Lessons for Bermuda in Bahamas tragedy?
A human and natural tragedy of catastrophic proportions. Are there lessons for Bermuda?
According to recent Dorian hurricane media reports, the Bahamas islands most heavily affected areas are lowlands, rising 15 to 20 feet above sea level in some respects.
Imagine experiencing your home and those around you collapsing, roofs escalating in screaming flight above you, rain, surf and thunder roar pounding at you for hours and hours and hours, storm surges moving ever higher “while the sharks circled outside their second floor home windows”.
Unendurable, yet so many did endure.
His face flat, his voice a monotone, his survivor’s terse statement embedded in countless replays of videos across the globe.
“No home, no job, no food, no life.”
So it was disturbing to read that the top FOB officials of their large neighbour to the west pronounce that no one from the devastation areas would be admitted without proper verifiable documentation: passports, visas, and credible testimony, etc.
Such regulations appeared to demonstrate a callous indifference by those outsiders whom it is assumed have never, ever, had to fight by their wits (and God’s grace) for their own and loved ones’ survival.
Except, ironically, in a matter of days, Bahamian immigration services have now applied similar restrictions on illegals residing within their island borders — accompanied by deportation proceedings.
When budgets are maxed out, humanitarian aid becomes monetised, too.
The Commonwealth of the Bahamas, composed of a sprawling network of hundreds of small/large islands, 30 of which are fully inhabited, is well connected to this day to Bermuda islanders because it was settled in 1648 by Bermudians on the island of Eleuthera.
Further population additions down the centuries were comprised of American Loyalists and their slaves. Bahamas abolished such abominable practices in 1834; the island became a welcoming haven for freed, escaped, illegal, and liberated slaves from other nations.
Modern-day parallels are eerily similar, between the two countries.
Bahamian and Bermudian abundances of natural island getaway sites, and proximity to mainland United States generated millions of tourism and international business journeys over the years.
• Both countries are basically two pillar economies: tourism and international business: tourism is 80 per cent of the Bahamas GDP; Bermuda’s international business occupies that 70 to 80 per cent status, with our tourism less than 10 per cent
• Both countries almost entirely dependent upon foreign investment cash flows
• The Bahamian and Bermuda dollars are pegged to the US dollar, but neither is legal tender outside either countries
• Bermuda and Bahamas face costly ever-raising-the-bar compliance regulatory pressure from the OECD, FATF, EU, Tax Justice, and numerous large country revenue and law enforcement agencies that quite honestly seek to impede free trade by impeding both islands’ economic fortitude
• The Bahamas became a focus of multiple IMF reviews since 2009 when government deficits had spiralled the national debt to double in size
• Bermuda Government has had a relentlessly non-reductive debt liability (encompassing active and unfunded liabilities) that increased exponentially over ten years from 2008 onward. The Fiscal Responsibility Panel was hired to review and make recommendations for Bermuda Government fiscal conservatism.
• Both Bahamas and Bermuda have structural unemployment issues.
The observations and recommendations from the FRP and IMF are again incredibly similar:
• Great dependency upon foreign investment
• Increased taxes to assist in consistent government debt reduction
• Strong public financial management of a fiscal framework to achieve budget balance
• Implementation of a natural disaster resiliency fund
• Vulnerability to external events
• High level of public debt and contingent liabilities
• Effect of an ageing population — Bermuda only
• Management of rising health costs.
The radically distinct differences
1a: The Bahamas became independent in 1973.
1b: Bermuda is British Overseas Dependent Territory.
2a: Bahamas population is 350,000-plus with a significantly larger cumulative landmass, close to highly developed nations, plus it is a young population.
2b: Bermuda’s population of around 61,000 has a much smaller landmass, not as close to nearest large country borders, and more eroding, our population is older.
3a: Bermuda islanders have unimpeded rights, free from bureaucracy, to travel to the United Kingdom for tourism, work, education, and permanent resettlement. In times of internal stress and natural disasters, Bermuda can call upon UK resources, including the military.
3b: Bahamas is an independent nation. Access through any other country’s borders requires a visa and extensive background documentation. Strategic changes in US immigration policy will severely limit asylum seekers, and potential immigrants with less than visionary skills won’t qualify for the exceptionally talented visas.
4a: Bahamas is a member nation of the International Monetary Fund, giving access to qualified funding and loans under their member quota resources.
4b: Bermuda is not, although may be blanket-covered through the UK.
5a: Bahamas is a member of the Inter-America Development Bank, another source of funding and financial assistance.
5b: Bermuda is not.
Last week the Bahamas Ministry of Finance announced a $100 million drawdown from their IADB credit line. The long, massive financial, emotional, and physical recovery (housing, job retraining, basic necessities, healthcare, schooling and a future) for an estimated 25 per cent of the population — about 70,000 people — has begun.
They will need all they help they can get!
Bahamas tourism will and should continue unabated as travellers realise that Bahamas’ largest tourist destinations were unaffected by Dorian.
Everyone loves sand, sparkling seas, and radiant blue skies, a respite from cruel, northern fall and winter soon to arrive.
We wish them well and God’s blessings.
Edward Harris, PhD, Retired EDir Emeritus of the National Museum of Bermuda
International Monetary Fund: Bahamas, May 2018: Country Report No 18/19
Inter-American Development Bank focused on assisting island economies to pre-prepare for climate change and natural disasters.
Next: Sudden disrupters of climatic events, and complacent financial tolerance can torpedo an idyllic, serene existence. How will/does Bermuda manage a disrupter of epic proportions?
• Martha Harris Myron CPA CFP JSM: Masters of Law — international tax and financial services. Dual citizen: Bermudian/US. Pondstraddler Life, financial perspectives for Bermuda islanders and their globally mobile connections on the Great Atlantic Pond. Finance columnist to The Royal Gazette, Bermuda. Contact: email@example.com
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