The British Virgin Islands have been making headlines in recent weeks for the wrong reasons, says Mark Pragnell founder of Pragmatix.
The United Kingdom overseas territory has been under threat of direct rule from London, over 4,100 miles away since the release of the findings of an inquiry by a retired High Court judge into standards of governance.
Sir Gary Hickinbottom's 946-page, no-punches-pulled report came quickly on the heels of the detention by United States' federal agents in Miami of the islands' then Premier, Andrew Fahie, on charges related to alleged drug trafficking. Islanders have every reason to be shocked at the events and dismayed at how the Caribbean archipelago is being portrayed around the world.
But the BVI has not become consumed by constitutional angst and, instead, has formed a can-do National Unity Government resolved to keep the islands' future in the hands of islanders.
Such resilience and determination come as no surprise.
This September marks the five-year anniversary of Hurricane Irma. The record-breaking Category 5 storm devasted the territory, killed four people, flattened 600 homes and damaged 85 per cent of buildings.
The economic costs inflicted amounted to more than 3½ times the jurisdiction's annual GDP. But, seeing the BVI today, it would be easy to forget the destruction of 2017. There has been an extraordinary physical and economic recovery driven locally - by government, businesses, and communities on the ground. There has been little in the way of aid from Britain or international partners more generally.
The recovery efforts and results have been made even more remarkable given that the covid pandemic hit only 2½ years after Irma. Early border closures helped to limit the spread of the virus, with the BVI's response seen as a model for the Eastern Caribbean by the United Nations.
But, without international visitors, tourism was hit particularly hard, to the extent that there were more overnight visitors to the BVI in 2018 as the islands rebuilt after Hurricane Irma than there were in 2020 and 2021 combined.
Unlike many in the Caribbean - or the Mediterranean, the BVI has actively encouraged a more mixed economy: a balanced approach with built-in resilience. Tourism, which accounts for one in every five jobs, operates alongside an established offshore finance centre, which contributes a third of the territory's GDP and 57% of its tax receipts.
But a strong and successful international finance centre does not just support the islands' economy, it's important to the global economy too.
The BVI is an attractive jurisdiction in which to set up a company to facilitate cross-border investment and trade, not least because of its specialist expertise, stable regulatory regime, and independent legal and judicial system.
Investments mediated by the 375,000 companies domiciled in BVI provide the underlying finance for investment in infrastructure, and the essential liquidity for the secondary markets that underpin and provide confidence in investments around the world.
BVI structures help to secure funding for projects in developing countries, leading to jobs on the ground and driving economic growth in areas where the opportunity for investment would be otherwise limited.
Despite multiple lockdowns and curfews of varying severity, law firms, accountancy practices, insurance brokers and corporate service providers in the BVI were involved in global trade and investment worth tens of billions of dollars throughout the covid period.
The strength of the international financial centre was such that by 2021 new company incorporations had exceeded pre-pandemic levels. Growth has continued in Q1 2022, with incorporations up by 4% on the same period in 2021.
And the BVI punches well above its weight in the enforcement of global rules.
Following Russia's invasion of Ukraine, for example, new and extended sanctions were introduced around the world on Kremlin-affiliated assets and organisations.
The BVI's Beneficial Ownership Secure Search System (BOSSs), an unrivalled centralised database which stores ownership information on entities domiciled in the BVI, has proven instrumental in the speedy implementation of international sanctions. The BVI can provide partner jurisdictions with ownership information within as little as an hour.
Since the first sanctions were introduced in February, the BOSS system has facilitated information transfer about Russian-affiliated holdings and led to the freezing of $400m in relevant assets in the BVI. Information held on BOSSs enabled authorities to identify the ownership of superyachts Lena and Amore Vero, leading to their seizure in recent months in Italy and France respectively.
The ownership of two yachts from Russian oligarch Roman Abramovich's collection, Halo and Garçon, was also revealed to the Antiguan authorities through the release of BVI-held information.
Islanders have had a turbulent few months but their resilience and determination continues to support the flow of vital investment globally as well as the international rules based system more generally.
