Committee: V.I. lacks system to address major economic shockwaves
Published: September 6, 2013
Font size: [A] [A] [A]
ST. THOMAS - Facing a plummeting gross domestic product, high unemployment rates and the continuing impact of HOVENSA's closure, the governor's economic development team is formulating a five year plan to submit to the U.S. Economic Development Authority.
At a Government House meeting on Wednesday, the Comprehensive Economic Development Strategy Committee presented the 2012 update to reflect the economic shocks and developments since the formulation of the last five-year plan in 2009.
The committee identifies the territory's economic needs and goals and reports them to the agency so federal funding can be secured to advance economic growth.
The goal is to use the federal funds to promote economic growth that will make the territory more resilient to natural, man-made and economic disasters, according to Wharton Berger, a committee member and the director of the Virgin Islands Bureau of Economic Research.
"Since 2009, a lot has changed," Berger said.
More can be done to maximize the territory's use of federal grant monies, Berger said.
The introduction to the update stresses the fallout from HOVENSA's closure, and the report emphasizes the need to develop better economic data management systems.
The V.I. government is "seeking funding for an economic disaster mitigation plan," and clearly needs to do more thorough analysis of the gap between the territory's workforce's present skill and education levels and the territory's goals in terms of attracting globally competitive firms, the report states.
Requests for proposals for a "targeted competitive industry study" and for an economic modeling system have been issued. Federal funding to upgrade the territory's economic data measurement tools has already been secured. The competitive industry study is a tool commonly used by states in economic distress to assess which industries are lagging and where the emphasis for development needs to be placed given the population, Berger said.
Another persistent theme contained in the 2012 update report is the need for economic diversification, as the HOVENSA closure underscored the reliance of one major employer for the employment of 2,500 people, the generation of $92 million in direct tax revenues. St. Croix's unemployment rate jumped as high as 18.7 percent after the closure, the report notes.
The report also cites dismal income statistics and rates of college education among Virgin Islanders of only 12 percent, compared to a national average of 27 percent.
Berger said workforce development has been placed among the committee's highest priorities, especially since the HOVENSA closure led to there being a high percentage of dislocated workers on the island. The administration's initiative to expand science, technology, engineering and mathematics education at all levels in the Virgin Islands is more pertinent now than ever, as is the intended expansion of the marine industry, Berger said.
The report cites the development of the Virgin Islands Next Generation Broadband Network and the continuing work of the University of the Virgin Islands Research and Technology Park on St. Croix in facilitating and attracting technology and knowledge-based businesses to the territory as progress toward economic development goals. It also cites the move toward reducing energy costs and diversifying the territory's fuel sources.
Initiatives to support and nurture small businesses by utilizing federal grants and credit programs and the $300 million awarded to the Virgin Islands to expand Medicaid coverage were also included in the list of successful projects since 2009.
The 23 member committee already has both public and private sector representatives, but with the 2012 update, there is an initiative for the majority of the membership to represent the private sector.
Currently, only 35 percent of committee members are from the private sector, the report states.
According to Gov. John deJongh Jr., most of the proposed projects submitted by the committee are currently "public sector based."
During the meeting, the governor inquired "whether the private sector has identified any CEDS related projects, while noting that discussions related to private sector involvement with the downtown revitalization at Christiansted, Frederiksted and Charlotte Amalie are ongoing," according to a Government House press release.
- Contact reporter Amanda Norris at 714-9104 or email email@example.com.