FINANCIAL PROTOCOLS FOR EFFECTIVE FINANCIAL MANAGEMENT
STATEMENT BY PREMIER AND MINISTER OF FINANCE
DR. THE HONOURABLE D. ORLANDO SMITH, OBE
SIXTH SITTING OF THE FIRST SESSION
OF THE SECOND HOUSE OF ASSEMBLY OF THE VIRGIN ISLANDS
Thursday 10 May, 2012
Madame Speaker, I would like to make a statement about the financial management of the British Virgin Islands.
As Honourable Members know, just two weeks ago on 23rd April we signed with Mr. Henry Bellingham, the United Kingdom Minister for the Overseas Territories, our Protocols for Effective Financial Management. This important agreement will help to set the Virgin Islands’ finances on a steady course for the future. Madam Speaker, I would like to take a few minutes to set out why I trust that the full Houses will welcome the Protocols and lend them their full support.
This excellent document illustrates a clear commitment by the Virgin Islands to manage our finances in a modern, transparent and planned way. It commits us to effective medium-term planning and to transparency; to more accurate measurement and reporting of our fiscal and economic data, to better value for money and to more effective management of risk.
Madam Speaker, there is an old saying that runs, “If you do not know where you are going, any road gets you there”. That is no way to run a Government. It cannot be the way of the BVI.
This document commits our Virgin Islands not only to thinking clearly about the goals we want to reach but to planning carefully how to attain these goals. Only through effective planning can we be sure we are using all our resources sensibly and in the most effective and efficient manner possible. In future, therefore, the Virgin Islands will include planning for the future as an integral part of how it operates. We will use recognised and accepted methods to make projections, and we will use those projections to investigate, develop and modify national policy.
Madam Speaker, the document also sets out the Government’s commitment to transparency. Not only will the Government take decisions transparently but it will also report regularly on its activities to the House of Assembly. Reporting will move beyond annual updates to include statements on our finances and our economy as well as other policy areas. This transparent approach will reassure Honourable Members, voters and investors alike that we are taking sensible, well planned measures for the advancement of our Territory.
Madam Speaker, in planning for the future, we need a good understanding of the situation as it stands now. This in turn depends on having trustworthy data. Another commitment within this document, therefore, is for the development of quantitative data that will give the Government a clear and objective picture not just of our fiscal situation but also of our economic position. This will lead to better-grounded policy development and better outcomes for the people of the Virgin Islands.
Madam Speaker, I am sure that all Honourable Members agree that every penny which our Government spends must be spent wisely. We must seek to maximize our resources as a matter of course. I am pleased to tell you, therefore, that the Protocols sets out the steps our Government will observe when procuring goods and services. In future, the Virgin Islands will act in line with international best practice in public procurement. As a result, the people of our Territory will gain renewed confidence that the purchasing decisions made by the Government are prudent and necessary and ensure best value for money. A further welcome aspect of the document before us today concerns the management of risk. Risk management is a fundamental aspect of good financial management.
In future, the Government of the Virgin Islands will ensure, first, that it keeps itself fully abreast of the nature and size of the fiscal risks it faces and, second, that it sets in place mechanisms to manage these risks prudently. Finally, to ensure the proper carrying out of the provisions of this agreement, the Public Finance Management Act will be strengthened. Madam Speaker, I trust that Honourable Members will welcome this agreement. It expresses a firm commitment by the Virgin Islands to observe the highest standards of governance, transparency and accountability to the people to whom we have dedicated ourselves publicly to serve.
It is my Government’s firm belief that any nation or Territory must be managed not just with imagination and creativity but also with rigour, prudence and transparency. Only in this way can we be sure to develop and implement policies that serve the best interest of all our people. And only in this way can we inspire confidence not just from our people here at home but from those overseas whose support we need and want.
The Protocols for Effective Financial Management give us an essential tool for the future. They reflect my Government’s determination to help this Territory step up a gear and to ensure that we continue to punch above our weight in an increasingly sophisticated and complex world. If our Virgin Islands are to evolve and advance, we must evolve and advance the systems we operate by. This is my Government’s philosophy.
With these Protocols, I am delighted to have the full support of the United Kingdom in putting this philosophy into practice. The Protocols are quite different from the original Framework for Fiscal Responsibility that was considered by the previous Government. The requirement to send our budget to the United Kingdom for approval is now a thing of the past.
The document before you is clear evidence of a more mature relationship between the Government of the Virgin Islands and the United Kingdom, one based on mutual understanding and respect. In short, the Protocols will play a vital role in helping us to establish where we want to go as a Territory and in choosing the right road to get there. They will equip the Virgin Islands to thrive in the national, regional and global environment. They will strengthen our ability to be responsible stewards of our own destiny. Madam Speaker, I commend the Protocols for Effective Financial Management to the House. Thank you.