Why Causes of Poverty in Virgin Islands are Likely to Fester

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THE VIRGIN ISLANDS — Lying within the remote waters of the Atlantic ocean is a Caribbean chain of islands containing a U.S. territory known as the U.S. Virgin Islands, and its counterpart of the British Virgin Islands, both of which are collectively known as The Virgin Islands.

For many, it’s an ideal destination for vacations — boasting tropical beaches, lavish hotels and a thriving tourism industry; however, some residents of the country see a different reality. The driving forces of the economy of The Virgin Islands have undergone a few key transformations in the last three to four decades, transformations that have been some of the few main causes of poverty in Virgin Islands.

The British Virgin Islands

According to a 2003 Poverty Report published by the Caribbean Development Bank, the British Virgin Islands’ economic sustainability was heavily reliant upon agriculture for most of its history. That dependence has steadily evolved into one based upon tourism and now the island chain remains reliant on the tourism industry in addition to financial agreements and services with foreign businesses. The report stated that at the time, there were some 470,000 foreign businesses registered within the British Virgin Islands and that tourism accounted for 14 percent of its total GDP — a 12 percent increase from the previous year.

Tourism

Today, the tourism industry accounts for almost 50 percent of the economy, and in the last decade that figure has steadily decreased. From 2008 to 2009, tourist arrivals decreased by 8.3 percent and tourist-related revenue declined 17 percent. Also, 70 percent of the workforce is comprised of immigrants, and although represented in nearly all occupations in the country, these employees are much more likely work less skilled, labor-related jobs.

Aside from these flaws, it appears that causes of poverty in Virgin Islands are not as numerous as those in the U.S. Virgin Islands, and that its economy is actually considered to be one of the best in the Caribbean.

According to the CIA’s World Factbook, as of 2016 all Virgin Islands revenues were equal to expenditures, their GDP’s real growth rate is increasing and their GDP per capita is ranked 40 in the world, at an average of $42,300 per person. In addition to this, the employment rate is 95 percent and public debt, which accounted for 12 percent of the GDP, decreased by 15 percent in 2010.

The U.S. Virgin Islands

The causes of poverty in Virgin Islands and their results are seen most ostensibly in the U.S. Virgin Islands. Among many others, their problems include: one of the lowest fertility rates in the world, one of the highest infant mortality rates in the world, an unemployment rate of 13 percent, one of the lowest GDP real growth rates in the world at -5.4 percent as of 2013 and a -6.5 percent budget deficit. In fact, the severity of the U.S. Virgin Island’s debt crisis is at a point that many experts believe the island nation is on the verge of financial collapse if they continue to lose foreign investment at the current rate.

The causes of poverty in Virgin Islands in the case of the U.S. are convoluted and diverse, but their most recent catalyst for decline was the closing down of the Hovensa oil refinery in 2012, which operated for 45 years, was one of the largest oil refineries in the world that once served as the largest employer on the island. In 2013, the economy began to feel the economic impacts of the event due to a decrease in oil related exports.

Children in the Virgin Islands

In regards to the future of the territory, however, the worst problem is perhaps the infant mortality rate, and the opportunities available to children in the U.S. Virgin Islands. As of 2016, the infant mortality rate was 6.5 deaths per 1,000 people, ranking it 164 out of 230 countries, and since the 2017 fertility rate was ranked 167 out of the same 230 countries, a notable population decline of children has been the result.

From 1990 to 2000, the percentage of the population under age five decreased by seven percent, and children under 18 decreased by three percent. While this decrease is linked directly to a declining fertility rate, the problem is worsened after considering the conditions some children in the territory live under. According to 2012 data from the 2014 USVI Kids Data Count report published by the Community Foundation of the Virgin Islands, 27 percent of families in poverty had children, which is a 25 percent increase from 2008. Additionally, 67 percent of children were on the SNAP Food Assistance Program, a 37 percent increase since 2008 and 34 percent of children were enrolled in the Paternity and Child Support System.

Another one of the many causes of poverty in Virgin Islands is poor educational systems, which are in dire need of improvement — particularly in the case of the U.S. Virgin Islands. The same 2012 data reflects that 64 percent of public school children in grade 11 cannot read competently, 46 percent of public school third graders cannot read well enough to be prepared for fourth grade learning content and that 53 percent of children age 5 do not have the necessary motor, speech or basic interaction skills needed for a successful kindergarten education.

Consistent Theme Between the Two Island Chains

Though the problems in both regions differ in degree of severity, one theme appears to remain mutual — the causes of poverty in Virgin Islands are fundamentally caused by a perpetuating problem of inadequate education and preparation of young people in ways that will enable them to attain living wage jobs and become intellectual and engaged people. Instead, the vast majority of the workforce of the Virgin Islands are employed in low skilled, service industry positions.

This is reflective of the unfortunate, but realistic, notion that policy makers need to increase individual incomes, implement effective family leave policies and unemployment benefits and improve children’s access to quality education to disband the cycle of educational and economic inequality present in the region. This cycle not only impacts young people now, but will also impact the aging population as well as young people’s ability to create a prosperous society in the years to come.

Hunter McFerrin

Photo: Flickr

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About Author

Hunter McFerrin

Hunter write for The Borgen Project from Fayetteville, Arkansas. His academic interests include political science and journalism, specifically foreign policy and print journalism, respectively. Hunter has always had a great interest in philosophy. He enjoys writing, researching, and finding out about things that are going on around the country and the world.

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