3.9	Improving Governance
3.10	Maintaining Optimal Population Size
3.11	Maintaining Social Cohesion
3.12	Ensuring Balanced Development
3.13	Globalization & Global Connectiveness
3.14	Economic Management
3.15	Improving Information Technology
3.16	Promoting Science and Technology
4.	POLICY FRAMEWORK
4.1	Overview
4.2	Human Resources Development Education and Training Entrepreneurial Development Health
4.3	Population & Labour
4.4	Environmental Management
4.5	Physical Infrastructure & Utilities
4.6	Physical Development
4.7	National Economic Management
4.8	Social Development & Welfare Social Welfare Housing Recreation and Sports Culture Youth
4.9	Role of the State
4.10	Science and Technology
4.11	Information Technology
5.	IMPLEMENTATION, MONITORING, AND EVALUATION
5.1	Introduction
5.2	Existing Capability
5.3	Proposed Framework
5.4	Monitoring & Evaluation
5.5	Review
5.6	Budgeting
5.7	Data Quality

EXECUTIVE SUMMARY

The National Integrated Development Plan (NIDP) is a major output of the National Integrated Development Strategy (NIDS) that has been adopted by the Government of the British Virgin Islands (GBVI) to promote the sustainable development of the territory over the next five years, 1999 � 2003. The Plan articulates the hopes and aspirations of the people by identifying the main development objectives and challenges, and determining the optimal policy framework for promoting development. Its overall aim is to improve the quality of life of the citizens and residents of the territory.

The preparation of this Plan ushers in a new era of development planning in the territory in particular and in the Caribbean in general. Developed against the background of the changed context of planning that focuses on sustainable development and influenced by elements of the new world order such as competitiveness, global competitiveness and an open trade regime, it is based on an integrated approach to planning. This approach takes into account more than the traditional socio-economic parameters, giving equal and simultaneous consideration to all facets of development including the environmental, physical and spatial, which have been discerned through a participatory process and strategic analysis.

The hopes and aspirations of the people are captured in the development objectives that have been identified as:

The pursuit of these goals for a better quality of life is guided by a strategic vision of a society that is globally competitive and socially cohesive; that is able to satisfy the basic needs of its people; that upholds the principles of equity, human rights and good governance; that manages the natural resources of the territory in a sustained and integrated way; that generates self-confidence among the people; and that maintains the unique cultural identity of the territory. In order to facilitate this vision, the primary mission of the Government is to mobilize and deliver resources to ensure the health, productivity, prosperity, cohesiveness and resilience of the people in a responsible and integrated manner.

The planning context depicts a society that, despite two decades of steady social and economic progress remains inherently vulnerable to internal and external circumstances. Significant economic growth and physical development have taken place over the past two decades and there have been considerable improvements in human and social development, environmental management and disaster management and preparedness, as well public sector management. Yet, threats arise form the small size, difficult topography and fragile environment of the territory, its constitutional status as a United Kingdom Overseas Territory, its population with a high proportion of immigrants, an economy that remains open and dominated by two export service industries, physical development that is largely unplanned, a physical and social infrastructure that needs updating and expanding, as well as the inadequate science and technology infrastructure.

The central issue on the development agenda therefore, is the reduction of the overall vulnerability of the territory. In order to achieve this however, there are other challenges to overcome. These include promoting sustainability in general and environmental sustainability in particular, enhancing human resource development, improving physical development and the physical infrastructure, strengthening institutional capacity and improving governance, maintaining the optimal population size and social cohesion, ensuring balanced development, sustaining economic growth, creating the environment for successful globalization and global connectiveness and improving the infrastructure for science and technology.

To support and sustain the development process, it is essential to meet these challenges through an integrated policy agenda. The Government will continue its pursuit of good governance and the promotion of social stability, as well as the efficient management of the economy and the environment to provide the conditions conducive to integrated development. The promotion of a balanced, resilient and internationally competitive economy remains paramount so as to provide a stronger foundation or the attainment of sustainable development. The policy thrust of the Plan is to enhance the overall development potential by human resource development, improved management of the environment and physical space, and sound economic management. The broad policy framework in key areas is presented hereunder.

Human Resource Development

The policy goal for human resource development is the improvement of the human condition by education and training and health. There will be a deepening and widening of the education system to make it more responsive to the needs of the society through its content and delivery systems. Expanded physical facilities at all levels and the use of information technology in distance learning will improve access and coverage by age and sector of the population. The philosophy of health care will show an increased focus on sustained health promotion that encourages individuals to be responsible for their own good health. Improved physical facilities will be supported by better quality service particularly in the area of primary health care. In order to mitigate the impact of public sector health expenditure of the national budget and to cushion the overall impact of health expenditure on individuals, the feasibility of a National Health Insurance Scheme will be examined.

Population and Labour

A pro-active strategy that will take into account the population dynamics of the territory will be adopted. The major policy objective will be to decelerate the rate of growth without affecting adversely the development effort. A key feature therefore will be the immigration policy, which will be based on the results of manpower planning and modified to bring it in line with the realities of social life and globalization.

Environmental Management

Environmental management will be accorded greater priority in the development of the territory. A more effective and efficient environmental management strategy will be pursued. The major elements will comprise:

To achieve these policy goals, a restructured and strengthened environmental management agency will be established. This agency will be responsible for all matters relating to the environment. Among the initial tasks of that agency will be the development of a National Environment Policy and a National Environment Action Plan.

Physical Development and Infrastructure

The critical component of the physical development strategy is the adoption and implementation of the draft physical development plan to reduce conflict among land uses and to ensure the optimal and sustainable use of land. With regard to infrastructure, the overall policy is aimed at improving the quality and efficiency in all areas through a number of specific projects. Efforts will be made during the Plan period to improve the management and maintenance of the facilities and promote greater cost recovery. Improvements in physical development and the provision of infrastructure will be means for promoting the balanced development in the territory.

Economic Management

Sound economic management will continue to be a pillar of the integrated effort to reduce the vulnerability of the territory. The main strategic goals include:

Within the productive sector in particular, policies will be introduced to expand and upgrade the range of products and services that are provided by the two leading industries; to maintain their international competitiveness; and to diversify the production base especially by promoting those activities that create economic linkages between sectors.

Prudent fiscal management will be pursued by stimulating savings through the generation of a surplus of recurrent revenue over expenditure to assist in the financing of the necessary public sector investment. Specific instruments will also be introduced to promote a higher level of savings among individuals, as well as in the private sector.

The promotion of local entrepreneurship is also an important policy goal. This will be attained through the provision of training and capital, and special programs to assist the development of small and medium enterprises.

Social Development and Welfare

The focus of the social development and welfare strategy will be on expanding the scope of the program and improving the efficiency of delivery of services. In order to facilitate these improvements, Government will undertake the relevant social surveys to produce a set of reliable and up-to-date socio-economic data and indicators as a basis for policy and program formulation. The expansion of services will include measure to address the specific problems of the youth, sport and recreation and culture.

Science and Technology

Increased efforts will be made towards improving the scientific and technological capability, including the capability in information technology, during the Plan period. Government will make the necessary investment in scientific and technological education and will introduce education and training in these areas at all levels of education and training. The learning will be geared specifically to foster creativity and innovation among the young.

Information technology will play an increasingly greater role in our national development, particularly in improving efficiency, productivity, competitiveness and global connectiveness. During the Plan period, the thrust of information technology will be the formulation of a National Information policy and the establishment of the appropriate National Information Infrastructure in order to create a strong foundation for building a knowledge-based and information-rich society. These will be undertaken with the collaboration of the private sector. This approach will help IT to permeate all sectors and enhance their respective contributions to development through greater operational efficiency.

Within the public sector, the increasing use of IT will be a major objective under the proposed public sector modernization program. Consideration will be given to the establishment of a National Information Systems Center within the public service, which is the repository of significant information. This will facilitate the establishment and linking of Management Information Systems in a number of different areas such as economics, finance, trade, health and environment. These will be linked to existing systems such as the GIS and statistics.

The Role of the State

The state will continue to play a central role in the development process. A high performing public sector is a prerequisite for sustainable development. During the Plan period, there will be an evaluation of the role of government and the necessary strengthening of agencies to enable them to perform their tasks more efficiently. A public sector development program will be initiated and greater efficiency will be effect through measures that affect:

1. INTRODUCTION

1.1 The Planning Experience

The formal process of national management and planning of the development of the British Virgin Islands (BVI) was initiated under the auspices of the United Nations (UN) in the 1970s. The first step was the establishment of the Economic and Physical Planning Units in the Office of the Chief Minister, the Development Planning Unit (DPU), and the Town and Country Planning Division (TCPD). Thereafter, the planning of the development of the territory was characterized by a series of disparate efforts that have employed neither the multi-sector nor integrated approach to planning, or resulted in the production of a major planning document. So far, however, these efforts have been driven neither by the circumstances of structural adjustment nor externally imposed policy prescriptions.

The limitations notwithstanding, a particular mode of national management in the territory has evolved from our internal efforts. In the main, it has been articulated through:

In addition, development in the BVI was also influenced significantly by large foreign private sector projects such as hotel and marina construction. More recently, a number of important initiatives have been taken in respect of sustainable development.

These earlier efforts in particular focused on economic growth and coincided with a period of rapid and sustained economic expansion in the 1980s and 1990s. This resulted in significant improvements in education, health, and the general social well-being of the population. This result, however, has masked the limitations of our approach to planning and national management.

1.2 New Imperatives

We live in a fast changing world. This means that we have less time to anticipate and prepare fully for change. This situation can lead to two extreme attitudes to the future. Overwhelmed by complexity, uncertainty, and difficulty in anticipating the future, we may take a passive attitude, accepting whatever comes to us. This is unlikely and unrealistic. On the other hand, we can adopt a proactive and interventionist attitude � more realistic and practical � seeking to create the future we desire. These two positions represent views of the future as destiny or opportunity. Planning makes the difference between the two. This plan therefore, is concerned with the problems and approaches associated with exploring the future as opportunity for the realization of desired goals.
But, even in the realm of planning, conditions are changing. The very context of planning has changed, and everywhere the requirements of national management are greater. In the keynote address to the 9th Annual World Bank Conference on Development Economics, the Bank�s Chief Economist commented, �Earlier, development was seen as simply increasing Gross Domestic product (GDP). Today, we have a broader set of objectives in mind: we focus on democratic development, on sustainable development, and on increases in living standards.� He suggested that there is more to living standards than is typically captured in GDP accounting, that in the struggle to increase GDP there is, inter alia, simultaneous environmental degradation. Elements of the New World order such as competitiveness, global connectiveness, and an open trade regime are also important considerations in the formulation of this plan.

In a similar vein, successive Human Development Reports of the UN suggest broader development policy considerations. Those reports indicate that the link between economic growth and human progress is not automatic. While growth accompanied by reasonably equitable distribution of income is generally the most effective path to sustainable development of the kind that we are pursuing, there are instances in which countries can and have achieved significant improvements in the human condition through well-structured and effective public expenditures, in the absence of satisfactory economic growth or a relatively even distribution of income. Both situations suggest that issues of equity and governance are as essential conditions for development as economic growth, and these will inform this plan.

1.3 Integrated Development

The Integrated Approach to Development Planning seeks to offer an alternative to the traditional systems of planning that focused on economic and/or social planning and, as a consequence, did not promote sustainable development effectively. Within the Integrated Development Planning context, the approach to planning includes not only the traditional socioeconomic parameters but also is broadened to include environmental, physical, and spatial considerations. A development plan prepared within this framework is neither economic nor physical. Rather, it is an integrated plan in which both economic and physical/spatial aspects are incorporated, in addition to environmental and social factors. Our plan will be structured along these lines.

The strategies that flow from this approach reinforce sustainability. One of their primary goals is to meet the needs of the present generation without compromising the ability of future generations to meet their own needs. This is ensured best if the present generation does not impose insurmountable debts on the future generation. This �future debt� concept is critical. It goes beyond the protection of natural resources and the physical environment: it includes all forms of debt � financial debt, the debt of human neglect, or the debt of environmental degradation � and is tantamount to borrowing from the next generation. The objective is to limit all these forms of debts. It imposes a responsibility on all governments and people to live, as far as possible, within their means, or alternatively, to exploit/manage the stock of natural resources in such a manner that future generations can benefit from such depletion.

Our integrated approach to development recognizes the growing concern for population and environmental issues including the carrying capacity of the islands, as well as the nature and level of participation by BV islanders in all aspects of national management-alienation. It implies that, after a decade of economic growth, a broader concept of development has evolved. It recognizes that, as the new millennium approaches, governments and people every where are engaging in strategic management, taking stock, assessing where they are, where they want to go, and how they will get there. At the same time here in the BVI, the integrated approach to sustained development and the correctness of policies to promote such development have moved center stage. They constitute the core of this planning effort.

1.4 Strategic Planning

Our planning is based on strategic analysis and positioning that require us to be conscious of the future and all the issues and the associated pitfalls, as well as to deal with interrelated concerns simultaneously rather than sequentially. They require us to evaluate situations, assess options, analyze risks, and make informed choices. The primary objective of this approach is to increase the likelihood of reducing uncertainty and vulnerability to future circumstances that normally are beyond our control. This kind of planning provides the preparation to influence, however small, the outcomes of future events; it is the antithesis of negligence and indifference about the future. As a strategic plan, the National Integrated Development Plan (NIDP) articulates the aspirations and goals for sustainable development, identifies the strategies to achieve those goals, and the measures or activities to achieve the planned strategies.

Planning in general, and strategic planning in particular, are also important tools of national management. They remain major functions of governments to assist them in enhancing their performance and, by extension, the quality of life of the people. It is a major test of the capacity of governments to govern.

1.5 The Requirements of Planning

A number of general requirements are identified for successful planning. These include:

All these requirements remain valid for the integrated approach to planning, which has its own special requirements. These include:

However, by its very nature planning is never perfect; it is always flexible and adaptable to the circumstances in which it is undertaken. Therefore, while this plan does not meet fully all the requirements identified above for successful planning, this does not pose a significant constraint on its effectiveness. The Plan represents a major initiative of a government and people that have a little more than two decades of experience of ministerial government, and a little more than one decade of constitutional responsibility for the financial affairs of the territory. It constitutes a major step along the way to the proper management of the territory and must be evaluated in that context.

1.6 The National Integrated Development Plan

This National Integrated Development Plan therefore, represents the first formal attempt at national planning in the BVI. It covers the five-year period 1999 to 2003. Its objective is rather modest. Its major purpose is to establish the broad strategies, policies, and the implementation framework to promote integrated development. Its overall aim is to improve standards of living and the general welfare of the population.

The Plan identifies the main strategies, charts the policy program, and sets out the policy agenda and the administrative and implementation framework for planning for the next five years. Essentially, it provides the overall framework within which the activities of all the social partners can be coordinated and pursued for the attainment of the ultimate goal of improving the quality of life of the people of the BVI. That this is the ultimate goal should be out of question. At this juncture, it is important to note that though there may be differences about the means to reach that goal, the NIDP constitutes the most effective and efficient mechanism to resolve the differences among those means and arrive at a mutually acceptable approach to the development of the territory.

The document does not represent a comprehensive plan for all the affairs of the territory. The Government recognizes that the process of integrated and sustained development is attained best through the promotion, facilitation, and support of vibrant and enterprising private and non-governmental sectors unfettered by an inhibiting bureaucracy. A main objective of the Plan therefore, is the encouragement of private initiative and support for an enhanced role for the private sector in the development process.

The five-year format has been adopted because it allows a coherent response to the period of change that is facing the territory and the world. This longer planning horizon also recognizes the formulation of a clear policy framework with which to guide programs. The framework itself will be subject to modification if required through a comprehensive mid-term review.

Apart from introducing and emphasizing the concept of integrated development, the NIDP builds on existing policies and strategies to satisfy the development objectives of the society. The Plan gives serious attention to strategies for generating sustainable and rapid economic growth and for ensuring that the benefits of such growth are shared equitably. It addresses the need to balance the desired growth with the protection of the environment and proper physical development. The Plan acknowledges existing social problems and recognizes the emergence of the new problems associated with rapid economic expansion, population growth, and modernization. As a result, it contains strong human development, environmental, and social components, in addition to the normal economic and physical development aspects.

1.7 Development Objectives/Goals

The development objectives capture the collective hopes and aspirations of our people. They represent guidelines for our Strategic Vision as well as for the Mission Statement or purpose of our Government. They also set the boundaries of the strategies and policies that we will develop and implement. These objectives are:

1.8 Strategic Vision

The Strategic Vision of the territory encompasses and reinforces our explicit development objectives. It throws light on what we can be � containing a future focus. It is a shared vision that is informed by four main principles:

The resulting Vision, therefore, is that of:

A society that is globally competitive and socially cohesive; that is able to satisfy the basic needs of its people; that upholds the principles of equity, human rights, and good governance; that manages the natural resources of the territory in a sustained and integrated way; that generates self-confidence among the people; and that maintains the unique cultural identity of the territory.

1.9 Mission

In order to achieve our Strategic Vision, the management of the territory must be managed in a particular and deliberate way. The Mission therefore, represents the purpose of the Government in serving the territory as a whole. In the context of the integrated approach to development, the Mission of the Government is:

To mobilize and deliver resources to ensure the health, productivity, prosperity, cohesiveness, and resilience of the people in a responsible and integrated manner.

1.10 Contents

The document comprises five main sections that are preceded by key statistics of the territory. Section 1 sets out the background and philosophical framework of the plan. Section 2 contains an analysis of the contextual situation of the plan. The main challenges that constitute the development agenda are presented in Section 3. The policy framework that identifies the main strategies for integrated development is articulated in Section 4. This is followed by an elaboration of the administrative framework and guidelines for implementation, monitoring, and evaluation in Section 5. A statistical appendix that contains key data is included.

The Plan should be read in conjunction with the Country Policy Paper (CPP) , the Medium Term Economic Strategy (MTES) , the draft Physical Development Plan and the Public Sector Investment Plan (PSIP) .

2. THE PLANNING CONTEXT

2.1 Introduction

An appreciation of the circumstances in which planning is taking place must inform the type of systematic intervention that constitutes national planning. This section, therefore, represents a situation analysis. It contains analyses of the key situations impacting on the BVI. These allow the essence of the problem to be distilled. In addition, they provide the primary building blocks of the Plan and the foundation for its strategies and policies.

2.2 Geography

The territory of the British Virgin Islands is an archipelago that is comprised of approximately 60 islands, rocks and cays. It is located in the northeastern Caribbean Sea, 60 miles east of Puerto Rico, at the eastern end of the Greater Antilles. The territory has total area of 153 sq. km (59 sq. miles). There are four main islands on which the majority of the population resides:

The territorial sea of the BVI covers an area of 1,489 sq. km (575 sq. miles) and extends 5.6 km from the low water line along the coast. Together, the land and sea areas comprise 1,642 sq. km (634 sq. miles). To this must be added the Exclusive Economic Zone (EEZ), which extends some 200 miles north and northeast of the BVI. The EEZ is a potential source of natural resources, as evidenced by the interest of international oil companies that tested the area about 10 years ago. The EEZ is also rich in marine food products as the world�s largest groups of pelagic fish swim through it annually.

A marked physical characteristic of the topography of the territory is the presence of a large number of distinct valleys. The terrain is relatively rugged and there is a relative scarcity of flat land, most of which is located in the coastal areas. This, together with accessibility to the road network and marine areas and the development of hotel and marina activities in those areas, has influenced significantly the pattern of settlement and land use. Most of the recent physical development is along the coastal low-lying areas, where the highest concentration of population is located. The topography also accounts for the relatively high percentage of undeveloped land. On the most developed and populated island of Tortola, undeveloped land accounts for approximately 73% of the acreage, with the majority of the development in the capital � Road Town, and East End.

2.3 Constitutional Status

The BVI is a British Dependent Territory that attained the ministerial system of internal self-government in 1967. Ten years later in 1977, the territory assumed constitutional responsibility for its internal financial affairs. The BVI receives no budgetary aid from the United Kingdom (UK). There is a unicameral legislature comprising fourteen (14) members, and elections are constitutionally due every 5 years. The UK Government, through an appointed Governor, retains responsibility for external affairs, defense, international representation, law and order, and the public service. The Governor has reserved legislative powers and normally acts on the advice of the Executive Council (the quasi-Cabinet) over which he presides formally, and which comprises the Chief Minister, the Attorney General, and three other ministers. The Governor also appoints as Chief Minister one of the elected members of the legislature.

As in the case of other dependent territories, the UK Foreign and Commonwealth Office is responsible for promoting �good government,� including proper financial regulation, and has oversight responsibility in this area. On the question of increased political autonomy, the general policy of the UK on independence for Dependent Territories is to assess moves in this direction if and when it is the clearly and constitutionally expressed wish of the local people. In the new policy on the relations between the UK and the Overseas Territories , it was stated that none of the Government expressed any desire for full independence and the right of British citizenship has been restored.

2.4 Population

The population of the BVI was estimated at 20,254 in 2000 . The majority, 16,630, is located on Tortola, 3,063 on Virgin Gorda, 204 on Anegada and 176 on Jost Van Dyke. Between 1980 to 1990, the population increased by about 45% from 11,000 to 16,000. The rate of growth has decreased in the 1990s to an average annual increase of about 2%, and the population is projected to double by 2030. Most of the increase (approximately 65%) since 1980 is attributable to net migration inflow. In spite of the rapid growth, there is a relatively low population density that was estimated at 131 per sq. km.

Rapid growth apart, the age distribution of the population continues to change. There is an increasing active (working) segment swollen by substantial immigration. Relatively low return migration accounts for an unusually small proportion of the elderly, while a relatively low average fertility rate accounts for the small percentage of births. The average crude birth and death rates were 16.32 and 4.83 respectively between 1993 and 2000. While the population cannot be characterized as either �youthful� or �aged,� the age profile suggests that the percentage of the old will increase over time, such that eventually the BVI will have an increasingly older population than at present. In 1996, the �young� (< 15 years) represented 27.1% of the population, while the �active segment� (15-64 years) was 67.8% and the �old� a mere 5.2%.

Immigration therefore, is undoubtedly the single most important population factor. Of the population growth experienced between 1992 and 1996, immigration accounted for 55.2%, such that in 1996, 50.3% of the population was immigrants. The following data extracted from the 1991 census shows the impact of immigration:

2.5 Environment

The environment is one of the most important resources of the BVI. Given the limited land and sea areas, the marine and coastal environments are strategic and together constitute a valuable asset. However, like other Small Island Developing States (SIDS) with limited physical space, there is population pressure on the land and marine environments. The territory faces increasing competition for the use of its natural resources, and there are consequent problems of conservation of its biodiversity, freshwater resources, and watershed areas, as well as coastal and marine resources. This is a significant problem because tourism, a critical element of the country�s overall comparative advantage, depends heavily on the natural environment and the adequate management of the fragile ecosystem. The natural features of our territory afford our islands an opportunity to develop a unique ecological tourism product. However, the experiences of other tourist destinations and lessons from the past suggest that environmental protection and tourism development are not always reinforcing and mutually compatible objectives. A similar view is emerging in our territory.

Inadequate physical infrastructure, in particular poor drainage and insufficient solid waste and sewage disposal facilities, also challenges our environment. To this is added the environmental problems associated with unplanned settlements.

Generally, the environment is not managed effectively. This is reflected in:

Most critical is that, to date, our environmental management framework has not developed the capacity to deal effectively with all the concerns. The management function is dispersed among a number of departments including the Department of Agriculture, National Parks Trust, Conservation and Fisheries Department, and Town and Country Planning Department. The Conservation and Fisheries Department has the primary responsibility for environmental matters including environmental planning and monitoring, fisheries management, coastal zone and beach management, oil spills, and environmental education. The Department of Agriculture is responsible for soil and water conservation, reforestation, and the planning of national parks and protected areas. The Town and Country Planning Department has overall responsibility for physical development and, in this regard, requests Environmental Impact Assessments (EIAs) on major developments, but there is no mandatory nor legal requirement to undertake such assessments. Other environmental programs instituted by non- governmental organizations (NGOs) and special interest groups include tree planting, environmental awareness campaigns, and recycling and reusing materials. Plans are also underway to integrate the management of marine and coastal areas into the overall planning effort, consistent with integrated planning.

The legislative framework is equally diffuse. While there are several pieces of legislation on the statute books, weak implementation and enforcement are major constraints that inhibit their effectiveness. In addition, other pieces of legislation to strengthen the legislative and regulatory framework have been drafted but not enacted. Government, however, is committed to improving the way in which it manages the environment. It has established the Conservation and Fisheries Department, and is a signatory to a number of regional and international treaties and agreements pertaining to environmental management.

The Report on the Implementation of the Program of Action for the Sustainable Development of Small Island Developing States (SIDS � POA) provides the status of relevant action taken by the Government. It included:

The Government of the UK also has oversight responsibility for the protection of the environment in its Overseas Territories. To this end, it has proposed the development of an Environment Charter between the UK and its Overseas Territories to help the latter build up their capacity to protect their environment and ensure that the UK can reflect the interests of the territories in international agreements.

Therefore, while it is clear that a number of initiatives are underway to address environmental concerns, they are generally underfunded and uncoordinated, and are being implemented without adequate institutional capacity and human resources capability.

2.6 Economy

Though generally similar in structure to the economies of the members of the Organization of Eastern Caribbean States (OECS) with small internal markets, extremely open to world trade, and very vulnerable, the performance of the economy of the BVI differs markedly from that of those countries. The economies of the OECS are characterized by low rates of growth and GDP per capita, high unemployment, and poverty. On the other hand, the BVI economy grew at an annual average rate of just over 6% in real terms between 1994 and 1997. This rate of growth is one of the fastest in the region, in comparison to a rate of less that 2% for the OECS. GDP per capita is estimated to have increased from $20,817 in 1993 to $33,713 in 2000, and is currently one of the highest in the world. There is almost full employment; labor is imported; the Human Development Index (HDI), which is a broader measure of social development than GDP, shows that the BVI falls in the high human development average range of 0.800, and there is little evidence of poverty.

The difference in economic performance is attributed mainly to:

The good performance of the BVI economy that has taken place despite the ravages of hurricanes in the late 1980s and mid 1990s is attributed also to generally sound economic management, manifested by the timely entry into the international offshore financial services industry and favorable market conditions. These have contributed to making the economy the success story of the BVI over the past two decades.

Tourism and international financial services have emerged as the major engines of growth. Together, these sectors dominate overall economic activity. They account for more than two-thirds of GDP, wages and salaries, Central Government revenue, and international trade. The international financial services industry, which largely involves offshore company registration, is the largest earner of foreign exchange. It is a major employer of professionals and medium-skilled persons. The industry provides important linkages with accounting, legal, and banking services, and provides an important service to an international clientele. Tourism is the second largest earner of foreign exchange and the single largest employer in the private sector. On the other hand, the once dominant agriculture sector accounts for less than 2.8% of GDP, and is now an insignificant employer of labor. In fact, the physical structure of the territory denies a comparative advantage in agriculture, while manufacturing potential is limited through high wages, limited skills, and weak infrastructure.

The private sector, foreign and local, combines with the Government to drive economic activity. Foreign private sector interests tend to dominate the leading sectors. Government performs the important roles of facilitator, regulator, provider of physical and social infrastructure, and developer of human resources. The small local private sector provides support services to the main industries, as well as in the provision of physical infrastructure.

The small size and narrow production base renders the BVI an open economy, in which international trade is a dominant factor in all social and economic activity. Trade has a significant impact on government revenue, with import duties accounting for 14% between 1993 and 2000. The data also reveal a continuing imbalance in visible trade, evidenced by an average deficit of approximately $161m over the last 5 years. This is compensated for by a healthy surplus on trade in services, which was as high as $235m in 1995.

Fiscal operations are characterised by a pattern of steadily increasing revenue and expenditure. Between 1993 and 2000, revenue increased from $70.5m to $183.1m, while expenditure rose from $59.2m to $134.6m. As a result, there was a substantial surplus on the recurrent account that was used to finance capital expenditure and build up reserves. Over the period the overall budget surplus moved from -$6.9m in 1993 to an estimated $9.6m in 2000. On the recurrent account, Government has managed generally to contain expenditure on personal emoluments to less than 50% of total expenditure. This trend was reversed in 1997 when there was a significant increase of 8% that reflected public sector pay rises and a higher level of employment. This was matched by a commensurate decrease of 7% in expenditure on operations and maintenance. In fact, while recurrent expenditure has increased annual over the period from $59.2m to $134.6, capital expenditure did not keep pace with either growth in revenue nor recurrent expenditure. Capital expenditure fluctuated from $18m in 1993 to $21.3 in 1994, fell to $13.4 in 1996 and rose to $38.9m in 2000.

Direct revenues arising from the offshore financial sector dominate the fiscal revenue position of the BVI. These increased from $24.3m in 1993 to an estimated $87.1m in 2000, compared to the increase in total revenue from $70.5m to $183.1m. In fact, the growth of offshore revenue has exceeded that of total revenue as well as revenue from other sources for every year between 1993 and 2000. During that period, offshore revenue as a percentage of total revenue moved from 34% to 48%.

Over the planning period, the economic prospects will continue to hinge on the fortunes of the tourism and offshore financial services industries that are both subject to the vagaries of external market forces.

2.7 Physical Development

Over the past two decades or so, there has been significant growth in physical development of the territory. Several factors contributed to this growth. Among them is the increase in the number of tourist arrivals and the economic prosperity of the territory relative to that of neighboring islands, a circumstance that has resulted in significant immigration and the return of residents from abroad. More recently, as we emerged as a suitable location for offshore financial services, this has impacted on construction activity associated with the provision of quality office accommodation and residential properties. Office complexes, hotels, houses, and apartments have been constructed apace. This has been accompanied by a phenomenal increase in the motor vehicle population.

Currently, there is no formally approved physical development plan for the territory. As a result, this growth has been largely unplanned and characterized by:

Physical development is regulated by the TCPD through the Land Development (Control) Ordinance and the Buildings Ordinance. However, the governing legislation is more oriented towards regulating the use and development of land rather than for overall physical development, and as yet, there is no legislation in place requiring that EIAs be carried out for major developments.

Recently, the following initiatives have been undertaken to improve the framework for and the overall effectiveness of physical development:

Despite the limitations identified above, there are vestiges of order in certain areas. In Tortola, for example, there is a concentration of hotels on the coastal areas. Major shopping and commercial activity is concentrated in Road Town, though increasingly there is evidence of incompatible development in the main town in particular. On the other hand, physical development is less ordered in the other inhabited islands of Virgin Gorda, Jost Van Dyke, and Anegada.

2.8 Physical Infrastructure & Utilities

Recognizing the importance of its establishment and maintenance to national development in general, to the investment climate and to improvement in living standards in particular, the Government has sought to improve the quantity and quality of physical infrastructure over the past decade. Yet, in all areas and to varying degrees, developments have not kept apace with the increasing demand by the larger population, international trends and requirements, and increasing expectations of high quality. This situation analysis reveals the status of key components of infrastructure.

Transportation

All three major types of transportation are important to us, with air and sea accesses being the more critical. Air transport is facilitated primarily through the main airport on Beef Island, to the east of Tortola. It is designated a Federal Aviation Administration (FAA) approved international airport, with runway of 1,116 meters. Of the commercial aircraft commonly used at present, only the smaller ATR 42 and the Dash 8 aircraft can be accommodated. As a result, the more popular, economical, and convenient aircraft such as the ATR72, ATP, or SAAB100 does not service the territory. Two main airlines, LIAT and American Airlines, together with small scheduled charters, operate out of Beef Island. Smaller airstrips are located on Virgin Gorda and Anegada, with runways of 945 and 763 meters respectively. These limited facilities, though they account for about one-third of all arrivals, pose a serious constraint to the accessibility of the territory to the rest of the world and vice-versa. There are advanced plans to upgrade the Beef Island airport to a length of 1,416 meters, and to improve the facilities on Virgin Gorda and Anegada.

Sea transport assumes a different level of importance because it is a major means of transport for residents within the territory, separated as it is by water. In addition, it accounts for two-thirds of international arrivals and the majority of international trade. This movement of persons and goods is facilitated by a number of public facilities at Port Purcell, the main harbor that is a deepwater port, and shallow draft facilities at Sopers Hole at West End, The Valley in Virgin Gorda, and Jost Van Dyke. In addition, there is the deepwater cruise ship dock at Wickham's Cay in Road Town. Ferry services play an important role in sea transportation for both residents and tourists among the islands of BVI, and between the islands of the BVI and the United States Virgin Islands. These are accommodated in the shallow draft ports that are generally inadequate in terms of size and supporting infrastructure, such as terminal facilities and mooring areas.

A road network of approximately 176.6 km facilitates land transportation. Generally, the network is fairly efficient in terms of connecting the main centers of settlement, but its overall condition is not satisfactory. About 25% of the network is unpaved, 80% of which is on Anegada and Jost Van Dyke. Tortola has the most developed system of all the inhabited islands, while most of Virgin Gorda is accessible. The extent of paving apart, the condition of the roads is rendered poorer, particularly in the hilly interior where they are generally narrow and steep in large sections. Drainage facilities are similarly inadequate because of the difficult terrain and the absence of proper regulations for the management of this aspect of the infrastructure. The inefficient drainage facilities cannot cope with soil and water runoff, and this has an adverse effect on the roads, as well as harbors and seaports.

In addition, there is the problem of uncoordinated road layout caused by customary land tenure, while the lack of planned quality maintenance and the dramatic increase in vehicular traffic over the past two decades have contributed to a continuing deterioration in the state of roads in the territory. Population pressure and the need for greater accessibility continue to drive expansion of the network.

The BVI does not have a public transportation system. There are privately owned and operated minibuses, taxis, tour, and vehicle rental services that have developed specifically around the tourist trade, but which also cater to residents. The most prevalent mode of transport for residents is private automobiles, and this phenomenon contributes to traffic congestion at peak hours, parking problems, and environmental pollution in Road Town as well as in other residential areas.

Electricity

The state-owned statutory corporation, BVI Electricity Corporation (BVIEC), provides electricity. The main facility is located at Pockwood Pond, with backup at Long Bush. The total system capacity is approximately 19.58 megawatts (MW), and there is a fairly extensive coverage of all the inhabited islands. A 60 kilovolt (kV) generator serves Anegada. Approximately 98% of households are connected to the network. The source fuel is imported diesel oil.

The system was extensively damaged by hurricanes in 1995. This was partly a result of the exposure of the majority of lines to the elements rather than being buried underground. The deficiency of the system has been exacerbated by larger-than-anticipated growth in demand, the need to tie the network to a distribution ring, and the poor state of the undersea lines to Virgin Gorda. These result in frequent outages. Overall, there is need for significant investment in plant upgrade and modernization.

The BVIEC has embarked on a development programme financed through a loan agreement with the Social Security Board and Banco Popular de Puerto Rico. The programme includes:

While the Corporation has realized operating profit in recent years, its operating margin is small and its capital structure is highly leveraged. This has contributed to inadequate maintenance and rehabilitation which, together with a less than efficient billing system, has affected overall efficiency.

Water and Sewerage

The provision of adequate water and sewerage facilities is the responsibility of the Water and Sewerage Department, a division of the Ministry of Communication and Works. Water is supplied either from the public system operated by the Department, or from private cisterns. The former mode provides about 70% of total water demand, and the latter caters for the remaining 30%. This poses a major challenge to the provision of potable quality water in the territory. While up to 10 years ago only a relatively small percentage of households (30%) were connected to the public water supply system, today over 85% is connected, and piped water is now available throughout most of Tortola and Virgin Gorda. In Anegada, there is no public water supply system. This is in striking contrast to the situation in Virgin Gorda, where the most complete public water supply exists. In the absence of an adequate supply of ground water, privately owned desalination plants supply the public system almost exclusively.
The water department suffers from a number of problems, the most serious being a poor system of leak-detection that results in significant water losses (of over 30%) from the distribution system. Old cast iron pipes, especially in the Road Town area, exacerbate the problem. In the past, sewerage operations suffered from a weak billing and collections system exemplified by customers who are connected and not billed for almost 10 years. There was about a 20% collection rate for sewerage that caused heavy losses of revenue. Recent improvements to the system have reversed the situation. Still, water and sewerage services are provided at subsidized prices that do not allow the Department to record operating profits.

An estimated 95% of homes have either septic tanks, or are connected to sewerage systems in Road Town and Cane Garden Bay. These systems also have pump-out facilities for yachts. There remains, however, the environmental problem caused by inadequate wastewater treatment that results in the discharge of untreated effluent into the marine areas.

Telecommunications

A highly efficient telecommunications system is a sine qua non for maintaining our competitiveness, particularly in the international industries of tourism and offshore financial services. Within the last decade, rapid strides have been made in improving the quality of service. All of the large providers are from the private sector, with international connections and access to state-of-the-art technologies. Cable and Wireless (WI) Ltd., which provides local and international telephone, Internet, cellular radio, and other international data access services, dominates the industry. Cable Television (Ltd.) provides access to international cable television channels. The major courier services operate out of the territory, and local communication is enhanced by the existence of two locally owned radio stations.

Postal Service

Despite the rapid developments in electronic mailing, the traditional postal service is still relied on heavily for non-commercial communication. The service is hampered by the absence of home delivery of mail, and competition from the more efficient and faster forms of written communication such as facsimiles, couriers, and e-mail. There is still need, however, for an upgraded service to facilitate cheap and efficient written communication among residents and between residents and the rest of the world.

Industrial Estates

Industrial activity in the BVI is in an embryonic stage, as evidenced by the relatively low contribution of manufacturing activity to GDP. Three areas are identified for industrial development � Pockwood Pond, Fish Bay, and Port Purcell. However, the bias towards commercial activity has resulted in a concentration of commercial activity in Road Town along Main Street and Wickham�s Cay, and in Port Purcell where industrial sites are converted into commercial uses as supermarkets, mini-marts, and shops. The Draft Physical Development Plan (1996) sets out the criteria for locating various categories of industrial development.

2.9 Human & Social Development

Human resource development is a major cornerstone of our integrated development effort. It is critical for the development of human capital and the enhancement of the productivity and competitiveness of the territory. While the recent period of economic growth has resulted in significant improvements in education, health, and general social well being of the population, there is growing concern over the ability of the relevant social services to cater efficiently for the needs of the larger population.

Education, training, and health are normally identified as three of the more important elements that impact significantly on our human and social condition in general, and on the development of human capital (human resource development) in particular. Equally important, however, are the provision of recreational facilities and welfare services, adequate treatment of issues relating to the elderly, youth, disabled, family, and gender, improved community relations, and increased attention to the emerging issues of social cohesion, crime and violence, substance abuse, vagrancy, and delinquency. In all these areas, there is work in progress that needs to be adapted to the changing circumstances and the requirements of integrated development.

Education and Training

Education has played an important role in the improvement of our social status, as it has done throughout the Caribbean. The BVI reports a relatively high literacy rate of over 98%. Education is largely publicly funded and compulsory from age 5 to 15. At the tertiary level, a wide range of educational opportunities is provided at the Community College. In addition, the Government finances overseas education and training for qualified citizens in fields of study that are relevant to the development needs of the territory. Government has placed a high priority on education. Between 1992 and 1996, education affairs and services accounted for approximately 16% of total government expenditure, about 3.2% of GDP at current prices.

Basically, the system of education caters for four levels � early childhood, primary, secondary, and tertiary. Education is free and compulsory up to the age of 15, with Government being the main provider of services. Excluding the early childhood education, the system caters for approximately 5,300 students, about 2,900 at the primary level, about 1,700 at the secondary level, and about 700 at the tertiary level.

Early childhood or pre-school education caters for the age group 3 to 5. It is exclusively a private sector activity, there are approximately 15 such service providers, and total enrolment is 635. This activity is largely unregulated from an educational perspective. However, given its increasing importance in human resource development, the Government has begun to play a role through the provision of small grants, assistance with the development of programmes, and the choice of appropriate instructional materials. Standards for Early Childhood Education are also being established.

Primary education covers the age group 5 to 12, and is provided by a network of 16 public and 5 private primary schools that are located throughout the territory. While the geographical coverage and physical infrastructure are relatively satisfactory and the average enrolment rate is 98%, there is evidence of less-than-satisfactory academic performance. An increasing number of 14+ students are failing the Primary V assessment, while more are admitted to the level 51 programme at the secondary school. These deficiencies adversely impact on performance, as well as participation at the secondary level.

Secondary education is available at three institutions: The BVI High School in Tortola, the Bregada Flax Educational Center in Virgin Gorda, and the Secondary Division in Anegada. The level of attainment is a cause for concern. As far back as 1988, the Review of Education noted from a sample of Caribbean Examinations Council (CXC) results that only 5 out of 18 students might have qualified for University matriculation. An analysis of the 1997 results show that only 14% of students who graduated from secondary schools in the territory achieved CXC passes at General Proficiency levels I and II and might qualify for university matriculation, a trend not dissimilar to that of other Caribbean countries. Yet, over the years there were opposite results for the High School Certificate Program, in which more than 50% receive Grade I and II certificates. This contrasting situation raises questions about the comparability and relative quality of the two sets of certification.

The shining jewel of the BVI education system is the tertiary education facility, the H.L. Stoutt Community College. This facility that was established in 1991 provides a wide range of training, mainly in liberal arts and management up to the level of associate degree and an Executive Bachelor's Degree in Business Administration. While the offerings are limited in the area or vocational and technical training, it has attempted to service the immediate needs for job opportunities in areas such as computer literacy, business management, and secretarial skills. It also provides opportunities for qualified students from the secondary school to follow programmes that will allow them to meet the matriculation requirements of British-type universities, such as the University of the West Indies.

In the absence of a full-fledged university, the Government facilitates overseas training in fields of study that match the development requirements of the territory.

While strong in the provision of basic and formal education, there is no system in place for the provision of special education, technical and vocational training, or lifelong learning. Other areas of concern are the content of the curricula, access to secondary education, the quality of teachers, the heavy reliance on expatriate teachers, and the performance of males relative to females.

Health

In broad terms, the BVI has a relatively good health status, measured by primary indicators such as the crude death and infant mortality rates and life expectancy at birth. The physician to population ration is approximately 2.2 per 1,000, which is high for Caribbean and Latin American countries. Generally, improvements in nutrition, sanitation, access to immunisation, and family planning have contributed to lower mortality rates and increased life expectancy. By 1996, successful health policies resulted in a crude death rate of 4.7, an infant mortality rate of 13.4 and a life expectancy at birth of 74.8 years.

This satisfactory health status has been achieved in spite of a deficient public health system that is evidenced by the fact that an estimated 60% of medical consultations take place in the private sector, including as much as 95% in some specialities. This also includes a significant proportion of the population who travel to Puerto Rico and the US Virgin Islands for health services.

The recent rapid economic growth and improved living standards have also affected the health condition. An undesirable outcome of these circumstances is a greater incidence of chronic diseases and disabilities. Indeed, medical conditions associated with lifestyles are beginning to emerge as a major health issue. Research carried out over the years indicates that the lifestyles of the population, such as sedentary living, unhealthy eating habits associated with �fast foods,� excessive alcohol consumption, smoking, stress, and other ill effects of affluence contribute significantly to the increased incidences of non-communicable diseases.

This emerging health condition is consistent with a growing but disturbing trend in the Caribbean. This trend suggests that obesity and other non-communicable diseases such as diabetes, hypertension, heart diseases, and some cancers are replacing malnutrition and infectious diseases as the leading cause of hospitalisation and death. From a national management perspective, treatment of these diseases is more costly, and increasingly, they are afflicting persons in the more productive period of life.

The health infrastructure consists of:

Health care is provided by both the public and private sectors with the emphasis on primary care. Provision by the voluntary/NGO sector is insignificant. Limited secondary health care is provided at the Peebles Hospital, and there are neither facilities for tertiary health care nor separate facilities for mental health care. The Government is the main provider through the Peebles hospital and the network of district clinics.

The public health system provides a combination of hospital, community, and environmental services. Between 1992 and 1996, public expenditure on health affairs and services accounted for approximately 8% of total government expenditure, about 1.6% of GDP at current prices.

Private sector activity is not inconsequential, both in terms of activity and income. The Keele report estimated that �private practice accounts for anything between 50% and 80% of the care provided on the island (territory).�

Health care, like a number of public goods in the territory, is inherently high cost. Apart from the direct cost of the service, the archipelagic nature of the territory imposes additional transaction costs on the individual and the system.

Despite the high cost, Government services are provided on a subsidised basis. The Keele report identified two approaches to subsidisation. Firstly, there are a number of groups that are exempted from charges. These include persons aged 65 years and over, school children, the mentally ill, the indigent, prisoners, police officers, prison officers, fire officers, public sector health workers, and workers in the Adina Donovan Home. The second way is through a fee structure that does not reflect costs. In addition, no fees are charged for waste disposal and only dental services provide a source of income from Community Health Services.

In the absence of a national health insurance scheme, the Social Security Board (SSB) plays a significant role in financing health care in the BVI. Under the social security scheme to which contributions are mandatory, all employees over the age of 15 are covered for a range of health related benefits. The SSB also allocates a portion of its income to improvements in public health services on an ad hoc basis.

Between 1993 and 1996, a number of reforms have been implemented recently under the United Kingdom Government-funded Health Reform Initiative. The emphasis was on health reform rather than health care reform, and included agreement and partial implementation of a new management structure, and the undertaking of a number of health sector studies.

At the human resource level, the BVI suffers from a shortage of health care workers, and relies heavily on expatriate health care providers. In 1995, 67% of the nurses and 33% of the assistant nurses attached to the community health services were from outside the territory.

Housing

The provision of housing in the BVI is a private sector activity. Cognisant of the link between housing and land ownership or access to land, the Government facilitates housing development by providing sites and services. In addition, The Development Bank of the Virgin Islands (DBVI) and the SSB provide lines of credit for housing for lower income level families. The evidence suggests that all households in the BVI are housed in some sort of physical structure, the majority of which are constructed of concrete, wood, or a combination of both. The housing stock, however, is ageing. Approximately 20% was constructed before 1960, 19% in the 1960s, and 38% after 1980. The remainder is not identified by year of construction. A significant trend in housing construction is the dramatic shift towards apartment/condominium type dwelling. This category has accounted for the largest number of housing units constructed in the territory since 1980, and caters for over 50% of the resident population and probably the majority of immigrants.

Much of the growth in the construction of dwelling units seems to be in response to the demand by the immigrant population and the supply response by local population in the form of the provision of rental accommodation. For the local population, the supply of housing appears adequate to meet the demand, but there is concern about the increasing divergence between income levels and housing costs. This situation can have an adverse impact on the accessibility of housing to individuals in the lower income levels. Another concern relates to adequacy of insurance coverage given the location of the territory in the hurricane belt.

The issue of land tenure is closely linked to housing development. In many instances, one parcel of land has multiple ownership and inherited occupancy. As a consequence, there is the legitimate expectation of subdivision into housing lots. On the island of Anegada there is the separate and larger unresolved issue of the ownership of the land that continues to constrain private housing development.

Poverty

Poverty can be defined as the inability of individuals/households to afford the basic amenities that are essentials for a comfortable existence. This definition implies that a certain level of income must be attained to avoid the discomforts associated with poverty. The shortcomings in the data, particularly the income data, and resulting analysis do not allow for firm conclusions on the incidence of poverty in the BVI. In the overview, however, it must be admitted that poverty is not a major issue, and its alleviation is not a priority concern at this time. The evidence suggests that generally the majority of households in the BVI have access to the basic facilities and amenities.
This does not mean that poverty does not exist. While it is not a pervasive characteristic of the society as is the case in other countries of the OECS, recent household data point to the disturbing trends of the emergence of pockets of poverty, particularly among single parent families and increasing disparity in the distribution of income.

Welfare

The Government provides a wide range of services for the less fortunate and senior members of our society. These include: social security benefits, homes for the aged, and children with special problems, as well as for women affected by domestic abuse, rehabilitation facilities and programs, a learning center for children with special needs, and free and subsidised health care.

The Social Security system is a mandatory contributory scheme that provides the principal form of welfare benefits and is a valuable safety net for a larger number of recipients. As the welfare system expands, its efficiency and effectiveness are hampered by the absence of clear policies. The effectiveness of the system, however, is hampered by the inadequacy of the database, and for the provision of the required services, a lack of clear policies in respect of qualification and level of benefits and the database needed to develop and implement such policies. In addition, the quantity and quality of staff needs to be improved.

Youth and Sport

The young (<15 years) represent about one quarter of the population. As a result, youth development has emerged as a critical aspect of our overall development. Here, as elsewhere, the youth is at great risk. In recognition of these circumstances, the Government, in 1994, approved in principle a National Youth Policy, as a consequence of which the Social Development Department implemented a number of youth development programs.

Sport and recreation are important vehicles for youth development. There exists a Recreation Trust that has the responsibility to purchase or lease lands for public recreational facilities, as well as administer, maintain, and encourage their use. Over the past decade significant capital expenditure was incurred in the provision of recreational and sporting facilities throughout the territory. This capital expenditure, however, has not been matched by the necessary recurrent expenditure to facilitate the adequate maintenance and management of the facilities. Competitive sport is very much a community/NGO effort with negligible involvement by the Government.

Culture

Over the years, the heavy inflows of immigrants have contributed significantly to the cultural diversity of our small territory. As a result, Government has taken a number of steps to preserve the rich cultural heritage of our society that is also an important product of our tourist industry. The responsibility for the preservation of our cultural heritage is shared between the Government through the Department of Education and the community through a number of NGOs. Recent initiatives include the promotion of annual cultural events and festivals, as well as the preservation of historical sites.

2.10 Employment

Technically, the BVI has maintained full employment over the last decade. The number of employed grew from 10,255 in 1992 to 12,774 in 1999. The vast majority is employed in the services sector, where the largest employer is the Public Administration industry with 3,839 employees, followed by Hotels and Restaurants with 2,345. These account for 30.1% and 18.4% respectively of total employment. The majority of the work force (76.4%) is in the age group 20 to 45, with close to 70% being immigrants. The data for 1996 reveal no overt gender discrimination in employment, with male and female employees both accounting for roughly 50% of the work force respectively. However, the average earnings of male employees were approximately 25% higher than that of female employees.

Average employee earnings in 1999 was $18,950. The highest levels of remuneration are paid in the financial sector, followed by electricity, gas, and water supply, where overtime payments are a significant component of earnings. Next is the public service. At the bottom of the scale are activities as fishing, manufacturing, and construction, where most individuals are engaged in elementary occupations.

2.11 Public Sector & Public Administration

The consolidated public sector consists of the various departments of the Central Government and public enterprises and statutory agencies such as the BVI Electricity Corporation, the BVI Ports Authority, the Development Bank, the Social Security Board, the BVI Fishing Company, and the Wickham�s Cay Development. Of the latter group, only the Electricity Corporation and the Social Security Board have demonstrated financial viability over the past five years.

Our public sector in the BVI is the combination of the legacy of the colonial system and the ad hoc requirements of the constitutional government over the past two decades. While the range and quality of public services has improved over the last decade in particular, a lot more needs to be done to ensure that taxpayers are getting value for money. Agencies need to be rationalised and their areas of responsibility clearly defined by legislative, regulatory or policy frameworks. In a number of instances, the level and quality of service need to be further improved.

The success of this integrated development strategy depends on the capacity of the core public sector � the Central Government � to analyse, formulate, and implement the necessary policies. The size and functions of this core have increased over the last five years. The number of employees in the public administration and social security sector increased from 2,006 to 2,298 between 1992 and 1999. This is counter to the trend of �down-sizing� and �right-sizing� of the sector, and the transformation of its primary role to that of establishing an environment conducive to private sector activity.

Public service expenditure was contained at less than 50% of recurrent expenditure for all of the last six years except 1997. The ratio of expenditure on wages and salaries to expenditure on goods and services ranged between 1.5:1 and 1.7:1 over the period 1992 to 1996. During this time, the bill for wages and salaries increased by 62.5% from $24m to $39m, while the expenditure on goods and services increased by 72% from $13.5m to $23.2m. This compares to overall public service expenditure that grew by 54.3%, from $40.9m to $63.1m.

In recognition of the need for greater efficiency, several initiatives have been undertaken to improve the performance of the public sector. These include:

2.12 Development Policy

Over the past two decades the focus of development policy has been on the economic and social sectors. The dominant strategy of the Government was to transform the BVI from a primarily agricultural society to a highly competitive and leading center for tourism and financial services.

In the area of tourism, the core policies were dedicated to improving the quality of the product and services as well as enhancing our image as a superior tourist destination. The measures related to the management of the sector, the provision of infrastructure, the establishment of a conducive investment climate, and the preservation of the environment.

In the offshore financial services sector, the strategy was to create a world class environment for the operations of these institutions. A wide range of measures were implemented, particularly at the legislative and regulatory levels, to provide a competitive advantage to operators in the BVI. In addition, an effective, responsible, and internationally reputable management structure was established.

Other elements of economic policy facilitated the expansion of private sector activity, particularly in those areas where linkages are possible with the main areas of economic activity.

The social sector strategy was aimed at providing a better quality of life. This was achieved by the implementation of policies pertaining to improving the services provided in health, education, and welfare. As a result, the BVI has a high average human development index (HDI) calculated in accordance with the UNDP measurement criteria.

In support of these main policies, the Government provided physical infrastructure, improved public administration capability, and sought to preserve the environment.

2.13 Disaster Management

The BVI is an area prone to natural and manmade disasters that result in considerable destruction. In recognition of this, as well as the fact that sustainable development cannot be achieved unless disaster management is integrated with the overall planning effort, Government has undertaken a number of measures to put the territory at a certain level of preparedness to respond to such events. The National Emergency Advisory Council (NEAC) is established as the policy-making body for disaster management. The chairperson of the NEAC is the Deputy Governor, whose portfolio includes responsibility for the Office of Disaster Preparedness (ODP). The national response system includes the ODP, medical, police, fire and rescue, and Virgin Islands Search and Rescue (VISAR). In the case of oil spills, the Conservation and Fisheries Department is involved. In 1997, the Executive Council approved a National Disaster Plan that details the framework and responsibilities of disaster recovery operations in the event of a disaster.

The responsibility for disaster management, however, is not solely that of the Government. The private sector, communities, NGOs, and international organizations are also involved. VISAR, for example, is an NGO dedicated to saving lives at sea. Private firms are involved in the adoption of emergency shelters and upgrading them to acceptable structural standards, private medical personnel are prepared to provide emergency medical attention, while the international organizations provide training and are able to mobilize international assistance in time of need.

2.14 Globalization & Global Connectiveness

While still a major challenge for us, globalization is not a new phenomenon. The process began many decades ago. It is a key characteristic of the New World order. What are new are its relationship to the emergence of the New Age of Information and the imperative of global connectiveness through technology. What are new are the impact that these phenomena have on, and their importance for, the conduct of business. It is information technology that has made us part of the global economy.

As people all over the world benefit from new technology, better and greater opportunities for business emerge. The whole world is now our market. Companies in our offshore financial sector serve clients in Australia, Africa, Asia, Europe, and North America. Traditional advantages of size no longer guarantee success. Small is once more beautiful and has its own advantages. Globalization and the New Age of Information have neither age nor gender qualifications. Together, they constitute an economic tidal wave of which we are unmistakably a part, since most of our national income comes from abroad and is generated substantially by information technology.

2.15 Science & Technology

A necessary ingredient for the 21st century is an appropriate platform and infrastructure for Science and Technology (S&T), including information technology. The absence of extensive industrial production processes and a lower level of emphasis in the education system have caused them to be not as developed as they should be. There is no explicit S&T policy or National Information Policy (NIP) and the National Information Infrastructure (NII) is not well developed. These are acknowledged deficiencies that must be addressed.

In summary, our planning context is one that, though benefiting greatly from two decades of progress in a number of areas, remains inherently vulnerable.

3. THE DEVELOPMENT AGENDA AND CHALLENGES

3.1 Overview

The development agenda constitutes the broad challenges that face us in the medium term. They are distilled from the situation analysis in the previous section. They are the issues that assume a high degree of priority, and are likely to have a pervasive impact on society. They constitute the core of the plan, and are the main focus of its strategies and policies.

These challenges also arise from the basic dichotomy between growth and development. International experience tells us that while increasing GDP (growth) is important, it is not an end in itself, nor the only end. Increasing GDP is essential as a means to achieving other objectives. Indeed, there is evidence to suggest that increasing GDP may result from the attainment of other objectives in an iterative relationship, giving rise to the theory of mutual exclusivity in the attainment of key development objectives.

Our experience is one that is characterized by a decade of increasing GDP. This has resulted in higher government revenue and expenditure, and contributed to a human development index that falls within the high average range of 0.800 and above. Notwithstanding the rapid expansion of the economy and the major strides in social development, the future development of the territory poses many challenges to the sustainability of the momentum.

Clearly, the overriding challenge is that of consolidating and sustaining the development gains achieved over the past decade, and identified in the Planning Context. This is a primary objective of the Plan. But there are a number of major challenges that must be overcome to achieve that objective. These challenges comprise our development agenda. These are presented hereunder.

3.2 Reducing Vulnerability

A central issue on the development agenda is that of reducing the vulnerability of the territory. Our vulnerability is multidimensional and typical of small states. It arises from a number of factors, including:

Reducing our vulnerability, therefore, requires actions to mitigate the negative impact of these circumstances on our development, including disaster preparedness and recovery systems.

3.3 Promoting Sustainability

Key factors for the success of the integrated approach to development are establishment of a capacity to promote sustainability, and the promotion of sustainability itself. An important requirement for these is increased awareness and involvement of NGOs, community-based organizations (CBOs), and the public in the national decision-making process for the formulation and implementation of programmes. These efforts must be complemented by the assistance available from international agencies and regional organizations. In addition, issues related to gender, population, environment, and technology must be infused into the education curricula and incorporated into the mainstream of the decision-making and planning processes of the Government. Within the Government infrastructure itself, the administrative capacity must be developed for the implementation of the appropriate programmes.

3.4 Ensuring Environmental Sustainability

Environmental matters are rising to the top of the national agenda for many nations, and the BVI is no exception. Environmental sustainability, therefore, is given special mention. We have a fragile natural resource base. We face problems of conservation of our biodiversity, freshwater resources, and watershed areas, as well as coastal and marine resources. As a tourist destination, these issues loom large because adequate management of the environment and ecosystem is a fundamental element of our overall comparative advantage in that industry.

Environmental sustainability is, therefore, a priority concern of the Government, but despite many commendable efforts, the environmental problems requiring attention are many and significant. These include:

It is also recognized that, in a global context, a quality environment can be used to attract quality brainpower that, in turn, can be put to propel professional services as an export commodity. A prerequisite for the sustainability of our future development, therefore, is that it must be in harmony with the environment.

3.5 Enhancing Human Resource Development

The shortage of skilled human resources requires us to rely on significant inflows of immigrant labor, that today accounts for a little over 60% of the labor force. As Government seeks to implement its integrated development strategy and to consolidate the gains achieved to date, emphasis will be accorded ensuring access to a quality labor force with a lower ratio of immigrants to non-immigrants.

The two major pillars of our human resource development strategy are education and health. In both areas, emphasis will be placed on fostering improvements in the quality of services provided and improving accessibility of the population to those services. This approach is required especially to sustain economic growth and enhance global competition.

With regard to education, the Government has taken the position that the system must be of the highest standard and oriented to the major developmental activities if we are to remain globally competitive. To this end, we will continue to give priority to the attainment of the goals of the last five-year educational plan, which were:

In the area of health care, the medium-term strategy will focus on the continued provision of a high-quality, accessible, cost-effective, and sustainable health service. This is being achieved already through the strengthening of primary and secondary health care services through improved geographical coverage and quality of service, and a greater emphasis on health promotion. Increased emphasis will also be place on preventative health care, through the promotion of healthy life styles.

3.6 Improving Physical Infrastructure & Utility Services

In order to contribute to the consolidation of the development gains, the territory must have the ability to respond effectively to the domestic and commercial needs for all forms of required infrastructure. Indeed, one of the most important links of the integrated development process is to improve essential infrastructure services in ports, water and sewage, transport, and roads, since these have an impact on all facets of development. However, despite heavy expenditure in recent years, these key infrastructure services are plagued by of lack of maintenance and rehabilitation, inefficient management, the absence of required new investments on a timely basis, and, where relevant, inadequate cost recovery systems.

The expenditure on physical infrastructure is exclusively for the account of Government (except in the case of the airport on Virgin Gorda) and the pattern of expenditure was inconsistent over the past 5 years. It is reported, however, that this is attributed partly to the lumpiness and indivisibility of certain infrastructural projects undertaken in these years. Total expenditure on physical infrastructure ranged from 15% of capital expenditure in 1994 to an estimated 43% in 1997.

3.7 Improving Physical Development

A priority agenda item is an improved framework for physical development. This must be provided through a physical development plan that must set out the expected level of physical development for the territory in the medium term, and the strategies for ensuring that the best use is made of the available land resources for the benefit of the residents. The purpose of such a plan is to bring about the orderly and coordinated development of the territory. A draft physical development plan already exists. Emphasis will be placed on building consensus and finalizing the document into an approved plan through the process of consultation and adoption by the Executive Council.

3.8 Strengthening Institutional Capacity - Public Sector Management & Administration

A fundamental requirement for the successful management of the territory and, by extension, the successful implementation of the integrated development strategy, is a responsible, efficient, and capable public sector. This is important because of the critical, multifaceted role that the public sector has to play within the development strategy. The public sector is a pacesetter, facilitator, and regulator. In addition, it is responsible for coordinating the formulation and implementation of the strategies and programs that comprise the NIDP. Within the public sector as a whole, these roles require attributes such as strong and effective leadership, integrity, relevant skills, creativity, and flexibility.

The main focus of the core public sector is to ensure the good governance of the territory through effective and efficient management and administration. This is characterized normally by effective coordination among the various agencies of government, and the promotion of a culture of excellence through the inculcation of basic values of integrity, accountability, discipline, respect, tolerance, productivity, and professionalism. These values must pervade all levels of the public sector as an essential component of its guiding principles. They are non-negotiable in the quest for good governance, and pose a major challenge to the development effort.

There is obvious need for a rationalization of services a