The importance of education and the collaboration of the business community and local government working together were common themes heard throughout the one-day economic summit hosted by the St. Thomas-St. John Chamber of Commerce on Friday.
Community members from both the public and private sector came together to discuss key issues directly related to the local economy, with panels that focused specifically on doing business in the territory, rising crime levels and their effect on the community and the impact of the current economy on tourism.
Keynote speaker Warren Jestin, senior vice-president and chief economist at Scotia Bank, did not sugarcoat the economic outlook but did say, “The good news is that in the second half of the year there will be less bad news.” Jestin warned that no matter how strong the economy is, it is the global economy we have to be aware of and he predicts that it will be a fair bit of time before global activity can be called normal.
He also predicted that interest rates will continue to rise, increasing the cost of long-term borrowing, and the U.S. dollar will weaken. Looking at the long-term issues, Jestin stated that much of the growth in the global economy will come from emerging nations such as China and India, who are growing during good years and bad, and that by the year 2020 their influence on the world economy will be much more profound.
“This is a new world,” he said.
Emphasizing the need for an educational infrastructure in order to compete with emerging nations, Jestin stated that as the world economy gets older, skills shortages will be an issue. “We have always focused on university education, when skills training is actually more important,” he stated.
In response to a question posed by Sen. Louis P. Hill regarding ways that small island economies can protect their interests, Jestin said, “It boils down to collective cooperation.” In his studies of small economies, he found that the successful economies are those in which the community and the government are working together collectively. “Cooperation with other regions, the government, and the private sector,” said Jestin, “has to be the priority.”
The summit’s first panel focused on that very issue, with plenty of feedback from the community regarding the amount of time it takes local businesses to get anything done that involves government agencies.
Thomas B. Brunt III, president of the chamber and also of MSI Building Supplies, stated, “We need to drive the government to be more efficient when dealing with the private sector.” Sen. Craig W. Barshinger agreed, saying, “It is a big problem in the Virgin Islands. Management by measurement does not happen here.”
During the discussion regarding obstacles businesses face in the territory, and more specifically the arduous process involved with the Department of Licensing and Consumer Affairs, Hill informed the panel and audience that a bill set to come before the Legislature would eliminate the requirement of a tax clearance letter prior to a business license being issued, thus reducing the time involved in the licensing process. According to Hill, the Internal Revenue Bureau’s updated technology can now track this, making the clearance letter unnecessary. “Removing that requirement,” said Hill, “will allow businesses to stay in business and therefore be able to pay their taxes.”
Panel member Richard Berry, president of Leeward Islands Management Company, stated that his biggest challenge is competition from companies that are not based in the territory and therefore not required to pay gross receipts tax, giving them an advantage with regard to pricing. Brunt stated that businesses incorporated here in the territory are at a 10 percent disadvantage due to gross receipts tax. Both Berry and Brunt have also faced challenges due to new customs regulations, stating that delays in importation of goods have severely hampered their businesses.
The second panel discussed crime in the Virgin Islands and resources available to improve the crime situation, such as Crime Stoppers and Project Safe Neighborhood. Deputy Police Chief Dwayne DeGraff asked for more community involvement, stating, “The community has turned their backs on themselves.” That sentiment was echoed by Richard Doumeng, president of Bolongo Bay Resorts and vice-president of the USVI Hotel and Tourism Association, who said, “We live in a hear no evil, see no evil, speak no evil society.” He also stated that as long as we have a community that does not trust the police department, the police force will be discouraged.
The summit’s third panel discussed proposed revitalization plans for downtown Charlotte Amalie. Darryl Smalls, commissioner of the Department of Public Works, reviewed his department’s plans for improvements to the infrastructure and aesthetics of the waterfront road, fully funded with federal highway grants. Sebastiano Paiewonsky-Cassinelli of A.H. Riise Stores and a member of the chamber’s revitalization task force, presented alternate plans for the downtown area that incorporated all of the downtown areas, calling the Public Works plan an “engineering approach” and his an “urban revitalization" approach.
The final panel of the day centered on tourism, incorporating topics from the previous panels. Lisa Hamilton, president of HTA, told summit attendees, “We have to improve our product and improve our service in order to survive in the tourism industry.”
