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Time to act

Wednesday’s editorial dealt with some of the problems the Bermuda economy is facing, and what the causes are.

Regardless of whom or what was responsible, what is important is to come up with solutions and means of bringing Bermuda out of the current crisis.

If it is accepted that the main cause of the economic downturn for Bermuda is the reduction in employment and the departure of many job creators, whether people or companies, from the Island, then the means to recovery must lie in finding ways to bring investment and job creators back to Bermuda.

The other lesson learned from the recession is that there is risk on being too dependent on one sector of the economy. And a sustainable economy should not be driven by a sector like construction, which it volatile by its very nature.

The Government’s responsibility in this is first to create the conditions by which the economy can grow and good jobs can be created.

In a global economy, this means making Bermuda attractive to job creators, whether Bermudian or otherwise.

Because Bermuda is expensive, this needs to be done through reducing the costs of doing business in Bermuda, whether this is a result of taxation or undue regulation.

In this sense, reducing the tax burden on employers and cutting import costs would help.

This would also free up money now going in taxes to be spent and invested in the general economy, thus improving confidence.

Clearly care needs to be taken with this. Government still needs revenue and too deep tax cuts would cause the already large deficit to balloon, which would be undesirable.

But targeted tax cuts would help the economy to grow, and a growing economy would generate more Government revenue thus creating a virtuous circle.

Quicker response to business ideas and development plans would also help. Certainly, Nelson Hunt’s comments on the length of time it takes to get agreement to develop hotels in Bermuda is relevant to this.

Measured consideration of policy changes is a good idea. But inertia is bad. Government has been debating telecommunications licence changes for years now. Some bad ideas, like the monster regulator, seem to have been killed. But the uncertainty has been disastrous too.

And Government must reverse the immigration policies that have now given Bermuda the reputation of being business-unfriendly.

Naturally, these must be balanced against the need to protect Bermudians. Businesses understand this. But when policies are perceived to be preventing from businesses from being successful, or where they feel they can achieve the same goals more easily elsewhere, then this is a disincentive to businesses coming to Bermuda or continuing here.

Bermuda needs to make sure that the interests of Bermdians are balanced against the needs of job creators, and the fact that jobs are the most important element of helping any Bermudian should not be forgotten.

At the same time, the need for flexibility and speed is essential. At the end of the last parliamentary session, Government floated some ideas for immigration liberalisation and Economy Minister Senator Kim Wilson has discussed them since.

But the Premier of the Cayman Islands said on Wednesday he planned to suspend that territory’s term limit policy for two years. So while Bermuda debates, others act. Bermuda needs to do the same before it is too late.

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Published September 16, 2011 at 9:00 am (Updated September 15, 2011 at 7:34 pm)

Time to act

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