The U.S. Virgin Islands is in the midst of a deep crisis. The fact that it has been "in crisis" for more than a decade does not minimize the seriousness of the current situation. In the past, there has been reference to the government's "fiscal crisis," with a focus on the enormous deficits that the public sector was incurring. In fact, the problems that the territory faces run far deeper and represent the breakdown of a social, political and economic culture that can no longer be sustained.
The actions (and inaction) of V.I. governments, past and present, have virtually assured that there can be no soft landing, and that Virgin Islanders will experience pain and dislocation.
The great danger is that the political and business leaders will take a path that produces the worst possible outcomes, including potential economic depression and social disorder, without paving the way for a better future. This danger will become reality if leaders do not accurately define the problem and educate the community with respect to its nature and seriousness. The philosopher Descartes once said, "the most corrupting lies are problems misstated." If the Virgin Islands' problem is defined solely as a fiscal one, the territory will continue its slide, both absolutely and relative to its neighbors and competitors.
The Virgin Islands also cannot afford to substitute blame for problem-solving. There is plenty of blame to go around, and the interests of justice must be satisfied with respect to those who have done wrong. However, putting these people in jail will not resolve the crisis.
Defining the Problem
At the heart of the crisis is a V.I. government that, in successive administrations, has viewed itself as the economic and employment engine of the territory. Through this perception, it has built a cumulative deficit of more than $1.2 billion, this in jurisdiction with scarcely more than 100,000 people. The exact deficit is unknown because the government's information systems do not work — and, as recent events would indicate, probably because there is much to hide.
Since the government is essentially an employment program, standards are low because it is very difficult to fire anyone. The result is an enormous burden carried by a group of highly dedicated and largely unrewarded workers and managers, while a large portion of the work force does little.
It is this structure that makes it difficult and unfair to condemn whole departments or "the government." Notwithstanding the cadre of highly productive people, there is a reality of generally abysmal public services, including the critical health care, education and public safety sectors. Neither these nor any other areas meet minimally acceptable standards of performance, and despite years of hand wringing and promises, little changes. The system simply overwhelms any impulse to reform.
This is why Sen. Anne Golden's excellent recent article on self-sufficiency leaves out the critical problem: there is no way to get there. So, sick people head for the airport, children in the public schools are cheated of an education, and there is mistrust of the police and the criminal justice system.
In recent years, as the crisis has intensified, V.I. administrations and the V.I. Senate — one of the world's lesser legislative bodies, have resorted to a range of destructive fixes. Each has made tomorrow worse as the price for saving today. All other values and goals, short- and long-term, have been subordinated to two ends: first, continuing to make the bloated government payroll, and, second, expanding various political patronage troughs.
Even as the economy declined and the fiscal picture worsened, people were added to the payroll, raises were given, and more snouts were allowed to feed at the public trough.
The compensating actions created categories of "losers" that are unimaginable in any other jurisdiction. Tax refunds were not made, making the government by far the territory's biggest tax cheat — quite a title, given the history of tax payment in the Virgin Islands. Vendors who had fulfilled contracts in good faith were simply stiffed or given partial payments months or years late.
The result was to ruin many small businesses and effectively destroy much of the not-for-profit services sector, two of the backbones of a healthy democratic community.
The government repeatedly borrows money to cover operating expenses. Every time the government "maxes out" its credit cards, it signs up for a new one at a higher rate of interest. It does not take a genius to figure out that this practice cannot go on forever.
How Did This Happen?
In finding a way out, it is important to try to understand how the Virgin Islands has gotten into this dire situation. The simplest explanation is that every small step made the next one easier, and so on, and so on until there was a full-blown crisis. By that time everyone was used to the new reality and it seemed quite normal. And the pain incurred in taking effective steps had become clear.
It would also be a mistake to ignore the fact that many people have benefited from it. After all, the billion-plus dollars went someplace.
Beyond these universal explanations, there would seem to be a series of V.I.-specific ones that go a long way toward clarifying the picture and illuminating a path to a new Virgin Islands.
Federal Relationship: The relationship to the federal government has contributed substantially to the magnitude of the crisis. On the part of the V.I. government, and Virgin Islanders in general, there is an eternal expectation of a "bail out." It appears that the V.I. government now expects to be compensated for hurricane damage even when the storm misses the territory.
There is an illustrative lesson in comparing the territory's post-hurricane recovery efforts to those of the British Virgin Islands, where self-sufficiency is the watchword.
On the federal side, the explanation for lack of effective intervention appears, like many things, to be partly a function of race. Democratic administrations are afraid of being called "racist" and of alienating part of a core constituency. Republicans, as the white people's party, revel in examples of what they perceive to be black screw-ups, wherever they may occur.
In any instance, there has been a major federal failure to monitor the use of federal money and to take appropriate actions where misuse has occurred.
Inter-island and Inter-group Conflict: Inter-island hostility, particularly between St. Croix and St. Thomas, and inter-group distrust based on historic experience and lack of communication have contributed significantly to the crisis.
They have paralyzed overall problem-solving as individuals and groups look to protect only their own narrow interest. They have opened the door to racial opportunists like Adelbert Bryan, who bears a striking resemblance to the Serbian dictator Slobodan Milosevic before the latter came to power.
They have produced "insider" government, with all kinds of deals, and a wide-spread belief that there is nobody who speaks authoritatively for all Virgin Islanders.
Government as an Employment Program: The evolution of the Virgin Islands government into a jobs program is not unique. Once the ball has begun rolling, it inevitably gathers speed. At some point, a significant part of the population begins to see public employment as an entitlement. Since it is very difficult to fire anyone, the lowest common denominator begins to set the standard. "If he/she doesn't have to work, why should I?" Layered atop this system, massive political patronage produces insider politics, the danger of corruption, and a system without accountability.
And because top salaries are so high, people are willing to do almost anything to hold onto their jobs, knowing that the next one will inevitably pay less. In the end, this system
produces what would seem impossible: an army of public employees and rapidly declining public services.
Government by Pretension: The Virgin Islands is a small place. Realistically, the governor is the equivalent of a small city mayor and the senators, members of a city council. Particularly in the recent past, governors have wrapped themselves in the mantles of presidents or prime ministers. This posturing would be humorous if it did not produce a commensurate attitude of non-accountability, a belief that public office is property rather than a public trust.
Again, service delivery — the essence of government at this level — is given short shrift, almost as if it were beneath these office-holders to focus on picking up trash, running the schools or keeping the islands clean.
Declining Tourism: Throughout the Caribbean, tourism is in trouble for a variety of reasons. The result is intense competition and a need to differentiate oneself from the pack. It is difficult to detect any sense of urgency in the U.S. Virgin Islands, as the culture of inertia and "I'm all right, Jack" continues to dominate. This issue goes well beyond government to what is essentially an anti-tourist culture that manifests itself in indifference to or incomprehension of the basics of effective customer service.
Reality Is Too Painful: At each stage in the evolution of the crisis, two things have happened: The stakes have gone up, and the choices have gotten worse. So, for each successive decision-maker, thinking about effective action has taken on the quality of staring ever deeper into the abyss. Nobody has been willing to do it, and the current administration is clearly not up to it.
Is There A Way Out?
Is there a way out of this increasingly dangerous situation? The answer to this question is "yes," given certain conditions. Those conditions relate to a set of basic assumptions:
First, the status quo is not a viable option and will inevitably produce a collapse with untold consequences. Each passing day produces worse choices.
Second, the solution to the crisis cannot be narrowly fiscal. A purely fiscal response, yet another "bail-out" of some sort, will leave most of the conditions that produced the crisis in place and will not address the other serious problems facing the territory.
Third, there is no purely local solution. There is no local leader or group of leaders who will — or should — be expected to assume the enormous burdens associated with changing the territory's direction.
Fourth, along with inevitable reduction in the government budget and work force, there must be investment and increased spending in certain targeted areas.
Finally, there is an opportunity here. Although many people are wedded to the present and fear the unknown, there is also widespread dissatisfaction with the current system and the inequities and negative outcomes that it has produced. The opportunity is to build a "new" Virgin Islands, one in which citizens have confidence in an honest government that works with the private and not-for-profit sectors to build healthy and prosperous communities. There is a need for a plan that addresses a range of critical needs on an integrated basis:
1) Restructure the government of the Virgin Islands by eliminating non-essential positions at every level. This will require a major re-engineering of the work processes and standards of virtually every agency of government. It will be an expensive process that should be paid for by the federal government.
It must include the definition of performance standards and the means to assure that they are met. The elimination of entire departments and functions should not be ruled out.
2) The anti-tourist culture that pervades the Virgin Islands must change. For better or worse, tourism is the life-blood of the Virgin Islands economy. It is a difficult and increasingly competitive industry. It does not matter that the tourists are often annoying and sometimes stupid. They have too many other choices for them to come (or return) to a place where they face rudeness, hostility, indifference, poor service, litter and many of the other things that they left home to get away from.
It is also a business where a bad image is difficult to shake. There is a need to change both the image and reality.
3) The educational system must be restructured, and standards must systematically and substantially be raised. Under any circumstances, the Virgin Islands is going to need a literate and technically competent work and managerial force in the future. The leadership and managerial talent should be home grown. It will have to replace the failed class that will be soon leaving the stage. There is a reservoir of all kinds of talent that is not being developed or that is being stifled and wasted.
Young people deserve an education that allows them to compete effectively, not only in the Virgin Islands but anywhere that they may choose to live.
4) Even in the hard times that lie ahead, investments should be made in physical improvements and beautification. The current tolerance of litter and overall disrepair is inconsistent with either economic or social success. Modest investments in litter removal, signage, landscaping and graffiti removal could have a dramatic effect. They would be a visible symbol of a "new" Virgin Islands.
5) The move against public corruption must be supported. The perception of corruption has grown in recent years, further tarnishing the territory's reputation. It also serves as a magnet for the unscrupulous. The belief that everything is for sale here has a corrosive effect on all levels of society. The lack of transparency and basic management competence in government feeds suspicion. To take a recent example: The refusal of the government-funded V.I. Carnival Committee to open its books is an outrage that would be tolerated in few other places.
6) Finally, confidence in the criminal justice system must be restored, and a significant investment must be made in combatting crime. People must feel safe in their communities, and they must be confident that a professional best effort is being made when crimes do occur.
All of these initiatives will represent an enormous challenge, one that will have to be met under the most difficult of circumstances. In basic ways, the transition that the Virgin Islands will have to make is similar to that made by the collapsed socialist countries of Eastern Europe, rather than the fiscally driven retrenchments of New York City, Washington, D.C., and Miami. The starting point is an acknowledgment that the crisis is deep and can only get worse without dramatic substantive action.
It would be best if that acknowledgment were home-grown, rather than imposed from outside by the federal government or by the reality of a complete financial collapse. The more Virgin Islanders understand their situation and the choices that they have, the more they will control their destiny in the future.
Editor's note: Dr. Frank Schneiger is president of the Human Services Management Institute, a consulting firm. He has served as assistant commissioner of health for the City of New York and founded Comprehensive Medical Management Inc. He is the author of "Cutting and Coping," a how-to guide for managing retrenchment. He has worked with V.I. agencies since 1975, most recently as consultant to United Way of St. Thomas/St. John. He founded the St. Thomas/St. John Youth Multiservice Center.
Readers are invited to send comments on this article to firstname.lastname@example.org.
VIRGIN ISLANDS: BIG CRISIS IN A SMALL PLACE
If you have a news tip to share, please call or text us at 340-228-8784.
Support local + independent journalism in the U.S. Virgin Islands
Unlike many news organizations, we haven't put up a paywall – we want to keep our journalism as accessible as we can. Our independent journalism costs time, money and hard work to keep you informed, but we do it because we believe that it matters. We know that informed communities are empowered ones. If you appreciate our reporting and want to help make our future more secure, please consider donating.