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Poverty in the Virgin Islands

Poverty in Virgin Islands
This year, articles detailing adventures in the Virgin Islands have populated news feeds, travel blogs and online newspapers. To celebrate its 100th anniversary of becoming a U.S. territory, the U.S. Virgin Islands is offering $300 in travel credits to visitors vacationing for three or more nights in 2017. President Obama was recently photographed kitesurfing in the British Virgin Islands. However, outside of the scenic and comforting oceanfront villas that whisk vacationers away to alternate dimensions of rest and relaxation, the internet lacks recent data on poverty in the Virgin Islands.

U.S. Virgin Islands

Recently, the economy of the U.S. Virgin Islands (USVI) has been unstable. Between 2011 and 2015, real gross territorial product (GTP) decreased by 7.8%. However, in 2015 alone, real GTP increased by 0.2% in the USVI; in comparison, U.S. real gross domestic product (GDP) increased by 2.6% in 2015. It is alarming that exports have decreased significantly. Between 2011 and 2015, total exports decreased by 41%; in 2015 alone, total exports decreased by 80%.

The number of jobs in manufacturing on the Islands decreased by over 20% between 2011 and 2015. One of the world’s largest refineries based in the USVI shut down in 2012, driving this decrease in jobs. In the same year, refined petroleum exports to the U.S. plummeted by 90 percent. However, civilian employment increased in 2015, the most recent year that displays data. Furthermore, employment within leisure and hospitality remained fairly consistent between 2011 and 2015, which indicates a steady tourism industry.

A 2010 U.S. census found that 22% of the population in the Virgin Islands lives in poverty. Fifty percent of those living under the poverty level were families led by single mothers. The Congressional Research Service discovered that on average, children living in female-headed families were more likely to live in poverty than children living in two-parent households.

Euromonitor explains that tourism heavily impacts the USVI. The Wall Street Journal discovered that annual expenditures by visitors between 2007 and 2013 fell 19%. The article discovered that the Islands have high levels of debt and mounting pension obligations. If new bonds cannot be sold, widespread layoffs are a possibility.

The British Virgin Islands

Like its counterpart, the British Virgin Islands (BVI) relies on tourism to support its economy. A.M. Best, a U.S. based rating agency, found that tourism generates approximately 40% of the territory’s revenue. The rest is generated by the financial services sector. The BVI is extremely attractive to international businesses. For the first quarter ending in 2015, the BVI has registered over 478,000 companies. A.M. Best found that its economy grew two percent in 2015; however, insufficient data exists to properly understand the BVI’s poverty rate.

Levels of poverty in the Virgin Islands remain somewhat ambiguous; however, the Wall Street Journal stated that the USVI’s budget deficit is around $110 million. Therefore, travel credits are a great way to attract more visitors and increase visitor exports. Highlighting the USVI travel credits, a writer for Thrillist said, “We should be banging down the doors to get in, not the other way around.” U.S. News found that the USVI was one of the best places to visit in the Caribbean — especially during the springtime.

Andy Jung

Photo: Flickr