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Hon. Marlon A. Penn - MP British Virgin Islands

The Impact of The Informal Economy on Economic Diversification in Small States – The BVI Perspective . Hon. Marlon A. Penn - MP British Virgin Islands . Classic Definition of Informal economy .

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Hon. Marlon A. Penn - MP British Virgin Islands

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  1. The Impact of The Informal Economy on Economic Diversification in Small States – The BVI Perspective Hon. Marlon A. Penn - MP British Virgin Islands

  2. Classic Definition of Informal economy “The term “Informal Economy” thus refers to all economic activities by workers and economic units that are – in law or in practice – not covered or insufficiently covered by formal arrangements.”

  3. BVI’s Informal Economy • Unregulated/Legal Activity • Tourism related businesses/Jobs • Construction Jobs • Undocumented /Illegal Activity • Gambling • Prostitution • Sale of Illicit Drugs

  4. Snap Shot of BVI’s Economy • Population of Approximately 27,000 • Mainly Service Based Economy • Financial Services • Tourism • Construction Activity • Labour Force 13,000 • GDP of $951,823 • Per Capita $38,500

  5. Informal Economy’s Impact on Economic Diversification • Conclude that the Informal Economy’s Impact to Economic Diversification is Negligible or has more of an Adverse Impact on the Formal Economy. • Contributing Factors • Amount of Persons operating in the Informal Sector is small • Tax System (Payroll Tax system, first $10,000 exempt) • Gambling (The Purchase of Lottery Tickets) • Sale of Illicit Drugs (Especially Marijuana which is mostly used for recreational proposes)

  6. The Policy Maker’s Perspective • A more coordinated effort for the collection of data on the informal economy is needed, to understand the true impact of this sector to the formal economy.

  7. Thank You

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