Action is needed and needed now
For a company to grow and become competitive both locally and internationally it must be in a position to acquire the necessary employees with the abilities to cater to the demands of its clients. In order for the company to continue to turn a profit, management must ensure that the employees are comfortable, appreciated and compensated. However, if the company does not maintain the relationship with the employee and another company (either local or foreign) makes an offer, they are very likely to accept the offer, taking with them their expertise and vital contribution to that company. As more employees leave, the company begins to shrink and suffer. Our economy is no different.
When Bermuda's economy boomed as a result of a switch from a tourist based economy to an international business based economy, so did its demand for labour. In order to support the growing demand for services and infrastructure required in keeping the economy vibrant and growing, foreign manpower was imported. The demand for foreign manpower was also due to the fact that with an average workforce decline of 63 people per year in the past 11 years, there are not enough Bermudians available to fill all the positions required.
International Business was expected to be treated fairly and was willing to make its contribution to Bermuda. Both Bermuda's economy and Bermudians alike benefited from their presence. However with the implementation of restrictive policies and legislation, Bermuda's relationship with International Business has been considerably diminished and when other countries such as Switzerland, Ireland and other jurisdictions made them feel more welcome, they departed our shores taking with them their expertise and vital contributions. As a result Bermuda's economy is shrinking and Bermudians are suffering.
The following chart shows us the effect over a four-year period that the departure of International Business or people has on Bermuda:
Percentage change: -7%
Percentage change: -12%
GDP per capita
Percentage change: -9%
Employed by international Business
Percentage change: -14%
Jobs filled by Bermudians
Percentage change: -4%
Work Permit Holders
Percentage change: -19%
For Rent Ads in Bermuda Sun
Percentage change: +1,276%
Percentage change: -40%
l With the Bermudian population growth being static and only 26,000 Bermudians currently in the national workforce, there are not enough Bermudians available to fill all of the positions necessary to keep the economy moving. We need the foreign workforce to fill the gap.
l International Business brings in $0.85 of every dollar that enters Bermuda's economy. As far back as 1996, Bermuda's GDP and GDP per capita grew only because of the influx of human capital in the form of Guest Workers.
l The foreigner in the international sector creates jobs for Bermudians at a certain level and pay bracket. If the International Business sector diminishes/leaves, the job that the Bermudian enjoyed in the International Business sector at a certain level is now gone.
l The Bermudian also suffers as there are no longer enough foreigners who are willing to rent homes, apartments and condos and pay the matching rent. The Bermudian now has to deal with an empty home and a mortgage payment that they may not be able to afford. Just as in the retail sector, the foreigner leaves and takes his money with him leaving the Bermudian with lost revenue.
l The retail sector will suffer as there will not be the additional need for services. This is a gap that tourism cannot fill as they do not have a need for these services. In August 2011 retail sales had been in decline for 41 consecutive months. The funds that were previously paid to the retail sector for the various services are no longer available and businesses have lost that revenue.
We have and will continue to need the foreign component in our economy. We need them to feel welcome, comfortable and appreciated. Restrictive Policies and legislation must be revised such as:
l Remove the 60/40 rule except on commercial landholdings
This would encourage businesses to bring their financial and intellectual capital here. Also, with Bermudians retaining the land, they would benefit from the rent received.
l Commercial/Retail Business: Foreign ownership and management with Bermudian's retaining real estate. Allow high end retail shops managed, financed and owned by non-Bermudians
This would improve the high end shopping for tourists and locals, employ Bermudians and Bermudians would also collect rents.
l Bermuda should free up the telecommunications market to maximise new opportunities in technology and minimise cost as a result of competition
This would increase competition and make Bermuda more relevant in the international stage. Due to our limited resources when the latest technology is offered we should have an open mind to make Bermuda as current and efficiently connected as possible e.g. most places worldwide are into a 4G network and quickly moving beyond that. Bermudians would also benefit as they would be able to get more for their dollar.
l Eliminate Term Limits
People must see a personal benefit in leaving their countries to come and work here. At the same time, safeguard Bermudians by ensuring that any future grants of Bermuda Status or Permanent Residency are tightly controlled and that the current and future cultural and social values and interests of Bermudians are strongly protected.
l Development of the Waterfront to include:
o Convention/Entertainment Center
o Retail shops
This should be a high priority which would bring activity back to the City of Hamilton.
l Remove tax on boats and increase mooring fees to enable Bermuda to become an international boating centre
This would encourage more foreigners as well as Bermudians to bring their boats here. This would translate into more jobs at marinas and an increase of revenue to the Government — “Queen's Bottom”.
Bermuda and Bermudians must be prepared to reinvite and re-welcome thousands of foreign persons (human capital) back to Bermuda. We must remember that in order to sustain our economy we must have foreign labour (both white and blue collar). To do nothing will only make what we have been experiencing over the past four years worse and harder to remedy. The decline continues to get steeper in GDP, job opportunities, assistance programmes, rents and social values. To delay action is dangerous and destructive.
For further information or to express your comments e-mail Suzie Arruda at firstname.lastname@example.org or visit us on FACEBOOK — Regeneration of Bermuda's Economy.
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