What needs to happen on December 18

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  • Boom and bust: The graph portrays surging growth followed by three years of recession

    Boom and bust: The graph portrays surging growth followed by three years of recession

On December 18, 2012, Bermuda will face the same problems that it faced on December 16, the day before the election. The solutions seen and needed from and after December 18 will be the same as the solutions that were apparent on December 16, 2012.

Problem — By December 16, 2012, over 3,500 unemployed Bermudians. This is the highest level of unemployment since 1939. On December 18, 2012, unemployment will still be increasing.

Solution — Create more on-Island jobs by helping the job-providing local and international private sector to expand and grow. For this, overseas investors must come to Bermuda, set up their businesses in Bermuda, and operate their businesses from Bermuda using on-Island labour. This can be accomplished by modifying the 60/40 rule, removing term limits (particularly in the International Sector), granting permanent residency and expanding the city limits. This would equate into job opportunities for Bermudians.

Problem — Year-on-year, Government has less and less revenue. In this setting of decline, Government cannot increase taxes, nor can Government indulge in stimulus spending.

Solution — Grow the private sector economy by getting overseas investors to set up their businesses in Bermuda, and operate their businesses from Bermuda, which also enhances local businesses. Foreign investors will only come to Bermuda if we make them feel welcome and integrate them into the local population. By foreigners returning to Bermuda, there is an increase in opportunities for jobs, rental of commercial and residential properties and Government revenue.

Problem — Bermuda’s national social order and stability is increasingly threatened by on-Island gang and gun violence. Rising unemployment and increasing underemployment poses a second-level threat to social order.

Solution — A national initiative in which all residents can participate so that the negative impacts of unemployment and crime can be reduced.

Problem — Falling residential population and consequential fall in on-Island demand for all goods and all services.

Solution — Grow the residential population. Bermudians are only increasing (but only by granting Bermuda Status) at about 180 per year (and that’s declining) the answer is to import non-Bermudians who will replace our lost residents, and reopen job opportunities to Bermudians.

Problem — A shrinking economy and a reduction in job opportunities has a negative effect on all kinds of opportunities for individuals, businesses and the country as a whole.

Solution — Build up the residential population, thus increasing on-Island demand for all goods and services which will increase job opportunities for Bermudians and businesses who supply the demanded services.

Problem — Foreign Currency Earnings have been declining since 2008. This reduces Bermuda’s overall ability to pay for the 98 percent of goods and services that Bermuda must always import.

Solution — Grow International Business which currently provides $85 out of every $100 of Foreign Currency (US$) that is earned. This will require an open-door policy for all lawful and legitimate International Business entities.

Problem — Tourism needs to survive at a level that makes current tourism centred on Island properties and services profitable; and that maintains the airlift capacity that is essential to International Business.

Solution — Get total Air Arrivals back up over the 350,000 level (currently below 250,000) and get total Tourism revenue back up over the $525 million level (currently around $410 million). This can be accomplished by creating an iconic centrepiece which makes Bermuda an attraction that will entice people to want to travel here such as redevelopment of the Hamilton Waterfront to include a hotel, casino, high quality shopping and restaurants, a yachting basin, performing arts and convention centre and other amenities.

Problem — The amount of money that the Government must pay to overseas lenders to service the debt in 2012 is $13 out of every $100. This cannot go on rising at the rate that occurred between 2008 and 2012 when it went from three dollars to $13 .

Solution — Government must reduce its spending, reduce all of its reduce-able costs, and return to a budget where annual spending matches annual revenue. Debt service payment will take a $27 million jump, in 2014.

The above and other solutions that will grow the economy should be the first order of business of the next Government that will put Bermuda on the path to economy recovery.

Get involved and send us your thoughts. This continues to be a collective effort by all Bermudians and we need your continued support, comments and ideas. For further information or to express your comments e-mail Suzie Arruda at economy@challengerbanks.bm or visit us on Facebook — Regeneration of Bermuda’s Economy

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Published Dec 10, 2012 at 8:00 am (Updated Dec 10, 2012 at 12:05 am)

What needs to happen on December 18

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