Keeping it in the family

  • In the wars: PLP chairman Damon Wade with deputy chairwoman Lauren Hayward-Bell (File photograph by Sarah Lagan)

    In the wars: PLP chairman Damon Wade with deputy chairwoman Lauren Hayward-Bell (File photograph by Sarah Lagan)

The argument between David Burt and Progressive Labour Party chairman Damon Wade helps to show why the Premier’s recent assault on the status quo and white establishment businesses is bad for the economy, bad policy — and probably won’t help the people it is supposed to.

At first glance, the PLP’s actions in calling for Mr Wade to resign look honourable and a welcome change from past administrations, which were wracked with perceptions of cronyism. But the picture is not that clear.

Mr Wade’s alternative energy and engineering company won a bid for work at the National Sports Centre. But, subsequently, he claims his efforts to start work on the project were stalled and delayed.

Meetings with the Premier, public works minister Lieutenant-Colonel David Burch and Major Marc Telemaque, the Secretary to the Cabinet, made little progress and it would appear that although Mr Wade’s company had been awarded the bid after a tender process, the details of the project were troublesome.

Mr Wade’s attack of his own government at a meeting of the PLP central committee shows that two years after its stunning election victory, there are simmering tensions within the governing party. Mr Wade’s speech appears to be symptomatic of bigger problems, rather than simply being the complaints of a disgruntled contractor.

It goes without saying that public money should be spent carefully and prudently. Tenders should go to the individual or company who can achieve the desired goal with the optimal balance of efficiency and quality, regardless of ethnicity, political connections or any other factors.

To that extent, the PLP executive committee’s unanimous vote calling on Mr Wade to resign as chairman was correct, although there have been complaints that the right process was not followed.

And yet, as commentator Bryant Trew has noted, Mr Burt and the PLP have largely brought this on themselves. Mr Wade might have been forgiven for thinking that Mr Burt was talking about him when he delivered his speech to the PLP conference in November. In that speech, he attacked the status quo and promised to mobilise pension funds to capitalise government-backed, black-owned businesses to reverse the wealth gap between whites and blacks in Bermuda. And the PLP’s election campaign, with its emphasis on “Two Bermudas” and “Putting Bermudians First” could also be interpreted as making race a criterion in how government contracts are awarded.

Such a policy may be justifiable, as this newspaper has noted before. After all, whites in Bermuda benefited from an uneven playing field for centuries. Expecting inequities to be fixed after 50 or so years of a more even arena is not particularly reasonable.

But the problem is that executing these forms of positive discrimination is much harder in practice than it is in theory, as Mr Wade’s experience shows.

This newspaper has not seen the bid for the NSC contract. But it’s difficult to believe that a black-led PLP government would delay a plan by a black-owned business without deep consideration. So there may be more to this than has come out so far.

Mr Wade, in his recorded comments and in a rebuttal allegedly from him posted on social media, puts up an alternative view; namely that he is an outsider and rebel within the PLP. In fact, he claims, he ran for chairman without the support of Mr Burt and the party leadership, and felt he had a mandate to democratise the party and to give the grass roots more say over its direction.

This included advancing the cause of black-owned businesses. And Mr Wade is effectively saying the PLP leadership agrees with this — the disagreement seems to be over which black-owned businesses can get ahead.

And this is the problem that arises as soon as any government moves away from the idea of awarding contracts or public money on the basis of merit — cost, efficiency, track record and so on. In fact, the Government, through its various procurement offices, has developed matrices that measure bids in an objective way as possible and to avoid favouritism as much as possible. The ownership and staffing of the company can be a part of that equation, but these measures need to be applied with greatest objectivity.

As soon as you move away from that, you run the risk of being accused of favouring “friends and family” or worse, the two wrongs make a right philosophy — which Mr Wade did indeed bring up — that because whites allegedly steered work to their friends, there’s nothing wrong with blacks doing it as well; after all, the end — reducing inequity — surely justifies the means.

If only it were that simple. All of these approaches are open to abuse, which in turn leads to cynicism, disillusionment and mistrust of public institutions. That kind of corrosive mistrust is unhealthy for any government — it can hollow it from within and without.

Mr Wade appears to have done himself few favours in giving the impression there’s nothing wrong with a friends-and-family approach to public finances. But it would be wrong to shoot the messenger — it’s unlikely that he is the only PLP supporter who is disappointed with the Government’s record since that landslide win in July 2017.

With an economy that is essentially flat, a fintech initiative that has little to show for all of the effort expended on it, and few resolutions to the other problems Bermuda faces, it would be no surprise if people are getting impatient.

But that does not mean that the rulebook should be thrown out. Part of the problem is that there is a perception that the Bermuda economy is unchanging and that making it more equitable is simply a matter of redistributing the wealth within it. But this approach — history is replete with examples — is more likely to lead to capital flight and a collapse in confidence, which would likely make life worse for the very people it is supposed to help.

It is better, surely, to find ways to expand the economy for all. Within that process, it can and should be possible to create ways for small businesses and entrepreneurs to get ahead, to reduce, where possible, monopolistic practices and rent seeking — where vendors can overcharge because they have a near monopoly on a good or service — and to encourage a true enterprise economy where initiative, energy and boldness count for more than one’s race, gender or last name.

Doing so requires a new approach to Bermuda’s economy, and Mr Burt has shown the willingness to be bold. Now he and his government need to grasp the nettle.

UPDATE: this editorial has been amended to make clear that Damon Wade’s company won the bid for the National Sports Centre contract and that it did not go out for a second tender. We apologise for the error

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Published Jan 7, 2020 at 8:00 am (Updated Jan 10, 2020 at 3:10 pm)

Keeping it in the family

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