Be strong. Things must get better
On both sides of the northern border that connects the United States to Canada, economists are bracing themselves for the possibility of a recession. Some are pointing to the trade war between the US and China as partially, if not totally, the trigger to the decline in trade worldwide.
Eighty per cent of China’s export goes to places other than the US, so while tariffs do have an effect, they are negligible when compared with the corresponding effects on the price of goods entering North America and the downturn in exports from the States.
They used to say when America sneezed, Bermuda caught a cold. Although Bermuda is not a producer country, where the sale of farm produce or the import of car parts is esoteric chatter way above our heads, we do depend on the expendable cash that the citizens of America use to make their trips and have money to spend on our streets.
Many Bermudians have adjusted to the new normal, which is a considerable downturn from days gone by. We just cannot appreciate right now what worse could possibly look like.
Landlords, in particular, could be faced with the prospects of either slashing their rates or having no tenants. This will be particularly true with commercial real estate. How does a store keep its doors open when there are more staff than customers?
OK, I don’t want to preach doom, but do brace yourself. My prediction is it will be a short period of real gloom, but followed by a bright recovery towards a boundless future.
Every nation is tested. The US is being tested while the world watches to see how it defines itself and what it means to the world. Will the US shrug off its present plunge towards self-absorption and extreme white nationalism or will it return to the role as a beacon of hope and democracy for the world.
Understandably, Bermuda does not have such a global reputation or role to play. However, will or can we remain as a courteous civil society with compassion for each other, or do we descend into criminality, mistrust and every man for themselves owing to harder times?
Will the landlords make the market “tough it out” and deliver empty buildings and bankruptcy, or will they bend it out, for future’s sake?
This may be Bermuda’s test where the idea of shared sacrifice takes on greater meaning. Where institutions who were used to receiving a “pound of flesh” get a little milk money instead.
Utilities may become hard-hit where the receivables become the largest asset on the balance sheet, when a bad customer looks better on paper than no customer and a pile of unrecoverable debt that auditors fear to delete.
Of course, this is satire when the new commercial joke is about businessmen slouched on bar stools and cafés bragging about how much money they are owed instead of how much they have.
On the contrary, I am an optimist and the good books do say “Give good news and spread good tidings”.
So, truthfully, I do believe we will have better days ahead — not because of any crystal ball, but because of global trends and new realisable opportunities.
The reality is the world economy is in tatters and amid it all, we still have a very favourable location, enough credibility in our system and the ability as a people and jurisdiction to bounce back.
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