Economy of the United States Virgin Islands

[1] In mid February 2017, the USVI was facing a financial crisis due to a very high debt level of $2 billion and a structural budget deficit of $110 million.

On July 3, 1848, after a rebellion the previous day, the governor Peter von Scholten granted the slaves emancipation, which was against the wishes of Danish Crown.

Over the following years, strict labor laws were implemented several times, leading planters to abandon their estates, causing a significant drop in population and the overall economy.

Federal excise taxes collected on rum and other distilled spirits are rebated, or covered over, to the government of the Virgin Islands.

[13] An industry (World Travel & Tourism Council) publication indicates that money spent by foreign visitors totaled $1,318.7 million.

When those are totaled, it is clear that a large percentage of the 37,613 non-farm workers are employed in dealing with tourists; of course, serving the local population is also part of the role of these sectors.

The report from the VI Bureau of Economic Research calculates that the labor force totaled 48,278 in the first half of 2016, with 42,752 persons classified as civilians.

The May 2016 report does not discuss the massive debt and provides this outlook: "The economy will continue on its present course of mild improvements with the major contributions coming from tourism, manufacture and construction In addition, several initiatives are being undertaken by Government ... will assist in the recovery.

[15] Analysts reviewing the economy often point to the closure of the Hovensa oil refinery which had been the islands’ largest private sector employer.

Along with a vibrant tourism industry, rum exports, trade, and services will be major income sources in future years".

[2] A New York-based research group made the following comment in late 2013: "Looking ahead, we note that the tropical weather and picturesque beaches will continue to draw tourists, and natural resources bode well for rum production.

However, the group also added that "it may also be worthwhile to look at the physical infrastructure and human capital built up over the years, with an eye toward using it for other types of productive economic activity".

By comparison, there were 1,487 natural resource and construction jobs and nearly 11,000 people worked in some aspect of agriculture in the first half of fiscal year 2016.

[1] With the help of funding from the American Recovery and Reinvestment Act of 2009, the Virgin Islands Next Generation Network (a government-owned subsidiary)[18] began bringing broadband internet access to the territory, in an effort to stimulate the technology sector and business generally.

Many securities are backed by specific revenue streams, like excise taxes tied to rum production by Diageo Plc and Cruzan International Inc., that go straight from the U.S. Treasury to an escrow agent.

[3] A report from Government House indicated that these steps were necessary "given that cash revenues flowing into the treasury are insufficient to meet current expenses".

Commodities affected would include rum, tobacco products, beer and sugary drinks, as well as timeshare unit owners and internet purchases.

[5] A coalition consisting of the Chambers of Commerce in the St Croix and St Thomas districts, the USVI Hotel and Tourism Association and American Resort Development Association issued a joint statement on February 14, 2017 asking Governor Kenneth Mapp to withdraw the sin tax bill.

[22] Mapp's response to the coalition included his understanding of the group's recommended strategies: "For example, the chambers are asking that we slash the salaries of all government workers by 30 percent, that we increase property taxes on residential and commercial property and that we impose an income tax surcharge on the salaries of all workers in the Territory," he said.

"[3] The CIA's research concluded that the islands hosted nearly 3 million tourists per year (2014 estimate), mostly from visiting cruise ships.

However, the more recent May 2016 estimate for the number of arrivals by the VI Bureau of Economic Research totals 1,208,295 by cruise ship and 403,876 people by air.

[1] * Public debt: 45.9% of GDP (2014) * Unemployment rate: 13% (2014) 11.5% (first half of 2016) * Civilian labor force (2016) 42,752 persons * Private sector jobs (2016) 71 percent of the total * Average salary (2016) $39,258 (private sector, $34,088; public sector $52,572) * Rum Shipments in six months (2016) 8,136.6 proof gallons * Average value of homes sold (2015) $508,811 ^These three form the SSS islands that with the ABC islands comprise the Dutch Caribbean, of which *the BES islands are not direct Kingdom constituents but subsumed with the country of the Netherlands.