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The island of ‘unlimited impossibilities’

Crisis pending: Bermuda has no option but to reform and restructure the bureaucracy

Ours is not a time of robust self-confidence and national pride.

The prevailing mood is one of muted pessimism and concern; fatalism and resignation have largely replaced faith in ourselves and our country.

For decades the buoyant Bermudian self-image had been rooted in the seemingly unending economic growth spurt which got under way after the Second World War.

This almost uninterrupted, decades-long upward trajectory brought with it increased equality of opportunity, social progress and belated political and institutional reforms.

As recently as the late 1990s and the early years of the 21st century, when the economy was still expanding at a breakneck clip, Bermuda was widely considered an island of “unlimited impossibilities” as one wag glibly — but not entirely inaccurately — put it.

But this historically unprecedented economic boom finally did come to an abrupt and particularly jarring end in 2007/08.

And when that happened, Bermuda and Bermudians inevitably entered into a period of self-doubt and uncertainty.

However, our current deflated self-image is not likely to last long. We are heirs to a long and proud tradition of boldness, innovation and enterprise.

Our forebears, after all, created masterful new ways to harness the insubstantial wind with ingenious sloop and rigging designs.

By doing so they transformed remote Bermuda into what has been called “the eye of all trade” in the Atlantic maritime economy of the 18th and 19th centuries. So it seems all but certain we will find ways to manage and overcome our present woes.

A will to achieve the seemingly impossible, a resilient and resourceful temperament, these have always been the hallmarks of the Bermudian character. Adversity eventually spurs us to action, it has never permanently crippled us; hardship has always forced us to critically evaluate our choices, learn from our errors and retrench and recalibrate where necessary.

Clearly we have a period of reflection and reappraisal ahead of us. Equally clearly we will be faced with some decisions we would rather not have to make. But they cannot be postponed indefinitely.

In simple terms Bermuda must make the shift back to a robust, private sector-driven economy, with Government providing essential support services and infrastructure to facilitate such growth.

Unessential services will have to be eliminated, trimmed or privatised because we can literally no longer afford to pay for them.

Over the last decade, while the size of the Bermuda population has dwindled and the economy has softened, the Government added 860 new public sector jobs.

The total number of white-collar workers went from 4,907 in 2003/2004 to 5,767 in 2011/2012. As has been pointed out more than once in recent weeks, that is the equivalent of adding an entire Fire Department (103 staff), Police Service (481) and Department of Corrections (278) to the Government payroll at a time when public revenues were going into free fall.

Government, it should be remembered, only creates the conditions for businesses to create wealth; it does not generate a single penny of economic activity by itself. Private sector tax dollars are required to pay for every public service salary and every public sector outlay.

Bermuda is faced with a shrinking tax base, stagnant economic growth and increased borrowing and deficit-spending to close our budget gaps. The rapid — and financially unsustainable — rate of growth in the Civil Service and an attendant increase in red tape both mitigate against private sector investment and new employment opportunities.

So we have no option but to reform and restructure the bureaucracy, to introduce the sort of efficiencies we are now free to choose and craft and shape for ourselves. For in the not too distant future they may well be imposed on us.

Outside lending agencies and regulatory institutions will inevitably balk at continuing to loan Bermuda money it can never hope to pay back without a comprehensive overhaul of its public sector and a renewed emphasis on facilitating private sector economic growth.

Continuing to deny that a crisis is pending will not make it go away. Facts, as Aldous Huxley said, simply do not cease to exist because they are ignored.

Bermuda could do worse than to retrieve the Spending & Government Efficiency (Sage) commission’s recommendations from the unmarked grave where they were quickly consigned when it was clear a political backlash was brewing in the public sector.

Every practising politician interested in re-election is, of course, concerned with the possibility of alienating votes — particularly such a key bloc of votes as the Civil Service. And every civil servant is naturally concerned with keeping his or her job.

But the magnitude of the crisis we are facing demands courage and selflessness on the part of our politicians, realism and pragmatism on the part of our public sector unions and a degree of trust, cooperation and flexibility on both of their parts which Bermuda has not experienced in recent years.

Bermuda can be an island of “unlimited impossibilities” again — but the first impossible thing we must achieve, as a matter of urgency, is the building of confidence between Government and the white-collar unions.