The
Development Planning Unit
Government of the British Virgin Islands

POVERTY

 
INTRODUCTION

1.1 Introduction to the Concept

Poverty remains an ambiguous concept, the idea of what entails being poor changes as people attitudes of about what they consider acceptable conditions of living change. Certainly what is 
accepted as poverty today is much different than was known as poverty ten (10) years ago. 
In some countries poverty is also an emotional concept especially where it is associated with 
political importance, such as differences between regions, ethnic groups and groups of non-national origin. Many people enter poverty because of insufficient income brought on by illness, old age or 
some kind of accident.

Internationally, poverty is defined in both relative and absolute terms. However, poverty is 
generally associated with having difficulty to obtain enough food and proper shelter. Absolute 
poverty refers to the situation where people lack sufficient resources to meet their basic needs, 
such as food, shelter, health care and education. Destitution is used to describe the worst cases of absolute poverty. Relative poverty refers to the situation where a particular group in the population 
has a smaller share of money and other resources than most others.

Poverty in fact can be said to be a measure of denial or exclusion from enjoyment of certain basic necessities. Today several measures of poverty are in use but generally most measures are 
associated with some or various levels of income according to the number of persons in the 
household. Generally, the poverty line is a measurement, which shows the income, and resources a household needs for a basic livelihood. It varies somewhat according to how it is calculated and by the cost of living in different places. Households measured above the poverty line have enough to live on, those below do not have enough to live on.

Typically in most countries whether developed or developing, a large portion of households lives just above or near to the poverty line, and could easily slip into poverty. These households operate on narrow margins, fortunate only that some accident or misfortune does not plunge them into 
hardship or destitution. The causes of misfortune could range from a natural disaster to a 
catastrophic illness of the breadwinner, a divorce, old age or loss of a job. It is generally 
conceded that households are defenseless because of their insecurity and their existing 
support, including help from the extended family, is in adequate.

In some country situations there exists a serious poverty gap which is defined as a measure 
of the difference between the income level at which the poverty line is drawn, and the average 
earnings of the poor. The main strategy of many countries in addressing poverty involves closing poverty gap by increasing the income or resources of poor households to above the poverty line.

While the absence of material things is the base of the poverty problem, the consequence of being 
poor include hardship, dependence, oppression, powerlessness, and a variety of individual, family 
and community problems. The absence of money creates all sorts of other difficulties, including making people powerless to act for themselves in an effort to change things, and keeping them depending on others. Many people in poverty suffer from helplessness and this is sometimes associated with the turn to alcohol and drugs abuse.

The poorest households usually include people who have little education or skills and have trouble getting jobs. They often do not have land or permission to use it, live in very poor housing, are 
often left alone by the extended family and have trouble-keeping children in school. Because of 
the way they live and because they cannot always afford healthy food, they may become sick 
easily. They are also unable to cope with sudden events such as a hurricane, a death in the 
family, or marriage break-up. The head of the household maybe a responsible person with a 
job, but who cannot earn enough from it to keep the family properly. They often feel frustrated or apathetic about their situation.

The poorest households are usually smaller and have fewer workers, but they have higher 
dependency rates. That is, people of working age have more children or old people to support. 
They are also less likely to have jobs than adults in wealthier households, often because they
 lack education, skills and opportunity due to their poor background.

The links between poverty, poor living conditions, poor nutrition and ill-health show up most with children. Children in poor households must often go without many of the important things they 
need, including school fees, medical care, and a reasonable place to live. Many health problems are 
caused by poor water supply and inadequate sanitation.

Disabled people are therefore amongst the most disadvantaged, particularly those disabled 
from birth, with handicaps such as crippled limbs, chronic sickness such as asthma, and 
intellectual and mental handicaps. There are few services available to help them, especially in 
rural areas. They have little chance of getting an education if their disability prevents them 
attending normal schools, which in any case are reluctant to accept children with special problems. 
Most employers are unwilling to give disabled people jobs, particularly when they have little 
education and training.

To deal with macroeconomic issues related to or contributing to poverty, government 
switched from comprehensive planning to strategic planning, with the focus now on key 
policy issues. For instance, governments have aimed to raise rates of effective investment, 
ensure competitiveness in the labour force by reducing union protection, deregulation of the 
private sector, improve investment environment for private business, contain government spending, improve government efficiency and have a wider taxation base. The idea is that by making policies to encourage investment and to assist businesses to operate and employ people, while more strongly controlling spending by the Government and making its departments more efficient, the conditions will be right for everyone to find work and become better off. There have been some difficulties, such 
as the Government actually spending more money rather than less, rising costs of operating government departments and services, and less money being available for investment.


1.2 Poverty from the Canadian Perspective

Statistics Canada itself does not claim to measure poverty; rather, it defines a set of income cutoffs below while may be said to live in straitened circumstances. The difference between straitened circumstances and poverty if moot, however, and most social policy analysts, politicians and editorial writers treat the cutoffs as poverty lines. That is how they are treated here.

As a result, it adopted 70 per cent of income as the cutoff point: families that spent more than  
70 per cent of their income on essentials would have little or no income left to spend on 
transportation, health, personal care, education, household operation, recreation or insurance.

In calculating its low-income standard, Statistics Canada begins by estimating the percentage 
of gross income spent by the average Canadian family on food, clothing and shelter. It then 
somewhat arbitrarily marks this percentage up by 20 percentage point s. This final percentage corresponds on average to a given household income level, and this level becomes the low income cut-off for that year.

The survey’s measure of income is comprehensive. It includes wages and salaries (before deductions), net income from self-employment, investment income, government transfer payments (such as Unemployment insurance, social Assistance, old age pensions, refundable tax credits), training allowances and the like, private pensions, scholarships and alimony payments. The only exclusions 
from income are gambling gains, lump-sum inheritances, capital gains, loans and income in kind, 
such as free meals and good produced on the form for domestic use. The survey includes the 
income of all household members over the age of 15.

The definition of family used by Statistics Canada is assessing poverty is the so called economic 
family. It includes all occupants of a dwelling unit who are related by blood, marriage or adoption. 
It also includes couples living together in common-law relationships. An unattached individual is a person who either lives alone or shares a dwelling unit, but is unrelated to the other occupants by blood, marriage, adoption or common-law relationship. In this book, both families and unattached individuals are referred to as households, even though this usage does not strictly coincide with the definition of a household that Statistics Canada uses in other surveys.


Canadian Low-Income Cut-Offs, 1996 (LICOs)

The LICOs are published by Statistics Canada. Families living below these income levels are considered to be living in “straitened circumstances.” The LICOs are more popularly known as Canada’s poverty lines.

Source: Prepared by the Centre for International Statistics at the CCSD using Statistics
Income Cut-Offs. Cat. No. 13-551-XPB, January 1997


2. Poverty in the USA

2.1 Definition of Poverty

Poverty statistics presented in this report are based on a definition developed by Mollie 
Orshansky of the Social Security Administration (SSA) in 1964 and revise in 1969 and 1981 by interagency committees. This definition was established as the official definition of poverty for 
statistical use in all Executive departments by the Bureau of the Budget (BoB) in 1969 (in Circular No.A-46); after BoB became Office of Management and Budget, this was reconfirmed in Statistical
 Policy Directive No.14.

The original poverty index provided a range of income cutoffs or thresholds adjusted by such 
factors as family size, sex of the family head, number of children under 18 years old, and on farm residence. At the core of this definition of poverty was the economy food plan, the least costly of four nutritionally adequate food plans designed by the Department of Agriculture. It was determined from the Department of Agriculture's 1955 Household Food Consumption Survey that families of three or 
more persons spent approximately one-third of their after-tax money income on food; accordingly, poverty thresholds for families of three or more persons were set at three times the cost of the economy food plan. Different procedures were used to calculate poverty thresholds for two-person families and persons living alone in order to compensate for the relatively larger fixed expenses of 
these smaller units. For two-person families, the cost of the economy food plan was multiplied by a factor of 3.7 (also derived from the 1955 survey). For elated individuals (one-person units), no 
multiplier was used; poverty thresholds were instead calculated as a fixed proportion of the corresponding thresholds for two-person units. Annual updates of these SSA poverty thresholds 
were based on price changes of the items in the economy food plan. 

As a result of deliberations of a Federal interagency committee in 1969, the following two 
modifications to the original SSA definition of poverty were adopted: (1) the SSA thresholds for 
non farm families were retained for the base year 1963, but annual adjustments in the levels were based on changes in the cost of foods in the economy food plan; and (2) the farm thresholds were raised from 70 to 85 percent of the corresponding on farm levels. The combined impact of these two modifications resulted in an increase in the tabulated totals for 1967 of 360,000 poor families and 1.6 million poor persons.


2.2 Current Poverty Measure

The U.S. measure of poverty is an important social indicator that affects not only public perceptions of well being in America, but also public policies and programs. The current measure was originally developed in the early 1960s as an indicator of the number and proportion of people with inadequate family incomes for needed consumption of food and other goods and services. At that time, the poverty "line" for a family of four had broad support. Since then, the poverty measure has been widely used for policy formation, program administration, analytical research, and general public understanding.

The current poverty measure has a set of lines, or thresholds, that are compared with families' resources to determine whether or not they are poor. The thresholds differ by the number of 
adults and children in a family and, for some family types, by the age of the family head. The 
resources are families' annual before-tax money income.

The current thresholds were originally developed as the cost of a minimum diet times three to 
allow for expenditures on all other goods and services. The multiplier of the three represented the after-tax money income of the average family in 1955 relative to the amount it spent on food. The central threshold for 1963 was about $3,100 for a family of four (two adults and two children). 
Because the thresholds have been adjusted only for estimated price changes, the 1992 threshold 
for a two-adult/two-child family of $14,228 represents the same purchasing power as the 
threshold of $3,100 did 30 years ago.

From the beginning, the poverty measure had weaknesses, and they have become more 
apparent and consequential because of far-reaching changes in the U.S. society and economy 
and in government policies.

First, because of the increased labor force participation of mothers, there are more working 
families who must pay for child care, but the current measure does not distinguish between 
the needs of families in which the parents do or do not work outside the home. More generally, 
the current measure does not distinguish between the needs of workers and nonworkers.

Second, because of differences in health status and insurance coverage, different population 
groups face significant variations in medical care costs, but the current measure does not take 
account of them.

Third, the thresholds are the same across the nation, although significant price variations across geographic areas exist for such needs as housing.

Fourth, the family size adjustments in the thresholds are anomalous in many respects, and changing demographic and family characteristics (such as the reduction in average family size) underscore the need to reassess the adjustments.

Fifth, more broadly, changes in the standard of living call into question the merits of continuing 
to use the values of the original thresholds updated only for inflation. Historical evidence suggests 
that poverty thresholds - including those developed according to "expert" notions of minimum needs - follow trends in overall consumption levels. Because of rising living standards in the United States,
 most approaches for developing poverty thresholds (including the original one) would produce higher thresholds today than the current ones.

Finally, because the current measure defines family resources as gross money income, it does not 
reflect the effects of important government policy initiatives that have significantly altered families' disposable income and, hence, their poverty status. Examples are the increase in the Social Security payroll tax, which reduces disposable income for workers, and the growth in the Food Stamp Program, which raises disposable income for beneficiaries. Moreover, the current poverty measure cannot reflect the effects of future policy initiatives that may have consequences for disposable income, such as changes in the financing of health care, further changes in tax policy, and efforts to move welfare recipients into the work force.

The Panel on Poverty and Family Assistance concludes that the poverty measure should be revised to reflect more accurately the trends in poverty over time and the differences in poverty across population groups. Without revision, and in the face of continuing socioeconomic change as well as changes in government policies, the measure will become increasingly unable to inform the public or support research and policy making.

It is not easy to specify an alternative measure. There are several poverty concepts, each with merits and limitations, and there is no scientific basis by which one concept can be indisputably preferred to another. Ultimately, to recommend a particular concept requires judgment as well as science.

Our recommended changes are based on the best scientific evidence available, our best judgment, 
and three additional criteria. First, a poverty measure should be acceptable and understandable 
to the public. Second, a poverty measure should be statistically defensible. In this regard, the 
concepts underlying the thresholds and the definition of resources should be consistent. Third, 
a poverty measure should be feasible to implement with data that are available or can fairly 
readily be obtained.

2.3 Setting and Updating the Poverty Threshold

We propose that the poverty-level budget for the reference family start with a dollar amount for 
the sum of three broad categories of basic goods and services food, clothing, and shelter (including utilities). The amount should be determined from actual Consumer Expenditure Survey (CEX) data as a percentage of median expenditures on food, clothing, and shelter by two-adult/two-child families. 
This sum should then be increased by a modest additional amount to allow for other necessities. 
The allowance for "other expenses" is intended to cover such goods and services as personal 
care, household supplies, and non-work-related transportation. However, it does not include 
such nondiscretionary expenses as taxes and childcare and other costs of working, which are 
treated as deductions from income.

Once a new reference family threshold is determined, it should be updated each year with more recent expenditure data. The recommended updating procedure will automatically, over time, reflect real changes in the consumption of basic goods and services without the need for a periodic and, inevitably, disruptive readjustment in the level. It represents a middle ground between the approach of simply updating the thresholds for price changes, which ignores changes in living standards over time, and the approach of undating the thresholds for changes in total consumption.

As part of implementing the proposed poverty measure, the current official threshold should be reevaluated in light of the proposed threshold concept, which treats certain expenses as deductions from income rather than as elements of the poverty budget. That evaluation should also consider the real growth in the standard of living that has occurred since the current threshold was first set for 1963.

We do not as a panel recommends a specific threshold with which to initiate the new poverty measure. Ultimately, that decision is a matter of judgment. We do, however, offer our conclusion about a 
range for that initial threshold. This conclusion represents our own judgment, informed by analysis of thresholds developed from other commonly used concepts, such as expert budgets, relative thresholds expressed as one-half median income or expenditures, and thresholds derived from responses to sample survey questions about the poverty line.

We believe that a reasonable range for the initial threshold for the reference family of two adults and two children is $13,700 to $15,900 (in 1992 dollars). The lower number equals the expenditures for food, clothing, and shelter ($11,950) by families at the 30th percentile of all two-adults/two-children families, with a multiplier of 1.15 for other needed expenditures; the higher number equals the expenditures for food, clothing, and shelter ($12,720) by families at the 35th percentile of all two-adult/two-children families, with a multiplier of 1.25 for other needed expenditures.

2.4. A new Approach to Measuring Poverty

There are ranges of conceptual and statistical issues involved in defining and measuring poverty and in setting standards for assistance programmes. We were very aware of the importance of the poverty measure, which serves as a key social indicator and also determines eligibility for benefits for many government assistance programs. We were also cognizant of the intense interest in the poverty measure among the policy and research communities.

Our recommendation is to retain the basic notion of poverty as material deprivation, but to use a 
evised concept for setting a threshold and a revised definition of the resources to be compared with the threshold to determine if a family or individual is or is not in poverty. Equally importantly, we recommend procedures for devising an equivalent poverty threshold for families of different sizes and for families in different geographic locations and for updating the poverty threshold over time.

The current poverty measure has weaknesses both in the implementation of the threshold concept and in the definition of family resources. Changing social and economic conditions over the last three decades have made these weaknesses more obvious and more consequential. As a result, the current measure does not accurately reflect differences in poverty across population groups and across time. We conclude that it would be inadvisable to retain the current measure for the future.

But the panel concluded that it would not serve the public interest for our report simply to lay out the many possible alternatives to the current poverty measure or simply to call for more research on the topics where that might advance our knowledge or reduce the range of possible alternative. The current U.S. measure of poverty is demonstrably flowed judged by today's knowledge; it needs to be replaced. The panel believes that the measure recommended in our report is a significant improvement over that current measure, and we urge its adoption.

2.5 Recommendation: A New Poverty Measure

The official U.S. poverty thresholds should comprise a budget for the three basic categories of food, clothing, shelter (including utilities), and a small additional amount to allow for other needs (e.g., household supplies, personal care, and non-work-related transportation). Actual expenditure data should be used to develop a threshold for a reference family of four-two adults and two children. Each year, that threshold should be updated to reflect changes in spending on food, clothing, and shelter over the previous 3 years and then adjusted for different family types and geographic areas of the country. The resources of a family or individual that are compared with the appropriate threshold to determine poverty status should be consistently defined to include money and near-money disposable income: that is, resources should include most in-kind benefits and exclude taxes and certain other nondiscretionary expenses (e.g., work expenses).

2.6 Adjusting the Threshold

Given a poverty threshold for a reference family of two adults and two children, the next step is to develop appropriate thresholds for families with more and fewer members and different numbers of adults and children. We recommend that the reference family threshold be adjusted by means of an "equivalence scale" to determine thresholds for other family types. There is no consensus in the scientific literature on the precise form of an appropriate equivalence scale, although there is agreement on some properties of such a scale and that the scale implicit in the official poverty thresholds is flawed.

We recommend that the scale recognize that children under age 18 on average consume less than adults, but that the scale not further distinguish family members by age or other characteristics. We also recommend that the scale add a decreasing amount for each adult (or adult equivalent) family member to reflect economies of scale available to larger families, such as their ability to buy food and other items in bulk and jointly use many durable goods.

Evidence of cost-of-living differences among geographic areas-such as between metropolitan and nonmetropolitan areas-suggests that the poverty thresholds should be adjusted accordingly, but inadequate data make it difficult to determine appropriate adjustments. As a first and partial step, we recommend that the housing component of the poverty thresholds be indexed to reflect variations in housing costs across the country. This adjustment can be made by analyzing decennial census data with the methodology developed by the U.S. Department of Housing and Urban Development (HUD) to estimate rents for comparable apartments in different localities. We believe that available data support reasonable adjustments for several population size groups of metropolitan areas within each of nine regions of the country. The resulting geographic index should be applied to the housing component of the thresholds. It may also be possible to update the index values each year (rather than at 10-year intervals) by applying the updating methods used by HUD.

We do not recommend adjustments for other budget items at this time because good data for such adjustments are lacking and because the available research suggests that variations in the costs of other budget items are not large. However, more research would be very helpful to develop refined methods and data by which to adjust the poverty thresholds more accurately for geographic cost-of-living differences for housing and other goods and services. Once source of improved data could be the area price index program of the Bureau of Labor Statistics (BLS).

2.7 Defining Family Resources

It is important that family resources are defined consistently with the threshold concept in any poverty measure. The current measure violates this principle, as has some recent work to investigate alternatives. Examples are measures that add the value of public and private health insurance benefits to families' resources without adjusting the thresholds to account for medical care needs. Such measures should be discontinued.

For consistency, we recommend that family resources be defined as money and near-money disposable income. More precisely, the definition should include money income from all sources, as well as the value of such in-kind benefits as food stamps and public housing. It should exclude out-of-pocket medical care expenditures, including health insurance premiums; income and payroll taxes; child care and other work-related expenses; and child support payments to another household. The child care deduction should be capped and apply only to families in which there is no adult at home to provide the care; the deduction for other work expenses should be a flat amount per week worked.

We believe that is widespread agreement among researchers about the appropriateness of such adjustments to income as deducting taxes and work expenses, which are a cost of earning income and cannot be used for consumption, and about adding the value of in-kind benefits that support consumption. The only important area of disagreement concerns medical care benefits.

Trying to account for private and public medical insurance benefits-important as they clearly are-in the same way as in-kind benefits for such items as food and housing would greatly complicate the poverty measure and cloud its interpretation. A chief reason is the wide variation in health care needs among the population: Some people have high medical costs; some have non. Hence, the proposed poverty measure does not include an allowance for medical expenses, either those that might be covered by insurance or paid for out of pocket; for consistency, the proposed resource definition does not add the value of health insurance. Also for consistency, the proposed definition subtracts out-of-pocket medical care expenses from income: even with insurance, many people must pay out of pocket to obtain that insurance or to receive care, and such expenses reduce disposable income.

Although the proposed poverty measure excludes medical care from both the thresholds and resources, it will reflect changes in health care policy that affect disposable income. for example, if changes in health care financing reduce out-of-pocket medical expenditures and thereby free up resources for food, housing, and other consumption, the proposed measure will show a lower poverty rate; the current measure would not show this effect. We also recommend that appropriate agencies develop direct indicators of the extent to which families lack or have inadequate health insurance that puts them at risk of not being able to afford needed treatment. These "medical care risk" measures should be cross tabulated with but kept separate from the economic poverty measure.

2.8 Poverty Thresholds

Preliminary Estimate of Poverty Thresholds in 1996

 
These average poverty thresholds were derived by increasing the 1995 thresholds by a factor of 1.02952 which reflects the percent change in the average annual Consumer Price Index between 1995 and 1996. These estimates may differ by a few dollars from the thresholds that will be published in the final report on the 1996 poverty population.

If you have any questions concerning these poverty thresholds please call (301) 763-8578

Source: U.S. Bureau of the Census

THE HHS POVERTY GUIDELINES

One Version of the [U.S.] Federal Poverty Measure

There are two slightly different versions of the federal poverty measure:

• the poverty thresholds
  
• the poverty guidelines

See below for sources to contact for further information.

The poverty thresholds are the original version of the federal poverty measure. They are updated each year by the Census Bureau (although they were originally developed by Mollie Orshansky of the Social Security Administration). The thresholds are used mainly for statistical purposes--for instance, determining financial eligibility for certain federal programs.

1997 HHS POVERTY GUIDELINES

SOURCE: Federal Register, Vol. 62, No. 46, March 10, 1997, pp. 10856-10859

The separate poverty guidelines for Alaska and Hawaii reflect Office of Economic Opportunity administrative practice beginning in the 1966-1970 period. Note that the poverty thresholds--the original version of the poverty measure--have never had separate figures for Alaska and Hawaii.

Programs using the guidelines (or percentage multiples of the guidelines--for instance, 130 percent of the guidelines) in determining eligibility include Head Start, the Food Stamp Program, the National School Lunch Program, and the Low-Income Home Energy Assistance Program. Note that in general, public assistance programs (Aid to Families with Dependent Children and its block grant successor, and Supplemental Security Income) do NOT use the poverty guidelines in determining eligibility.

The poverty guidelines (unlike the poverty thresholds) are designated by the year in which they are issued. For instance, the guidelines issued in March 1997 are designated the 1997 poverty guidelines. However, the 1997 HHS poverty guidelines only reflect price changes through calendar year 1996; accordingly, they are approximately equal to the Census Bureau poverty thresholds for calendar year 1996. (The 1996 thresholds will be issued in final form about September or October 1997; a preliminary version of the 1996 thresholds is now available from the Census Bureau.)

The poverty guidelines are some times loosely referred to as the "federal poverty level", but that term is ambiguous, and should be avoided in situations (e.g., legislative or administrative) where precision is important.

Poverty guidelines for recent years for the 48 contiguous states and the District of Columbia can be calculated by addition using the figures shown below:

However, note that this simple calculation procedure does NOT reflect the procedure by which the poverty thresholds were originally developed or the procedure by which the poverty guidelines are calculated from the poverty thresholds each year. 

3. Poverty Situation of the British Virgin Islands

3.1 An Overview

Poverty alleviation/eradication has crept to the forefront of the agenda of most, if not all, countries. The emphasis of development has now taken a turn to include the social aspects of development rather than just concentrating on the economic side of the process. It is contended that human development translates into economic development. It is argued, and rightfully so, that if individuals are contented, educated and healthy they could be more innovative and productive and therefore contribute more to the development process. It is in this light that the formula "Social Development + Economic Development = Total Development" is conceived. If the objective is total development, then more strides can be taken towards poverty alleviation/eradication. It is not enough to just have an inflated Gross Domestic Product (GDP) and a high Per Capita Income (PCI) since evidence has shown that the achievement of these does not necessarily imply better social conditions. Such was the case of the oil-rich Arab countries that had bulging PCIs while social conditions bordered deplorable.

Since indicators like GDP and PCI only show the economic picture, it has been recommended that a more appropriate indication of total development is the "Human Development Index (HDI)" since this measure takes into consideration (i) longevity (life expectancy at birth), (ii) knowledge (literacy rate) and (iii) GDP and PCI. Such an index, however has not to date been constructed for the British Virgin Islands.

3.2 Socio-Economic Setting:


The British Virgin Islands still remains a British dependent territory. The population of the country presently lies between 18,000 and 19,000. The nationality composition of this population is about 50% nationals and 50% expatriates. The sex ratio stands at 105.

Since 1980 the population has been increasing at an annual average growth rate of about 4%; a relatively high growth rate. However, more than 65% of this population growth is attributable to migration.

In 1992, the Crude Birth and Death rates were quite low, recorded at levels of 17.1 and 5.4 births and deaths per thousand population respectively. These low rates would seem to imply that the British Virgin Islands might well have already undergone its "Demographic Transition". The Total Fertility Rate (TFR) of the country hovers just above the replacement level of 2.1 births per woman of childbearing age. Life Expectancy at Birth is 70 plus for both male and female. Enrollment rates at the primary and secondary levels were 85.6 and 72.0 respectively. The literacy rate for females was 98.5% and 97.7% for males in 1991. The unemployment rate of the British Virgin Islands was between 3% 4% in 1991.

3.3 Economic Setting:

The British Virgin Islands has a service economy and thrives on a vibrant tourism sector and the rapid emergence and development of offshore activities - namely the registration of International Business Companies (IBCs). The contribution of Agriculture to GDP amounts to a mere 4%; an indication of the unimportant role this sector plays in the development of the country. PCI which is the most widely used indicator of the wealth of a country is estimated to be presently in excess of USD 10,000; a PCI which is considered high by any standards. However, some caution should be exercised when considering this PCI. This measure is derived from the quotient of the total output of goods and services and the total population (at a given point in time). Given the nature of the economy of the British Virgin Islands and the number of International Businesses operating in the country, there would obviously be a significant repatriation of profits out of the country. Also, since there is such a high percentage of expatriates present, it is expected that migrant transfers would be considerable. As of 1991, there were over 5,000 offspring to expatriate women still living outside the British Virgin Islands. Albeit that these factors do not affect total output in the country, they however would serve to reduce the PCI.

The Consumer Price Index (CPI) of the country has March 1985 as its base. The index has moved from 100 at its base to 133.7 in March 1993, indicating an increase in the cost at a simple annual average of 4.2% per annum. The cost of living conditions of the country are driven by those in the USA and territories since the bulk of imports are from these origins. The British Virgin Islands imports practically everything it consumes.

3.4 The Situation:

Poverty Profile of the British Virgin Islands:

Poverty can be defined as the inability of individuals/households to afford the basic necessities that are essentials for a comfortable existence. This definition implies that a certain level of income would have to be attained and maintained so as to avoid the discomforts associated with poverty. Therefore, before a poverty profile could be attempted, a "poverty line” would have to be determined. This line would represent a threshold beneath which individuals/households would not be able to provide the basic necessities and therefore be deemed as poor. 

The poverty line can be arrived at using two approaches; (i) an "absolute" poverty lines approach and (ii) a "relative poverty" line approach. The absolute approach is mostly employed by developing countries and is based on expenditure and nutrition data. The relative approach, which is preferred by developed countries, on the other hand, constructs the poverty line based on income data solely. The foible of this approach is that it could tantamount to an analysis that addresses the issue of income inequality rather than one of poverty. However, in the absence of expenditure and nutrition data, a poverty line of the British Virgin Islands for 1991 was determined using the relative approaches and was calculated at USD 310.00 per household per month. Using this average household income level to represent the poverty threshold, 17.7% of all household in the British Virgin Islands were considered to be in poverty. However, the limitations of the data as outlined in footnote #3 should be carefully considered when doing any poverty analysis of the outcome.

A Poverty Profile decomposes poverty and sheds light on its intensity "amongst" and "within" the different locations, living arrangements and other socio-economic characteristics of individuals/households. The household however, will be the unit of measure in this profile. 

A Poverty Profile is quite useful in isolating the segments of the population that are experiencing the highest incidence of poverty. Such segments can be then targeted for poverty alleviation/eradication. The amongst approach uncovers the incidence of poverty of the elements of the characteristic under consideration while the within approach reveals which elements of the characteristic contributes the most to poverty. The former approach should be compared with the national incidence of poverty while the latter should be compared to its corresponding contribution to total households.

Geographic Location:

Poverty is usually more concentrated and severe in rural or outlying areas. These areas are mostly agricultural in nature and therefore have markedly lower levels of income. As previously mentioned, agriculture plays a very nominal role in the development of the economy of the country. Given the small size of the country, the British Virgin Islands cannot be realistically assigned an urban-rural classification as this implies a physical disconnection of both areas. This is not the case here because of the close proximity of all other areas to the capital. Therefore, a more practical geographic breakdown would be one into "Capital" and "Other Areas". In the British Virgin Islands, 32.3% and 67.7% of the households are concentrated in the Capital and Other Areas respectively

It was shown in a poverty study of the British Virgin Islands in 1991 that there was indeed a slightly higher incidence of poverty in these other areas and that they contribute more than 70% to all poverty. This situation however may not be directly attributable to the location of these areas per say since most persons residing in them are employed in the capital and commute on a daily basis.

Family Constitution:

Single Headed households with child/ren are the most prone to poverty since they have dependents but normally only command income from one source. In the British Virgin Islands, Single Households account for 25.6%, Nuclear Families for 35.9% Single Heads with child/ren for 10.1% and Other Types for 28.4% of the households.

In the study, Single Headed Households with Children indicated the highest incidence of poverty of all the Family Type Constitutions. While over 33% of them were below the poverty line, these households, as previously mentioned, contributed only about 15% to the total poor households. Over 90% of these Single Headed Households with Children were headed by women. And expectedly, most single female headed households with children would benefit from remittances and child support monies. These sources of incomes were not included in the study. Of the Single Headed Households with One Child, 17.6% of them fell below the poverty threshold.

Access to Land:

Households that are landless generally are those that are amongst the poorest in a society. But this situation normally prevails in societies where agriculture plays a significant role in the development of the society's economy. However unlike these agricultural societies, land in the British Virgin Islands is used primarily for housing and other forms of structural development rather than Agriculture. The nature of the economy was previously outlined. Of all households, 59.7% are Landless, 36.1% are Freeholders and 4.1% had Other Land Arrangements.

Since, as was earlier indicated, agriculture plays such a small role in the development of the territory, it is not surprising that in the study only 13.6% of the landless fell blow the poverty line while on the other hand 22.9% of Freeholders were considered as poor. This higher incidence of poverty among the Freeholders can be traced to the non-capture of the other sources of income not resulting from formal employment. Freeholders, in many instances, would derive income from the renting of property especially.

It was uncovered that elderly persons (65 years and over) headed over 80% of these Freeholder households. These elderly-headed households amounted to about 12% of all households. These heads of households would have already reached retirement age and therefore would be among the economically inactive segment of the population. Their sources of income would then not be of a formal nature but rather would be from remittances, pensions and other income sources. And it is iterated that these incomes were not covered in the study.

Access to Housing:

There is an obvious link between housing and land ownership. Households with their own land would likely have their own houses. In the British Virgin Islands, all households are housed in some sort of physical structure. The Full Private Households accounts for 43.6%, Partly Private Households for 7.0%, Apartments for 45.9%, and Other Dwellings for 3.6%. Households that owned the dwelling in which they lived amounted to 40.3%, Private Rented to 52.4% and Others to 7.3%.

The study showed that the incidence of poverty was significantly higher for Full Private Households (22.2%) and Owned Dwelling (23.7%). It also showed that of the households headed by the elderly, 82.2% were Full Private and 86.3.% were Owned Dwelling. Here again, the sources of income of these households would be from remittances, pensions and other sources. Over 98% of all households in the British Virgin Islands are constructed of wood, concrete or a combination of both.

Basic Necessities:

Poverty is always characterised by the absence of and the inability to secure the basic necessities. These basic necessities are essential for households to be exposed to acceptable hygienic conditions. The lack of these basic necessities has serious implication for the health of households. All households in the British Virgin Islands have access to water and less than 1% has no toilet facilities. Almost 98% have electricity and 97.3% cook on electric or gas ranges. About 98% of these households have indoor kitchens.

Of households with Private Water Catchments, it was shown by the study that 22.8% of them had average incomes that fell below that which represents the poverty line. These households however, would be privately owned and therefore the reason for this high incidence of poverty. Over 30% of households with no toilet were recorded as poor. These households however contributed only 1.4% to total poverty in the country. Of households that used lighting other than electricity, 40.2% of them were below the poverty threshold but then they only contributed 5.5% to total poverty and they only amounted to 2.2% of all households. Those households that cooked on coal and other sources of energy had substantially high percentages below the poverty line but then, on the other hand, collectively accounted for just 2.7% of all households and were only 1.9% of the poor ones. Households with outdoor kitchen had 30.4% poor but were only 2.2% of all households.

Amenities:

Households that are poor have a tendency to lack amenities such as Radios, Televisions, Videos and Telephones. There are 94.6%, 87.5% and 52.2% and 69.3% of households in the British Virgin Islands with Radios, Televisions, Videos and Telephones respectively. The study showed that all households without these amenities had levels of poverty that exceeded the national incidence of 17.7%. In the case of the Videos, the absence of this amenity from households does not appear to be based on affordability but rather on choice since a large percentage (44.7%) of the non-poor households were also without them.

Overcrowding:

In poverty stricken households, the phenomenon of overcrowding is prevalent. Overcrowding is said to exist when there are 4 or more persons to a bedroom. As per the study, 1.4% of household in the British Virgin Islands fell into this situation and that 25.3% of these overcrowded households were poor. Just over 1% of households reported having no bedrooms.

Dependency Burden :

There is a strong positive correlation between number of Dependency Burdens in a household and the poverty level of the household; i.e. as one increases the other also tends to increase. In the British Virgin Islands there are 51.0%, 83.3% of households with no Young and Old Dependency Burdens respectively. 

In the study those households with 2 or more Young and Old dependency burdens amounted to 16.6% and 8.7% respectively. Of household with 2 or more burdens, the incidence of poverty for those with Young dependents was 70.8% and those with Old dependents was 93.3%.

Age Composition and Gender:

Households headed by elderly persons and females are traditionally more prone to poverty since the former would most likely be economically inactive and therefore would be dependent on pensions and remittances while the latter normally earn on average smaller salaries than their male counterparts. In the British Virgin Islands, about 12% of households are headed by the elderly and 28.7% by females. 

Of the household headed by the elderly, the study revealed that 48.5% of them fell below the poverty line. An explanation, however, with respect to the source of income of the elderly was previously afforded. Of households headed by elderly persons, about 36% reported no formal income and these accounted for almost 55% of all households that reported no formal income. Just over 24% of households headed by females were below the established poverty threshold. Over 60% of these female headed households were by females who were Single (without a live in partner) and almost 60% of these Single Female households had a child or children on board.

Nationality Status:

The nationality composition of the British Virgin Islands is almost "50-50", i.e. 50% Nationals and 50% Expatriates. This composition is a peculiar one and is a result of a continuing influx of immigrants seeking work. And, this trend is expected to continue as long as the British Virgin Islands continues to develop because the importation of labor would be inevitable if the labor market is to be satiated. Much of this imported labor is to satisfy the Construction and Services sectors. Many of the immigrants employed in these sectors are at low level occupations such as domestic workers and laborers. And these types of occupations command low incomes that are commensurate. These low incomes would render Expatriates more vulnerable to poverty than Nationals. Over 60% of the total households were headed by Expatriates.

The poverty study done in 1991 indicated that Nationals suffered a higher incidence of poverty than Expatriates. Over 21% of households headed by Nationals fell below the poverty line. Just over 15% of household headed by Expatriates found themselves in the same dilemma. Households accommodating all Nationals and all Expatriates were at poverty levels of 24.1% and 11.7% respectively. This revelation can be a bit surprising and therefore needs to be explained and clarified. Expatriates immigrate with the intention to be employed and most likely will be employed. Such employment also would most likely be in the formal sector. Therefore the income sources of the majority of Expatriates would be included in the income data used in this study. Nationals on the other hand, could possibly have a significant concentration of labor in the informal sector - and such income data is not captured. Another explanation could be that 23.1% of the households headed by nationals had elderly heads. This compares to 4.6% for expatriates. Also, over 30% of the national heads were females. The extent to which income for these two individual segments of the household population was excluded has already, on more than one occasion in this overview, been outlined. 

Education & Training:

Education and Training are two of the more important elements of human development. The extent to which these elements are obtained determines the level of employment that can be secured by and ultimately the income status of an individual. And, one's income status determines their poverty status since being able to afford the basic necessities depends on the income level. As was earlier indicated, the British Virgin Islands has literacy rates, for both males and females that are in the high 90 percents. 

The study showed that 22.4% of households with no persons Highly Educated were poor. It also showed that when the head had No and Primary Education, 38.7% and 22.9% of them respectively fell below the poverty threshold. Households, in which all persons or the head had No Additional Training, had a much higher incidence of poverty than their Additionally Trained counterparts. Again, just over 82% of elderly household heads had secured only primary or below education levels. About 44% of female heads were also educated only up to these low levels.

Employment Status:

Persons who are Unemployed or Underemployed8 would be most vulnerable and susceptible to poverty since they would command no or low incomes. In the British Virgin Islands there are 9.6%, and 9.1% of households with all persons Unemployed and Underemployed respectively. 

It was indicated in the study that of households with all persons Unemployed and Underemployed, 77.8% and 21.6% of them respectively fell below the poverty line. The study also showed that heads that were either employed by Government or in the Private Sector were at poverty levels well below the national incidence of 17.7%. The households with Unemployed and Inactive heads showed poverty levels of 73.2% and 63.9% respectively. However, 57.6% of the household heads that were either Unemployed or Inactive were elderly persons while 43.7% of them were females.

Occupation:

High incomes are associated with High Skilled Occupations . Low Skilled Workers would therefore be more prone to poverty since they would be remunerated at lower income levels. These Low Skilled Workers would be concentrated in occupations such as Farming/Fishing and Elementary occupations. In the British Virgin Islands, over 57% of households have all Low Skilled Workers. Just over 5% of all households were headed by Farmers/Fishermen and 14.2% by the Elementary occupied. 

The study showed that, of households headed by Farmers/Fisherman, 33.7% of them fell below the threshold of poverty while, of those headed by Elementary Workers, 26.7% of them suffered the same fate.

As was earlier outlined, Tourism is a very indispensable factor in the development of the British Virgin Islands' economy. Over 52% of all heads of households’ occupations are in one way or another dependent on Tourism. Nearly 66% of all households had one or more persons in occupations that are dependent on it. 

In the study it was found that households that were not involved in Tourism-Dependent Occupations experienced markedly higher poverty levels than those that were involved.

Sectoral Concentration:

Sectoral concentration is an important consideration in the study of poverty since some sector has higher income yields that others. Traditionally, the Agriculture/Fishing sector has the lowest income yield and therefore it is expected that the poor would be more prevalent in this sector. In the British Virgin Islands, there are 1.2% of households with all members employed in this sector while 3.9% of heads of households are employed in it. 

The study showed that of households with all persons employed in the Agriculture/Fishing sector, 31.7% of them were poor while households headed by persons employed in this sector showed a 38.2% incidence of poverty.

3.5 Conclusions:

Based on this overview of the poverty situation in the British Virgin Islands, it can be concluded that the situation is not a dire one. Because despite the high poverty line of USD 310.00 per household per month used in the study, only 17.7% of households fell below the established line. Throughout this overview, the shortcomings associated with the income data were mentioned. And, it was found that households headed by persons affected by these shortcomings were more apt to be poor. For example, households headed by elderly persons suffered the highest incidence of poverty. But a closer look at these heads revealed that they possessed considerable assets. Most of them had their own house and land. The majority of households in the British Virgin Islands had access to the basic facilities and amenities.

The conclusion is that poverty is not an area of priority concern in the British Virgin Islands because households, despite their characteristics, were not deprived of any of the basic necessities whether they fell below the established poverty threshold or not. This is a clear indication that all income sources were not captured in the study, and this was iterated over and over again in this overview. In this light, a distorted picture of the poverty situation would be portrayed because of this under-representation of income in the data. It is therefore recommended that another poverty analysis be done taking into consideration expenditure data and all income sources such that the true poverty situation of the British Virgin Islands could be delineated.


Table 1: Social Characteristics by Incidence of and Contribution to Poverty and Percentage of Households in the British Virgin Islands

 Table 1: Cont’d: Social Characteristics by Incidence of and Contribution to Poverty and Percentage of Households in the British Virgin Islands.

 Table 2: Economic Characteristics by Incidence of and Contribution to Poverty and Percentage of Households in the British Virgin Islands.

   
4. Problems/Constraints/Issues

4.1 Administrative, Legal and Management

Like in most industrial and development countries the definition, measurement and the management of poverty encompasses many administrative, legal and management issues. Although, admittedly, poverty is traditional sense occurs less frequently in the British Virgin Islands, census figure connected with per capita family incomes suggest that there might targetted or small pockets of poverty in certain population groups such as single women with children, immigrant women and the elderly.

Traditionally poverty was seen, as persons with inadequate family incomes for needed consumption and other goods and services. Viewing poverty in this way created what is known as the “poverty line” – a level of income below which families were targetted for government/public assistance. This approach has many shortcomings given that it does not change with the dynamics of the society as it changes presumably only to the extent that incomes change. Poverty has been defined closer to indicate the impact of government policies on the poor.

In the British Virgin Islands the Governmental response to people who are considered to be poor is through the Department of Social Development and it is concentrated on the poorest of the poor. The administrative issues associated with poverty are driven by the fact that there has been sustained economic activity equaling full employment for both nationals and non-nationals. This in turn has led to the absence of a comprehensive social policy especially related to poverty its peripheral issues. The Administrative arrangements in place to address poverty as a socio-economic phenomenon are woefully inadequate as they seek only to deal with indigents on a family income basis. In fact there are no poverty lines established as qualifying criteria for assistance.

In addition to the lack of capacity of the administrative arrangements to determine the economic parameters of poverty the present departmental arrangement is lacking in skilled manpower to evaluate changing economic circumstances. Administrative efforts are further hampered by the absence of a comprehensive legal framework detailing entitlement criteria, distribution procedures for benefits and thorough guidelines for administrators to ensure that policies to alleviate and eradicate poverty are implemented. The absence of a comprehensive legal framework is not surprising given the absence a clear policy welfare of which poverty would be a sub-set.

The legislation concentrates on indigents and in fact through related legislation such as the Immigration and Labour Acts excludes non-belongers from a substantial proportion of the benefits, which would targeted at the poor. In our poverty profile immigrant women with dependent were identified as a population group with a noticeable number of poor. The issue for serious consideration is the presence of BVI born children who will qualify for citizenship within 5-10 year in the immigrant women households. Legislation such as the British Nationality Act and our BVI Immigration Act work independent but have the effect of excluding a substantial portion of the population that are poor and potentially poor from receiving benefits. 

The legal framework must seek to define poverty in an adequate way to ensure that proposed strategies attack the core of the problem and not blame it totality on the attributes of the individuals that are in poverty. Legislation now as it stands does not official measure poverty it simply provides the enabling conditions for payment of periodic grants/stipends etc. The present legislation does not seek to update poverty thresholds one they have been established this means that poverty with continue for some time to come.

4.2 Social and Economic

The fast rate of economic growth has placed an undue burden on the weak social sector institutional infrastructure accumulated over time to cater for a much smaller and less diverse population. Economic opportunities has created jobs in an environment of shortages of skilled and unskilled labour necessitating importation of labour from various regional and international sources. The importation of labour has brought diverse cultures, traditions and norms of the various sources of labour. The low skilled down required and accepted immigrants of marginal economic standing and so they were unable to afford the standards of housing and amenities prevalent in the British Virgin Islands. Immigrants came with dependent both single and married.

Poverty, as defined in terms of household income and required household expenditure for an average family in BVI, is found among single immigrant women with dependent children and elderly British Virgin Islanders who have no income from employment entrepreneurial activities or investments. By not having cash or substantial benefit incomes other than from the BVISSB, these socio-economic groups find themselves not be able to access the Basis Social Services (BSS) including health care, education, job training etc.

In terms of the immigrant women with dependent children (some of which are fathered by BVIslanders) the issue becomes complicated by immigration and labour laws requiring non-belongers to be gainfully employed and precluding their qualification for the receipt of general welfare benefits through the Social Development Department. Given that all these persons are generally employed in low skilled positions, the question is whether these persons could not be considered as working poor. If there are persons in the working poor category, this suggest that our minimum wage or the wage levels paid for the lowest skilled workers are inadequate to maintain them and their families. In the case where family support financial resources are not available to non-belongers and the lower level skilled wages are inadequate to cover minimum levels of household expenditure, the system is creating working poor and leading families into a cycle of poverty for generations to come. This is a most serious socio-economic situation in that the system of government is facilitating the creation of class of working poor among traditionally vulnerable groups – women and children.

The above situation has been created through the interaction of a number of policy measures in the areas of labour, immigration, employment and welfare. Clearly this situation has come out the lack of foresight into the socio-economic impact of the integration of policy measures. Economic opportunities led to the import of immigrant women to work for industry wages that does not allow them to cover minimum household expenditure and access Basic Social Services in a satisfactory way. If this situation is allowed to proceed unaddressed, it is not difficult to predict serious social and economic consequences in the next decade with the next generations. Clearly at some point poverty among women and children immigrants must be addressed in a comprehensive to break the chain of poverty.

The group generally affected by poverty was elderly British Virgin Islanders who did not qualify for BVISSB grants because they had no tenure either because of self-employment or the age of the scheme. However, it is accepted that a number of these elderly persons are cash poor but holds assets such as undivided real estate and their dwellings. Since these persons are elderly it is expected that access to health care is most critical. The public health care system provides free access to services but there is no formal system to finance access to privately provided services. In addition, the undivided family real estate of little help since the elderly are not able to use these properties to acquire through sale, lease or other encumbrances. The convention is that these elderly persons have relied on relatives to contribute cash and in-kind to assist with their meeting of their monthly quantum necessary of household expenditures. While it is acknowledged that some of these elderly persons are recipients of small welfare grants, it is well known that it is generally insufficient to ensure enough cash to cover expected minimum monthly household expenditure. Of course these elderly persons cannot use their undivided property because in most instances they do not have access to cash to cover the legal services necessary to divide the property. In any case their properties are tied up in the court system for generally between 7-10 years before legal settlement is realized. The situations are normally complicated by many of their relatives being resident outside of the BVI reducing the usually small chances of accomplishing a negotiated settlement.

The above information suggest that policy measures of government contributes to the targeted poverty existing in the vulnerable groups such as immigrant women with dependent children and elderly belongers. The poverty evident in the former group appears to be a direct result of government social and economic policies related to immigration, labour, employment and social welfare. The cash poverty witnessed in the elderly is a result of more complex phenomena involving more moral issues. However, it appears that government is in a position to address these issues in an integrated and comprehensive fashion.

4.3 Demographic Issues

Based on 1991 census figures, projection of the poor population is expected to increase from 7.3% to 9.3% of the total population. Figures also project that the number of persons heading poor households which amounts to 60.7% of all poor will increase to 62.0% by the end of 2000. Population projections on the poor also indicate that the elderly will account for 64.3% of all new additions to the rolls. This development is so because our population is aging at a faster rate than we are receiving newborn. Our population is aging because people are living longer because of better health promotion, awareness and care. Medical technology is playing a significant role in extending the expected life.

Estimated number of poor single women and elderly heading households
and the number of persons living in these households, 1991, 1996-2000

The above table suggests while the elderly poor population will grow at a faster rate, the single women headed households will grow at a slower rate. These households will have a number young and school-age children present making the situation that much more crucial. The number of poor persons are expected to growth at around 54.0% while the total population should grow by about 21.2%. Clearly this is a situation that must command urgent, targeted and comprehensive attention.

5. Needs

In view of the complexity of the subject and its wide-ranging sectoral linkages it seemed appropriate to break out needs according to administrative, legal and financial categories to ensure that project is addressed in a comprehensive fashion. Identifying needs in this way would assist in development of policies, strategies and programmes to address the alleviation and reduction of poverty in the British Virgin Islands.

5.1 Administrative and Management

The first priority has to be for us as country to gain a fully appreciation and understanding of what is poverty in the context of the British Virgin Islands. This can only be achieved through a scientific study of the dimensions of poverty. A thorough analysis of how we have come to this point must be undertaken so that we might take an inventory of our present situation. This study must seek to understand who are the poor? Why they are poor? And seek to predict who are likely to become poor in future and why.

We need to be aware of the present responses government, NGO sector and private sector have come up with to addressed the poverty situation in BVI. This understanding must include our official definition and recognition of poverty. Another critical need is for us to understand the management of the institutions and programme that were employed in an attempt to deal effectively with poverty as a national obligation on the part of government. There is the need to able, from an assessment of the persons assisted, determine whether the measures and programmes pursued were effective, and if so to what extent. There is the need to determine whether people in poverty were empowered sufficiently to assist them to advance off the poverty rolls and into productive persons able to make financial contributions to the running of the state..

Another need which demands priority attention is the establishment of a comprehensive and integrated framework under which poverty and its peripheral issues can be addressed in a meaningful way. The integrated legal framework must put in place institutional arrangement capable of managing poverty across all agencies, departments and ministries of Government as well as the various organizations of the profit/non-for-profit and non-Government Organizations sectors.

The legal framework must provide for the recognition and precise definition of poverty in addition to defining the qualification criteria of persons seeking relief. The legal framework should also provide for the definition, as much as practicable, of the roles and responsibilities of the various actors in the national effort to address poverty. There must be clear delineation of authority as well the development of an Approach Protocol spelling out the procedures in responding to application for relief.

As much as possible, the legal framework should place data collection, analysis and reporting responsibilities on the various national actor agencies both public and private. However, it is critical that privacy and confidentiality provided for under other statues or deemed essential be protected under a new comprehensive and integrated legal framework.

6. Polices, and Strategies and Measures

Sustainable poverty reduction must be the overarching objective if strategy is to be worthwhile. Since the complete range of programs and policies affect the well being of the poor, there are many complementarities between poverty reduction and other operational priorities. Private sector development, for example, promotes growth and income-earning opportunities for the poor. This would place less of the burden on the public sector to support the poor through the safety net provisions. The burden of poverty falls disproportionately on women; so it is essential to increase their income-earning opportunities, their food security, and their access to social services. Maintaining the environment is critical if gains in poverty reduction are to be sustained and if future increases in poverty are to be avoided. If poverty reduction is to be sustainable, institution building and investing in local capacity to assess poverty and to analyze, design, implement, and finance programs and projects are essential. Therefore the reduction of poverty is linked to all developmental activities and priorities dictating a simultaneous rather than sequential approach.

Such analyses also contribute to the development of country institutional framework for poverty reduction and strategies to build institutional capacity to analyze poverty and to design interventions to reduce it. These analyses add to the cost of interventions, but they improve policy, project, and program design and sustainability, and reduce failure risks. Activities such as these are to be considered as investments in human resources development and should therefore form the core of the poverty strategy.

The reviews examine the equity, efficiency, and effectiveness of spending plans in the context of the macroeconomic framework and sectoral strategy. They serve as a basis for determining whether additional resource mobilization efforts, including higher levels of taxation, are needed. They note possible imbalances between capital and recurrent spending and between support for basic versus more specialized services. They also note the impact of nonproductive expenditures, such as military expenditures, and nonproductive practices on poverty reduction. Public expenditure reviews analyze safety net program for cost effectiveness and coverage of target groups. In the context of economic adjustment, they address the impact of restructuring of public expenditures on the living conditions of poor households and on the design of affordable public expenditure programs to benefit the poor.

For example, in countries where poverty is narrowly concentrated, the analysis will clearly be more focused on the specific determinants of poverty and the design of targeted solutions than in countries where more widespread poverty indicates problems with the broader macroeconomic and sectoral policy framework.


6.1 Government and the Public Sector

Clear poverty, in the context of the BVI like in any other, is a complex phenomena on which many countries have not deployed an adequate amount of resources. An additional complicating factor is the presence of a number of immigrants among the ranks of the poor contrary to the spirit and content of immigration and labour laws. Certain census data suggests that a number of the dependents of the single parent households are illegitimate children of BVI males adding yet another moral consideration for policy action and enforcement of the law.

In view of the complex nature of and reasons for poverty, policy aimed at alleviating or reducing poverty must take all the complicating factor under consideration simultaneously to ensure that an integrated result is the outcome. However, it seems that the demographic factors are going to carry considerable weight in the development of policy. On the other hand, poverty related policies must also be consistent with overall development policy of improving and sustaining the quality of life for all British Virgin Islanders. Certainly, our policies in this area must keep within the letter and spirit of international conventions/conferences in respect of population (International Conference on Population and Development), human rights (European Convention on Human Rights), poverty (the World Social Summit) and unification of families (The UN Convention on the Unification of Families).

Whilst our policy must be developed around the principles of internationally accepted norms, principles and guidelines, our strategy must be practical and suitable for our domestic conditions. Firstly, we must ensure that our approach is integrated, comprehensive and targeted. In order to use our resources optimally our strategies must focus in on the pockets of poverty identified under section 5. Principal among our strategies must be continued broad based economic growth to generate efficient income-earning opportunities for those categories of persons identified as poor. Our economic strategies should therefore provide income earning opportunities of the type that single women with relatively low skills and retired agricultural workers/farmers could take advantage of.

However, though, improved access to education, nutrition, healthcare and other basic social services must be part and parcel of the strategy to alleviate poverty. But like in any overall strategy, some person will not be able to take advantage of the enabling opportunities provided or facilitated by government action. Therefore, strategies must include a safety net for the poorest and certainly the most vulnerable category such as the elderly farmers.

In the case of the BVI, where poverty is concentrated rather than dispersed or widespread, our policies, strategies and measures should focus on the specific determinants of poverty. Addressing strategies would have to be focused on those narrow groups but must be within the broader macroeconomic and sectoral policy framework associated with the areas linked to poverty.

In terms of strategies, the approach is summarized as follows: The broad approach would be to ensure that an enabling economic environment exists where those poor individuals can have an opportunity to increase their level of incomes through their own effort. Those individuals who are most vulnerable and unable to take advantage of enabling socio-economic conditions will be supported through social safety net measure. Additionally, investment will be made in evaluation systems, human resources development and the establishment of a legal framework including qualifications for benefits.

The measures that are to be undertaken are listed immediately below:

Development of a Legal Framework: Including the provision of laws and regulations guiding the definition, scope and response to poverty. This framework would clearly establish what is po