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Why the U.S. Virgin Islands Are Betting Big on Growth, Tourism & Clean Energy · The Financial Exchange Show

• 0:00
  Speaker 1: Joining us now on the line is Governor Albert Bryan Junior.
• 0:03
  Speaker 1: He's governor of the United States Virgin Islands and just
• 0:06
  Speaker 1: delivered his State of the Territory address. And so, Governor,
• 0:11
  Speaker 1: I promise I will give you the opportunity to boast
• 0:14
  Speaker 1: about your areas weather, but I will say that here
• 0:17
  Speaker 1: in New England it finally popped into the twenties this week,
• 0:20
  Speaker 1: so you know, New Englanders are wearing shorts around and
• 0:22
  Speaker 1: we're not all that impressed by your beautiful seventy and
• 0:27
  Speaker 1: eighty degree weather, I'm sure. But Governor, before you boast
• 0:31
  Speaker 1: about the beautiful leisure vacations that people can take, you
• 0:35
  Speaker 1: did just deliver this State of the Territory address. We
• 0:38
  Speaker 1: have a business and economic news show here and I'm
• 0:41
  Speaker 1: interested to hear from you as to.
• 0:44
  Speaker 3: What you view.
• 0:45
  Speaker 1: You know, the major themes of your address that you
• 0:49
  Speaker 1: recently delivered on the State of the Virgin Islands.
• 0:53
  Speaker 2: Well, good morning and actually good afternoon. I mean the
• 0:56
  Speaker 2: major theme there was anchored in progress, and we're talking
• 1:00
  Speaker 2: about all the things that are going on in the
• 1:02
  Speaker 2: Virgin Islands and the private as well as the public sector.
• 1:06
  Speaker 2: We are just at the beginning of a twenty five
• 1:09
  Speaker 2: billion dollar remake. Our recovery includes our hospitals, our schools,
• 1:16
  Speaker 2: all our undergrounding, water sewer, our power plants. Everything is
• 1:20
  Speaker 2: being redone and at the same time, we're really doing
• 1:23
  Speaker 2: well in the private sector market. All we're at three
• 1:26
  Speaker 2: point six percent three point six percent unemployment in the
• 1:32
  Speaker 2: last In the last six years, seven years of my tenure,
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  Speaker 2: we've grown our GDP by twenty five percent.
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  Speaker 3: We're really on fire.
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  Speaker 2: The problem is is that, you know, much like the
• 1:44
  Speaker 2: rest of the nation, inflation is doing a real good
• 1:47
  Speaker 2: job on us here. Last year we experienced seven percent.
• 1:51
  Speaker 2: In some of the years we experienced nine percent inflation,
• 1:55
  Speaker 2: especially on the smaller island of Saint John's. So lots
• 1:59
  Speaker 2: of good stories to we're converting our whole grid system.
• 2:03
  Speaker 2: Now we're almost we say we have the most solar
• 2:06
  Speaker 2: per capita and we're adding more or about sixty percent
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  Speaker 2: of our daytime running power on Saint Croix is now solar,
• 2:14
  Speaker 2: and we're expanding that in Saint Thomas and Saint john
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  Speaker 2: district as well too. So doing really well economically, but
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  Speaker 2: we're feeling the pinch of that inflation in every single
• 2:24
  Speaker 2: dollar counts.
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  Speaker 1: I was going to ask about that. The complaints that
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  Speaker 1: you hear across the country right now, a lot of
• 2:30
  Speaker 1: them do stem from the cost of electricity and utility
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  Speaker 1: bills that people are seeing. Given you know, given your territory,
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  Speaker 1: the fact that you're a series of small islands, I
• 2:40
  Speaker 1: would imagine the ability to produce energy there. Is it
• 2:44
  Speaker 1: heavily Obviously solar is a big piece of it. Otherwise
• 2:47
  Speaker 1: is it heavily reliant on burning oil?
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  Speaker 3: Oh?
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  Speaker 2: Yeah, absolutely, we were. I mean before these solar fields,
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  Speaker 2: we were probably like ninety percent on fossil fuel. And
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  Speaker 2: you know, one of the things that that we boast
• 3:01
  Speaker 2: about where that we were able to keep the light
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  Speaker 2: build the percentage the cost of energy the same over
• 3:07
  Speaker 2: the last seven years.
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  Speaker 3: But our energy is forty three cents per kiloat.
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  Speaker 2: Most places are paying like ten or twelve, so it's
• 3:15
  Speaker 2: four times that the national average. And I had to
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  Speaker 2: do that in order to you know, keep the economy
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  Speaker 2: going because we've had fifty three cents, like you imagine
• 3:27
  Speaker 2: it going up to five times in national average and
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  Speaker 2: that really crippled us in terms of our small businesses
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  Speaker 2: and whatnot here. But you know, tourism is up. We're
• 3:36
  Speaker 2: from one point sixty two point five million people. We're
• 3:39
  Speaker 2: adding a new berth, we're building to wear new airports.
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  Speaker 2: The thing that we're worried about, especially now in this
• 3:46
  Speaker 2: immigration climate that we're in, is workers, right. We need
• 3:49
  Speaker 2: people to build we have. Last year alone, we issued
• 3:54
  Speaker 2: eleven billion dollars in contracts. We're talking about economy that's
• 3:58
  Speaker 2: only five billion dollars. So the government alone issued twice
• 4:02
  Speaker 2: the size of the economy in government contracts, and that
• 4:07
  Speaker 2: is going to continue this year, adding at least another
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  Speaker 2: two or three billion. And so where do all those
• 4:13
  Speaker 2: workers come from? That's that's really the challenge. Now this
• 4:16
  Speaker 2: is my last year in office. But I expect the
• 4:20
  Speaker 2: way the Northeast weather it's going, our tourism system season
• 4:24
  Speaker 2: will remain strong.
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  Speaker 3: I expect.
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  Speaker 2: So yeah, well if it would make you feel a
• 4:30
  Speaker 2: little better today, you know, we're feeling a cold front.
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  Speaker 2: It's down to like eighty or something like that. I
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  Speaker 2: was on the beach this weekend talking to some people
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  Speaker 2: from Boston and they were smiling so hard their face
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  Speaker 2: almost broke.
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  Speaker 1: I mean, yeah, might have been a personal friend of mine.
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  Speaker 1: A friend of mine just got back from a week
• 4:47
  Speaker 1: on Saint John and was and was you know, all
• 4:50
  Speaker 1: smiles when he returned. You talked a lot about economic stability,
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  Speaker 1: and I know, especially the unemployment rates substantially lower than
• 4:57
  Speaker 1: the mainland United States on a employment rate, which is
• 5:01
  Speaker 1: it speaks to a strong economy, also speaks just challenges
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  Speaker 1: obviously hiring workers. But it does seem to lead into
• 5:09
  Speaker 1: something that you've talked to us about before, which are
• 5:12
  Speaker 1: the benefits for US state side businesses relocating to the
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  Speaker 1: Virgin Islands. And again, Saint Thomas, Saint John, Saint Croix,
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  Speaker 1: can you speak a little bit to some of those
• 5:23
  Speaker 1: benefits that you see major businesses getting where they relocate.
• 5:28
  Speaker 2: Well more than ever now, I think things are really
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  Speaker 2: looking up for us. One of the little known foxes
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  Speaker 2: that the Virgin Islands sits outside the US custom zone,
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  Speaker 2: so all of the Trump tariffs that have been imposed
• 5:41
  Speaker 2: do not count for US. So you can bring in
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  Speaker 2: a foreign made good into the Virgin Islands at a
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  Speaker 2: one percent customs duty at thirty percent value and it
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  Speaker 2: goes back to the mainland as a US made products.
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  Speaker 2: So we've been talking to a lot of people who
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  Speaker 2: are facing tighte tariff hurdles as a result of the
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  Speaker 2: new changes but then even after that, then you know,
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  Speaker 2: as a corporation operating in the Virginal that has an
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  Speaker 2: export product anything from hotels to finance, you get a
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  Speaker 2: one hundred percent tax break on your state taxes and
• 6:18
  Speaker 2: then you get a ninety percent tax break on your
• 6:21
  Speaker 2: federal income taxes.
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  Speaker 3: So your effective tax.
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  Speaker 2: Rate is somewhere around one point seventy three to two
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  Speaker 2: point three percent annually, and that has really enabled people
• 6:31
  Speaker 2: to grow their businesses with using the same US currency
• 6:35
  Speaker 2: and then being able to do that. Like, the other
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  Speaker 2: thing that we have to is we have private banks
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  Speaker 2: that enjoy the same they're the same privileges, the same
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  Speaker 2: benefit package. You can have a non depository bank financing
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  Speaker 2: your projects other places, and that bank doesn't pay any
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  Speaker 2: taxes except that ten percent of the going rate.
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  Speaker 3: So it's a great kept secret.
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  Speaker 2: I recently just came from Ghana speaking to people about
• 7:04
  Speaker 2: West African exports and how other Virginillas can be a
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  Speaker 2: gateway into the mainland USA because we're a tax exempt
• 7:13
  Speaker 2: of a tariff examp on all products and we make
• 7:18
  Speaker 2: the determination of what our towers should be.
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  Speaker 3: So it's a good place to be right now. The
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  Speaker 3: other thing that's going really well for us.
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  Speaker 2: Is you know, now that Maduro or the President Maduro
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  Speaker 2: has been removed from Venezuela. We have the third largest
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  Speaker 2: refinery in the Western Hemisphere and it was built to
• 7:37
  Speaker 2: refine Venezuela and crude. So we're getting a lot of
• 7:41
  Speaker 2: people calling now that refinery is we're trying to get
• 7:43
  Speaker 2: it open. It was closed during the Biden era and
• 7:47
  Speaker 2: the Trump er is looking very positive for us in
• 7:50
  Speaker 2: terms of getting it open. So if we really start
• 7:53
  Speaker 2: getting all that Venezuela and crude back into the US,
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  Speaker 2: our refinery is one of them that we expect to
• 8:00
  Speaker 2: be started up, which will add to our growing economy.
• 8:03
  Speaker 2: Once again, we need employed employment, employment need workers.
• 8:08
  Speaker 1: Governor, you pointed out that this most recent State of
• 8:11
  Speaker 1: the Territories dress was your final. Is there anything you
• 8:14
  Speaker 1: would highlight or like to highlight as your most proud
• 8:17
  Speaker 1: accomplishments during your time in office in the territories?
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  Speaker 3: For us?
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  Speaker 2: You know, the one thing that I'm extreme two things
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  Speaker 2: I'm extremely proud of about. You know, COVID crippled a
• 8:27
  Speaker 2: lot of the Caribbean and a lot of the world
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  Speaker 2: in terms of their tourism product, and we've never made
• 8:32
  Speaker 2: so much money as COVID.
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  Speaker 3: We've managed that real well and brought in a lot.
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  Speaker 2: Our numbers actually down from COVID in terms of getting
• 8:40
  Speaker 2: people in here. And then we figured out a way
• 8:43
  Speaker 2: to keep our retirements. Government retirement system solve it and
• 8:46
  Speaker 2: it's the worst retirement system in the world, in the
• 8:50
  Speaker 2: most insolvent retirement system in the world. Rather and we
• 8:54
  Speaker 2: were managed to say that and put a little life
• 8:56
  Speaker 2: into it. I'm particularly proud about. That's just so many
• 8:59
  Speaker 2: people depending on about up on that here. But we've
• 9:01
  Speaker 2: been open for business. We hung our shingles seven years
• 9:04
  Speaker 2: ago and we've seen the first hotel in thirty years
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  Speaker 2: built in the Virgin Ons. We got two or three
• 9:09
  Speaker 2: coming along, and other projects that we've just been able
• 9:12
  Speaker 2: to say yes, yes, yes to business, what can we do?
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  Speaker 3: And it has been it worked out really well for us.
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  Speaker 3: These pesky term limits really got it. We got to
• 9:22
  Speaker 3: get rid of them.
• 9:23
  Speaker 1: That's Governor Albert Brian Junior who joins us today talk
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  Speaker 1: about his recent State of the Territory address. Governor, thank
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  Speaker 1: you so much for joining us. Appreciate it and I'm
• 9:33
  Speaker 1: sure we'll talk again soon.
• 9:34
  Speaker 3: Thank you. Stay warm,