The
Development Planning Unit
Government of the British Virgin Islands

HIGHLIGHTS OF THE 2000 BUDGET

In the 2000 Budget Address entitled “Morning Breaks,” the Chief Minister extolled the achievements of the Government and people of the British Virgin Islands with respect to bringing about the advancement of the Territory. This “advancement” is due in part to various economic and social measures and programmes instituted by the local Government over the years. The bulk of which can be substantiated by government’s annual budget appropriation. Over the past three decades, the estimates of expenditure and revenue have increased significantly; and this is not only a reflection on the rising costs associated with the changing economic environment in the BVI, but a testament to the stability of the economy and the Government’s ability to finance it’s operations. The annual estimates reflect Government’s priorities mainly with respect to expenditure for the fiscal year.

For the year 2000, total recurrent expenditure is estimated at $128,987,800 and capital expenditure at $50,487,668. This, when compared to 1999 recurrent and capital estimates of $116,138,700 and $55,112,811 represents an 11% increase in recurrent expenditure and an 8.4% decrease in capital expenditure. Recurrent Revenue was estimated at $157,000,000, a 9.4% increase over 1999 revenue of $143,569,700. Total Government expenditure accounts for roughly 20% of GDP.

CURRENT BUDGET:
For the year 2000, Government expenditure (as given in the Budget) was focused along the following development themes: 

a) Improving governance by 
- making government work better for the people;
- creating good fiscal climate and building a viable public sector;
- strengthening law and order;

b) Improving the physical infrastructure
- building appropriate infrastructure;

c) Enhancing human capital by 
- assisting BVIslanders to acquire skills;
- and helping people to live longer healthier lives.

d) Attaining global competitiveness.
- Inserting the BVI in the World Community;
- Promoting the use of Science and Technology;

e) Ensure balanced development
- Build ordered and well-planned communities
- Ensure safe and well-protected communities

Recurrent budget is broken down into three (3) major areas of spending, Personal Emoluments, Other Charges and Special Expenditure. The following highlights those significant changes with respect to government departments, their programmes, projects and the relationship with overall national development policy objectives.

Personal Emoluments – total emoluments was estimated at $48,578,260 for 2000. It represents an overall increase of 13% over 1999 ($42,919,200) The largest departmental allotment was Hospital Services whose share ($5,536,900) accounts for approximately 11% of total emoluments. Incidentally the emoluments for Hospital Services in 2000 were increased by an estimated 33% over 1999 figures, owing mainly to additions to the medical staff as the territory prepares to upgrade medical facilities (hospital) and improve the quality of health services delivered to the territory. The largest increase, 88% came from the Legislative Council whose emoluments of $241,200 owing to increases in staff and members salaries; their1999 emolument allotment was $128,200. An increase of 43% in emoluments was also recorded for Public Works, as a result of increase in their technical (Architects, Engineers etc.) and some administrative staff, which can also be viewed as an indirect investment in the development physical infrastructure of the territory. 

Other Charges – total Other Charges was estimated at $77,060,940 in 2000, which represents an 8.5% increase over 1999 figures of $71,032,200. Within this category, the largest allotment went to the Chief Minister’s Office, whose share ($11,485,600) represents approximately 15% of total Other Charges. Within the Chief Minister’s Office major expenses as follows:

Annual subvention to the Tourist Board for promotional expenses- $6,000,000; Annual subvention to H. Lavity Stoutt Community College- $4,575,000 which includes provision of $75,000 towards Teacher Trainees programme) The largest increase under Other Charges was found in the Legislative Council. Here, charges of $2,840,700 represent a 58% increase over the 1999 appropriation of $1,801,500. The increase is due primarily to increases in allowances to Speaker and members; and a 100% increase in the Assistance Grants ($1,680.000) which is primarily used for minor projects, as submitted by elected members for infrastructure, education or social programmes etc., thus ensuring that development is balanced across communities and electoral districts. 

One other significant increase was also seen for the Customs Department, who having charges of $867,200 represents a 55% increase over 1999. The increase results from $200,000 appropriation to finance the Customs Reform project to effect the modernization and subsequent efficient operation of the department, both within the Public Sector and the public at large. The Caribbean Customs Law Enforcement Council (CCLEC) is conducting the project.

Special Expenditure: - with respect to this category, total estimated expenditure for 2000 was $3,348,6000, a 53% increase over 1999 figures of $2,187,300. Within this category proposed expenditure covered the full gamut of special government programmes, purchases etc. The largest appropriation, of $515,000 went to Financial Services which largely went towards expenses associated with the Hong Kong registry; as well as expenses for special conferences, workshops, seminars etc. on topics related to the Financial services, thus ensuring that the industry remains on the “cutting edge” with respect to changes in the industry. $500,000 was allocated to the Information Systems Unit, to computerize the schools and assist with the introduction of programme of instruction for students; as part of the overall drive to promote technology in the classroom and build a computer literate population.
$470,000 was allocated to the Deputy Governor’s Office of which largely went towards the cost of consultancy for the Public Sector Development Project ($295,000). This project is of high priority to the Government as it speaks to the reformation of the Civil Service by way of improving the quality of services delivered to the public. 

CAPITAL BUDGET

Capital expenditure is estimated at $50,487,668 of which $23,635,583 is from external sources; (Development Aid and Loans)and $26,852,085 from local financing. Capital estimates for 2000, reflect an 8.4% decrease in spending when compared to 1999’s estimates. The decrease is attributable mainly to the fact that there was no revote or unexpended funds (1999) included in the 2000 estimates, thereby bringing about an overall reduction in local funds for the execute projects. Major areas of capital spending slated for 2000 are as follows:

The financing of the Beef Island Airport project is expected to exceed some $50M in total expenditure over the next two years and will occupy a large share of the capital budget,. Although the project is located on the eastern end of Tortola, with respect to physical locale and capital works the majority share of physical development will be occurring in Road Town and its environs. There has also been a concerted effort to ensure balanced development not only within Tortola, but also across sister islands, i.e. Anegada, Virgin Gorda, and Jost Van Dyke. In Virgin Gorda, the development thrust has been focused towards providing adequate physical infrastructure and ensuring accessibility to government services. This is further evidenced by projects such as the road construction programme, the Bregado Flax Education Centre (roof), and the construction of Administration Building (Phase 2), all are slated to commence in 2000. In Jost Van Dyke, emphasis appears to have been placed on strengthening law and order. There are plans to construct a Police Station on the island, and the land acquisition phase of the project has been budgeted for 2000. The development thrust on the island of Anegada, appears to be along the same lines of that in Virgin Gorda; however water distribution appears to be a priority on this island. Work on establishing a potable water system has been budgeted for 2000.

POLICY

In addition to expenditure, some projects and programmes required major changes or reviews of policy, in order to effectively bring about the desired outcomes or objectives of the project or programme. Although some policy requirements were identified and incorporated into the overall structure of the project, others were the result of singular studies or reviews carried out as part of the pre-investment activities for a particular project. Some of the major policy-related measures and/or projects executed in 2000:

HEALTH:
The Health Care Strategy was completed by consultants, Hornagold and Hills . The strategy, which entailed a comprehensive review of existing health system, and existing practices, details the proposed re-organization of the BVI Health Care sector. It contains recommendations that will include changes to existing policy as well as introduction of new policies on standards of health care, types of care, etc. as well as a functional programme for the New Hospital. The strategy i.e. health services will benefit the entire population and is viewed as major prerequisite to the execution of the New Hospital project, and thus is an important aspect of the overall development of quality health services in the BVI.

PUBLIC SECTOR:
The Public Sector Development Project, which commenced in 1999 and carried out by consultants Ernst and Young . Primary targets are the public servants and the project will entail major revisions to policies and even legislation etc. as it relates to the public servants and the execution of their duties. Recommendations will include the development of standards of service for Government departments and their employees. The overall objective of the initiative is to improve the quality (efficiency) of services provided within Government and to the general public.

AIRPORT:
Being that the Beef Island Airport Project has come on stream, the entire issue surrounding the operational aspect of the airport structure, once completed has surfaced. For this reason Government will engage consultants to review the existing airport management structure (includes Civil Aviation)and advise on policy, operational procedures and other related aspects necessary for the effective operation of the new facilities.

EDUCATION:
A comprehensive review of the first Five Year Educational Plan commenced in 1999 with assistance from local and external consultants and the support of the Caribbean Development Bank. The review is to be completed in 2000 and will include the review of policies and their effectiveness in terms of enabling the system to meet those objectives under the first plan. It will target the existing educational system with beneficiaries being the school-aged population and ultimately the entire population at large. It is expected that the review will advise with respect to charting a direction of the territory’s educational institutions at the primary, secondary and possibly tertiary levels; bearing in mind that the one of the principal objectives is to ensure that the education system is responsive to the changing needs of the economy, both on the domestic level and the global arena.

The preceding is a synopsis of Recurrent and Capital expenditure for the budget year 2000. As stated, the budget is reflective of Government’s priorities, and it is important that spending be carried out in accordance with the agreed developmental goals and objectives of the Territory, such as those outlined in this document and identified in planning documents and agreements. For example, the National Integrated Development Strategy, and Memorandum of Cooperation and Partnership. These development strategies span all sectors and were formulated in response to the economic and social needs and aspirations of the territory. Thus they are not static and lend themselves to continuous review as the changing political, social and economic environment warrants. Therefore as the “Morning Breaks” and the BVI looks toward the future, government spending, has become an important element in enabling public policy and ultimately, progress. This in turn is fundamental in equipping the territory to meet the challenges of the 21st century.

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