Government & Economy

U.S. Virgin Islands

The U.S. Virgin Islands are an unincorporated territory of the United States, subject to U.S. laws. Virgin Islanders are U.S. citizens and the U.S. president is the head of state, although Virgin Islanders do not vote in presidential elections (but they do vote in presidential primaries).

Since 1970, the governor of the U.S. Virgin Islands has been chosen by popular election. Before that, the governor was appointed by the U.S. president. As the head of the executive branch, the governor chooses commissioners to oversee departments, proposes the territory’s annual budget, and signs (or vetoes) legislation. The governor is assisted by a lieutenant governor, elected as part of a gubernatorial ticket, like the U.S. president and vice president.

Kenneth Mapp, a Republican and former police officer, won his first four-year term as governor in 2014.

The 15-member unicameral legislature is elected every two years. The Senate passes laws and can petition the U.S. Congress to make changes to the Organic Act, the territory’s constitution. Seven of the 15 senators are elected from the St. Croix district and seven are elected from the St. Thomas-St. John district. The final member is chosen at large but must be a resident of St. John.

Virgin Islanders also choose a nonvoting delegate to the U.S. House of Representatives, who can take part in debates and serve on committees but does not have a vote on the floor. Stacey Plaskett, a Democrat, was sworn in as the U.S. Virgin Islands delegate in January 2015, succeeding Donna Christian-Christensen, who held the post from 1996 to 2014.

Elections

Elections for governor are held every four years; elections for Senate and delegate to Congress every two. The vast majority of Virgin Islanders align themselves with the Democratic Party, so much so that political parties are largely irrelevant in local elections. Personality and political alliances are much more important; party affiliation is easily shrugged off when found inconvenient.

Election season is marked by spirited debates, lots of political banners and signs, and a seemingly endless sequence of open-air political rallies.

Judicial and Penal Systems

There are both local and federal courts in the U.S. Virgin Islands. Territorial court judges are appointed for 10-year terms by the governor and hear civil and criminal cases based on local laws. U.S. District Courts in St. Thomas and St. Croix are part of the Third U.S. Circuit, the same as Pennsylvania, New Jersey, and Delaware. The Third Circuit Court of Appeals is the territory’s appeals court; cases from the Virgin Islands can be appealed all the way to the U.S. Supreme Court.

Economy

The U.S. Virgin Islands’ economy is highly dependent on tourism: Some 2.6 million people visited the U.S. Virgin Islands in 2016, 1.8 million of them aboard cruise ships. The territory was on track to match this in 2017 until Hurricanes Irma and Maria struck in 2017. Total visitors were down to 1.9 million in 2017 and remained lower than usual in 2018. FEMA contributed over $1 billion in federal funds to support the hurricane recovery in the U.S. Virgin Islands,

There are small agriculture, manufacturing, and industrial sectors, too. For example, some 17.5 million proof gallons of rum were exported to the US in 2016, which in turn saw $250 million in lucrative rum excise tax returned to territorial coffers.

Despite the large number of visitors, the U.S. Virgin Islands economy has never fully rebounded from the 2008 global recession. The Virgin Islands’ unemployment rate is 11 percent and an estimated one-third of households have incomes below the federal poverty line. The government is bloated and inefficient, providing poor services at high cost. In 2017, major rating agencies downgraded US Virgin Islands public bonds causing immediate cash flow challenges for the island and raising the possibility of a territorial financial crisis like that experienced by Puerto Rico.

British Virgin Islands

The British Virgin Islands are an overseas territory of the United Kingdom, one of five remaining UK colonies in the West Indies. Power is shared between a locally elected government and the British governor, who is appointed by the queen. The local government is responsible for most areas of administration, including finance. The British governor administers the courts, the police, and the public service and is responsible for external affairs.

Since 1978, the territory has paid for itself. British aid is minimal and is used for areas of special interest to the British government. In the early 1990s the UK government paid for a new prison; in 2001 it contributed to the building of a new residence for the governor. Following Hurricane Irma in 2017, the British government provided grants of less than $15 million but did agree to guarantee up to $300 million in recovery loans.

The BVI has a ministerial government, modeled after the Westminster system. Ministers, who are the chief policymakers in the government, are chosen from among members of the majority in the legislature. Together, the ministers form the cabinet, which meets weekly to make policy decisions. The premier is the most senior minister; together with the governor, he or she guides the cabinet and leads the government. Laws are proposed and passed in the 13-member House of Assembly. House meetings, which take place about every four to six weeks, are broadcast live on television and radio.

Elections

Elections must be held at least every four years, or sooner if the ruling party calls them, or if the ruling party or coalition seems to have lost its ability to control the government.

The last elections were held in 2015, when the National Democratic Party led by physician-statesman Dr. Orlando Smith won a second consecutive term with a strong 11-2 seat majority. The victory was seen as an endorsement of the NDP’s promises to complete the new hospital, extend the cruise ship pier and expand the airport. The next elections are due by 2019.

There are about 12,000 registered voters in the BVI—less than half of the population. Immigrants who have settled in the territory must obtain citizenship—called belonger status—before they can register to vote.

Judicial and Penal Systems

The BVI is part of the Eastern Caribbean Supreme Court, which administers courts in eight different eastern Caribbean jurisdictions. Judges are rotated among the jurisdictions. The law is based on English common law, and courtroom practices follow those used in England. Appeals are heard by the three-judge Eastern Caribbean Court of Appeals. The final court of appeal is the privy council in the United Kingdom. In addition, BVI has a local magistrate’s court to deal with minor infractions and preliminary hearings, as well as a commercial court and arbitration center.

Prisoners serve their sentences in a hilltop prison on the northeastern corner of Tortola, called Balsam Ghut. A prison farm provides produce, eggs, chicken, and other goods for use at the prison; look for Her Majesty’s Prison eggs in local grocery stores.

Economy

Tourism and financial services fuel the British Virgin Islands economy. GDP is estimated at $1 billion, or over $34,000 per capita, one of the highest in the Caribbean. At the same time, the BVI continues to import labor to meet demand: More than half of the workforce is on work permits. Though 215th in the world by population, the BVI has the second highest rate of inward migration in the world.

Tourism is a major economic driver. In 2016, 406,000 overnight guests visit the BVI and 700,000 arrived via cruise ship. With recent investments in an upgraded cruise pier and plans for direct flights from the US mainland, the territory had high hopes for increasing growth in both areas before Hurricane Irma struck in 2017. While the charter boat segment recovered relatively quickly following the storm, the scale of devastation of hotels, ports and infrastructure has led to an extended slow-down, leading to an increase in unemployment which had typically been below 3 per cent.

The BVI’s financial services industry contributes more than half of government revenue and is built upon its companies legislation. More than 800,000 companies have been incorporated in the BVI since the early 1980s, attracted by low incorporation fees, a flexible, modern and creditor-friendly corporate statute, and the BVI’s political and economic stability. Thousands of mostly European professionals work in the BVI’s financial services industry, which is centered in Road Town. The leak in 2016 of thousands of files held by a Panamanian law firm with ties to the BVI – known as the Panama Papers – cast an international spotlight on the BVI, putting pressure on the islands to impose new regulations and to more forcefully rebut its image as a tax haven.