An Irishman's Diary

JOURNALISTS lust after datelines from faraway places like children used to collect colourful stamps. The further, the hotter and the more obscure, the better to induce envy among colleagues and palpitations in the expenses department. Sadly, the fly in the ointment is that many of these locations are in war zones, or have become intimate friends with calamities such as earthquakes, flooding or famine. Travel there comes with a passport stamp marked “danger”.

Once in a blue moon, however, there comes a chance to visit a location that is, figuratively at least, off the map – far away and free from hardships. So it was this summer that a recent court case provided me with the opportunity to travel to the Caribbean and pay my first visit to a real live offshore tax haven. The British Virgin Islands are home to about 50 islands, 30,000 people – and over 800,000 offshore companies. As tropical paradises go, it fits the bill perfectly – consistently high temperatures, white sandy beaches and clear waters the colour of that minty substance favoured by toothpaste manufacturers. Leaving Ireland on a desolately wet and chilly summer’s day, I stepped off the third plane into a furnace-like heat which never lets up for the week I spend on the island of Tortola.

It gets better. No one pays income tax in the BVI. All those offshore companies stump up an annual registration fee of €350, which covers most of the islands’ budget. Tourism is the only other business of note – for the most part, not tourism as you and I know it, but high-end resorts for the fabulously rich. One new development, the sole occupant of a tiny coral island, can be rented out for $35,000 a night, I was told. Richard Branson, not content with owning one exclusive hideaway in these parts, Necker Island, has just splashed $35 million on a second contender for Shangri-La, the neighbouring Mosquito Island.

Most of the inhabitants here are descendants of the slaves who were imported to work the sugar and cotton plantations that formerly covered the islands. The Dutch, Spanish, French and Danes all breezed through over the years, but the British established control from the 1670s and have been here ever since.

As in other Caribbean islands, there was a strong Irish influence. This can still be sensed today on the sleepy streets of the capital Road Town, on Tortola, where streets bear names like Purcell Road and signs advertise Harneys law firm.

According to local historian Mitch Kent, the strong Irish connection with the BVI derives from the fact that local merchants traded heavily with the port of Liverpool. “It was customary for ships, after leaving Liverpool, to call in to Dublin before heading to the Virgin Islands, providing a direct link with Ireland which the other ports did not maintain,” he tells me. “As such, many Irish immigrants came to the BVI and settled.” Although the Irish presence on Montserrat is well known, Kent points out that well into the early 1700s that island was regularly subjected to vicious attacks by the remaining Carib Indians from the Windward Islands. Consequently, many Irish moved north to the Virgin Islands which had been swept clear of Indians during the previous century.

He reels off a list of other Irish names that have featured in the islands’ history, including Donovan, MacNamara, Fahie, Shannon and Slaney.

For centuries, smuggling was a mainstay of the economy and piracy was rife – one of the islands, it is claimed, provided Robert Louis Stevenson with the model for Treasure Island. The islanders lived a frugal, simple life based on agriculture and fishing, and migrated to other Caribbean islands for work when times were lean.

Today, however, the islands stand as a rare success story among developing countries. Living standards soared in recent decades with the growth of financial services and tourism. Credit is due to the islanders for plotting a path out of their earlier poverty but external circumstances also played an unexpected role. Fidel Castro’s ascent to power in Cuba in 1959 drove American money and investment elsewhere in the Caribbean. The conflict between the US and Gen Manuel Noriega in Panama in the 1980s hastened the end of the Central American state’s status as the local offshore tax haven of choice.

Today, the islands are a curious mix of British and American. Cars are driven on the left alright, but most are left-hand drive models imported from the US. Politically, the BVI is a British overseas territory, yet the currency is the dollar and most tourists fly down from the US.

The Irish are back too. Denis O’Brien’s Digicel is a big player in the mobile phone market, as elsewhere in the Caribbean. In the governor’s house, its garden a blaze of colourful frangipane and bougainvillea, the current occupant, Boyd McCleary, hails from Belfast.

McCleary, who started his working career in the department of agriculture in Belfast before embarking on a diplomatic career, is responsible for security and external relations, while the locals generally run their domestic affairs. His is a curious existence; unlike other diplomats, he has real power as the representative of Queen Elizabeth, but the BVI is as sleepy as foreign postings come.

Notwithstanding their placid face to the world, the islands are on the cusp of change. It isn’t quite trouble in paradise, but the global economic downturn has been felt even here. The offshore tax haven isn’t quite the moneyspinner it used to be, and calls for independence are multiplying. Now if that were to come to pass, the islands really would start attracting journalists.