Burt: growth is way out of crisis
The fintech industry can help keep Bermuda from “economic ruin” and prevent the need for devastating cuts, according to the Premier.
David Burt acknowledged financial technology had experienced setbacks since it was hailed as a major job creator in the early days of his premiership.
But he insisted it had created economic activity and Bermudian jobs, and said local law firms and the Bermuda Monetary Authority were now developing a regime to “make it even more attractive”.
Mr Burt named fintech, cannabis and the long-term insurance sector as industries that could help Bermuda battle out of an economic crisis caused by the coronavirus pandemic.
In an exclusive interview with The Royal Gazette last week, he said that “austerity has been forced already” on the Government but said that the island had been comfortable “for far too long” on proposing cuts.
He added: “The never-ending cycle of cuts means economic ruin for the country. That’s not the conversation we want — how do we turn these away from austerity conversations to growth conversations?
“When we talk about industries such as fintech and cannabis and the expansion of the long-term insurance sector on this island, that is all about changing the narrative for our growth and expansion of the economy versus what are we going to cut.
“In my conversations with union partners, I don’t want to be back here next year and the year after looking for additional austerity.”
Mr Burt had declared Bermuda a “global leader in fintech legislation” when the Government passed legislation allowing the BMA to regulate people conducting digital asset business in 2018.
The opposition One Bermuda Alliance has repeatedly claimed the project failed to live up to that promise.
Late last year, Mr Burt said eight fintech companies had established offices on the island, with a total staff of 31 including 15 Bermudians.
Mr Burt said in his interview: “Is it turning out the way I’d hoped? Not entirely.”
But he continued: “Is it not doing what it was supposed to, to provide more jobs and activity in our economy? It is doing that.”
He added: “I think there will continue to be growth in that area. It works very well with what we’re doing in the insurance space.”
He said there would have been “far faster growth inside that industry if we had the ability to bank the proceeds of fintech”.
Mr Burt said he recognised the need for caution on the part of Bermuda’s banks.
He continued: “But we’ve seen other jurisdictions who have been able to extract more because they have more flexibility when it comes to their local banks.
“When people want to say there’s no jobs being created, that’s not true ... it is bringing and generating economic activity on island, which is what its intent was.
“Would I like for it to generate more? Absolutely. Am I disappointed with what it has generated so far? No, I am not.”
He said licensed companies had set up shop, with Jeff Baron, the former national security minister in the OBA administration, among those employed.
“We have people who are continuing to work in that industry, Bermudians getting hired, companies going through the licence process — the offering which we put in place on the digital assets side is certainly compelling. We have seen companies take up the licensing process.”
Mr Burt warned there were “no silver bullets when we talk about economic recovery”.
“You have to make sure you are nimble. My outlook is very simple. If it creates five jobs, I am all for it. We want to try ways to continue to have job creation; fintech is one thing, cannabis is another.
“We’re going to continue pressing, because the country needs a government that is going to listen to the advice from the private sector and push down those things.”
Mr Burt added: “Remember, fintech is not something that came into my head.
“The fintech initiative was something the private sector came to the Government and said, ‘this is something we believe you should be pushing’.
“Our law firms are doing a great job of selling it and working with the Bermuda Monetary Authority to modify a regime to make it even more attractive.”
Mr Burt also gave an update on talks with unions representing public officers and pledged there would be “absolutely” no cuts in numbers.
He said the Bermuda Industrial Union, the Bermuda Public Services Union and the Bermuda Union of Teachers were “on board” with the Government’s cost-cutting proposal.
“We are working to try and finalise items with the three smaller unions, which represent the uniformed services,” Mr Burt said.
“The agreement that was made was with the acceptance of the 10 per cent reduction was there would be no cut in headcount.
“That’s an absolute certainty we can lay out. But if there is not the acceptance of those conditions, the Government has to find ways to make savings on payroll.
“The Minister of Finance is going to the international markets, and we have to demonstrate that we can hold the line on spending where it’s necessary to do so.”
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