A top down Virgin Islands economy cannot survive further into the 21st century

An area populated by roughly 105,000 people should not run its economy based on a model designed to hoard capital while generating returns to that capital in as many markets as possible. Given the reliance on government and tourism as its economy’s drivers, can the Virgin Islands of the United States afford to have a fraction of its community limit the distribution of capital and the opportunities that are spawned from capital deployment? In other words, where a small number of farmers control most of the seed, should they be allowed to only spread seed on a small portion of the land while most of the plot lays fallow? The answer is no.

I can understand the marginalization that a significant number of Virgin Islanders feel. My father moved from St. Kitts to the Virgin Islands in the early 1960s. He married my mother in St. Kitts in 1962 and I, their first born, came along the following year. He worked in the hotel industry which was booming at that period in large part to Fidel Castro taking Cuba offline as a tourist stop resulting in the Virgin Islands and Puerto Rico emerging as alternative vacation destinations. A large number of “down islanders” moved to the Virgin Islands during that period and while we added to the vibrancy of the economy, particularly in the tourist industry, we were always outsiders, having not being born in the territory.

That outsider status as immigrants of course spilled over into the other industry: government. Being non-citizens, my parents could only watch from the sidelines and cheer for a candidate that they thought represented their values. During the early 1960s through the late 1970s that candidate was Cyril E. King. So enamored with the late governor was my mother that she thought it a good idea that I share Governor King’s middle name. Quite a few parents shared that sentiment during that time as well.

But not only was there marginalization in terms of origin or employment by or representation in government, there was marginalization in terms of ownership in the private sector. Yes, locals owned small retail outlets, trade shops, small bars, and restaurants, but larger institutions such as the banks, hotels, and jewelry stores remained in the hands of American and European corporations. Corporations and banks represent not only non-ownership on the part of locals, but a flow of capital and income out of the territory. A community with a high level of poverty needs to see capital and income recycled through the local population, searching out and funding the opportunities that have laid dormant or unseen because current hoarders of capital are biased against local people, preferring to keep us marginalized.

What type of opportunities should re-cycled capital and income search out? They should seek out opportunities that create the ability for each household to have productive capacity within their own hands. Capital and income need to stay within the territory and provide households the ability to practice “decentralized home economics”; where a household can produce their own energy, network their own communications needs; and access alternative modes of logistics that not only transport citizens quickly to any destination, but brings goods, services, and information from distant points to the household. Instead of enjoying fewer economic benefits because they have been forced to live on the edge, households can maximize returns on their resources i.e. income and capital, by making the most from living on the edge.

Marginalization no longer has to be equated with poverty. It can now be, through the use of technology, be equated with wealth.

While statutes say Virgin Islanders are U.S. citizens, aren’t they being treated more like U.S. nationals?

A significant number of citizens of the U.S. Virgin Islands enjoy the Fourth of July. Just pay your Facebook timeline a visit and you will see a number of Virgin Islanders sharing “Happy Fourth of July” greetings or giving military veterans a special shout-out for their service in America’s armed forces. With a population that is well over 70% of African descent and a considerable number of those individuals hailing from independent Caribbean nations or the Caribbean overseas territories of other European powers, it is sometimes amusing and downright disturbing to see an African Diaspora population relish in a revolution by American colonists who did not resemble most Virgin Islanders.

Today’s Virgin Islanders do resemble America’s founding citizens in one respect: Virgin Islanders are residents of a colony although I would not go as far as saying that they are true colonists. Although since 1927 American law has granted people born in the Virgin Islands full citizenship status, I would argue that Virgin Islanders more resemble American nationals than they do full American citizens.

While a U.S. citizen is also a U.S. national, a U.S. national is not necessarily a U.S. citizen. A national is someone born in an unincorporated territory and enjoys limited but not full citizenship rights like universal access to the right to vote for national leaders. To enjoy full citizenship rights, a Virgin Islander would have to move to the U.S. mainland and receive what I call “instant naturalization.” This means that once she takes up residence in the States she could vote and receive other benefits typically reserved for citizens living on the U.S. mainland.

As for the deficiency in colonial status that I alluded to earlier, the major components of the USVI’s tourist-driven economy, i.e., most hotels, restaurants, clubs, jewelry stores, etc., are not owned by “locals.” Outside interests and investors own the tourist industry. If you are not benefiting in terns of equity for the extraction and sale of tourist product, you really cannot call yourself a colonist.

But treated like a colonist you are if living in the Virgin Islands. As I shared with you in a post yesterday, who the Virgin Islands trades with externally is dictated by American law. Virtually all items you need for survival are imported. According to the U.S. Central Intelligence Agency’s World Factbook, the USVI has a considerable trade deficit, exporting $1.81 billion in goods and services in 2016 while importing $2.49 billion in goods and services, also in 2016. Federal and territorial government spending accounted for 27% of gross domestic product, according to the Central Intelligence Agency. Together, government spending and exports comprised 74% of the USVI’s gross domestic product.

The Virgin Islands has been treated like an outlying territory in the Badlands for decades. I still remember the feeling of being ignored by the U.S. federal government during the post event travails of hurricanes David and Frederick in 1979. The memories of being a step-child in a catastrophe came back to me last year as the media, who ironically has spearheaded the “ignore the USVI” approach, started reporting on how the USVI was being ignored as Puerto Rico got the spotlight after hurricanes Irma and Maria severely damaged both territories.

Not only do residents of the USVI not have full citizenship. They get less than guidance or attention on their poor economy.

The question is, whether status as a territory and effective status as a U.S. national in an unincorporated territory provides the USVI with the opportunities to succeed?  Maybe it is time for Virgin Islanders to start agitating like fed up colonists.

Decolonizing the United States Virgin Islands

It is time for the Trump administration to follow the lead of the British and cut a couple colonies loose. The one colony I would like the Administration to let go its own way is the United States Virgin Islands. One quick note, especially to Virgin Islanders who find it hard to believe that the United States looks at the USVI as anything more than a colony: your vehicle license plates. The inscription, “America’s Caribbean” is code for America’s colonial attitude toward the Virgin Islands.

Another piece of evidence is the refusal to allow American citizens living in the USVI to vote in presidential elections. USVI citizens go through the farce of sending delegates to a party convention but every four years in November they are not allowed to cast a vote in the general elections. Nor does the USVI have voting representation in the U.S. congress. Its one delegate, Stacey Plaskett, can be a member of a congressional committee, make speeches on the House floor even. But vote? No.

In addition, the USVI has no say over its external affairs. Although not a part of the U.S. customs territory, the USVI cannot enter into trade deals without the permission of the United States. The governing document for the Virgin Islands, the Organic Act of the Virgin Islands of the United States, 1954, is more of an instrument for the public administration of internal affairs under the auspices of the American congress and executive branch. With the exception of a brief discussion on the importation of infected livestock from the U.S. mainland and the placement of duties on articles imported into the Virgin Islands, the Organic Act does not empower the Virgin Islands in matters of foreign trade. Public administration of the Virgin Islands is as colonial as it gets.

But what are the benefits to the United States from colonizing the USVI? In August 1916, the United States entered into an agreement with Denmark to purchase the Danish West Indies as part of the American strategy to protect the western hemisphere from European invasion during World War II. This strategy continued into the years of the second world war. For example, the Cyril E. King International Airport on St. Thomas was the site of an old army airfield that was later named after U.S. president Harry S Truman. As a child growing up in St. Thomas in the 1960s and 1970s it was never surprising to see an attack submarine surface in the harbor at Long Bay or at the old submarine base a couple miles to the east of the harbor. As a teen-aged member of the Civil Air Patrol, I led a search and rescue exercise around Magens Bay, taking my team into an area that housed a satellite communications facility. I don’t remember if it was military, but we were spotted by a white woman in a VW Beetle who threatened to rat us out given our failure to give her an explanation as to why we were there. Needless to say, we hauled ass after completing our mission.

But today, in the 21st century, where the United States deploys nuclear-powered aircraft carriers and submarines, satellite communications, and long-range jets, does the U.S. really need to use the Virgin Islands as a land-based aircraft carrier in the Caribbean Sea?

And given that the Virgin Islands keeps the federal income taxes it collects from its residents while enjoying limited social welfare benefits, the United States is probably losing a few billion dollars in tax and other revenues.

Politically, where is the benefit to either Democrats or Republicans in the United States from America’s Caribbean? Again, the delegate from the Virgin Islands is a non-voting member of the U.S. House. The thirty or so thousand eligible voters, while allowed to cast, in my opinion, a symbolic vote in the primaries and send delegates to the parties’ conventions, are not allowed to vote for president.

Culturally, the Virgin Islands do not add to America’s social fabric. While a significant portion of the population enjoy the trimmings of Americanism, from shopping to cable television to American sports, we are still, whether we are aware of it or not, still Caribbean. We live in two worlds with a significant “down island” portion of the population helping to keep our feet in the goings on of the Lesser Antilles. The Democrats would not want Virgin Islanders playing a significant role in their party politics. West Indians are more conservative than your run-of-the-mill American, and while most won’t admit it, do not share as close an affinity to black Americans as most would think, skin color notwithstanding.

Other than the prestige of saying that, like other European powers, they are in possession of overseas territories, I see no benefit to the United States in playing the empire game in the Caribbean. The United States should truly consider some decolonizing especially if it nudges my people to more self-determination.

Too bad the Democrats chose to politicize today’s EB-5 immigrant investor hearings

I am always reminded when watching a congressional hearing that the first duty of Congress is to keep the Executive in check. Today was no exception as I tuned into the U.S. Senate Committee on the Judiciary’s hearing on the Employment Based Immigrant-Fifth Preference Program. The chairman of the committee, Senator Chuck Grassley, Republican of Iowa, called the meeting to discuss the problem of fraud in the program.

The EB-5 immigrant investor program promotes foreign direct investment in the United States by granting a green card (permanent residency) to an immigrant and his or her family where the immigrant invests $1 million or $500,000 in an investment that targets rural or underserved urban areas.

I was less interested in the fraud aspect, hoping that between any discussion of the downside of theft that the panel and its lone witness would shed some light on its benefits.

I should have known better….

A number of Democratic members of the panel, Senator Dick Durbin, Democrat of Illinois, and Senator Diane Feinstein, Democrat of California, decided to go off script and ask questions that had more to do with the issue of children being separated from parents detained at a Mexican-U.S. border non-port of entry versus how to tweak an investment program so that underserved communities in the United States get some economic attention.

It is no wonder that Congress gets blamed for not getting things done. One could argue that one thing these senators could have gotten done was ask why there were no immigrant investor regional centers in the United States Virgin Islands or Puerto Rico. Given the high rates of poverty in both territories and the need for more economic development, attracting investment to underserved areas like U.S. Caribbean territories should have been among the committee’s priorities.  If they had any sense of awareness, one look at the calendar should have told them that it was that time of the year where Caribbean territories are preparing for another hurricane season.  Maybe one of those foreign immigrants they give so much credit to as innovators could be incentivized to invest a million or so dollars in the USVI or Puerto Rico in exchange for a visa….

… but that’s asking too much …

The political takeaway here is that criticism of any sitting president’s policy is the “doing something” that Congress is best at. You have to apply an entropy effect approach to understanding congressional politics. Taking time to conflate the EB-5 program with President Trump’s “zero tolerance” policy on immigrants trying to enter the U.S. without a visa should not be a surprise. It should be expected.