We need some fresh perspective to deal with this crisis – The Royal Gazette | Bermuda News, Business, Sports, Events, & Community

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We need some fresh perspective to deal with this crisis

It would be nice if we could see life beyond politics, in particular beyond personalised politics. If we could for just a minute look at things from a sociological perspective, or even historical rather than as a PLP, UBP, or OBA perspective it may be healthier. This Covid dilemma has no party allegiance, it is a global crisis hitting all people and all nations.

Naturally each society, based on the nature of their economy, are affected differently, therefore how they respond and the overall impact, will vary. For countries like Bermuda that are heavily dependent on tourism and the travel industry, there is a disproportionate impact on their economies. Producing countries and those countries already engaged in deep infrastructural development are still cranking along and recovery is already on the way because that is where large numbers of their employment exist. Governments in those jurisdictions are humming along and resilient, and with modest taxation, will be sustained and looking cheerfully towards the future.

Speaking humanly, what happens when empires are threatened by existential matters which has pushed them to a point that is unsustainable? Historically, wars have proven to be good test grounds for understanding how society responds to that type of stress. War drains the country of its resources, such as this current case of the Covid-19. The social response is felt often as an after-effect when governments try to extract tax to replenish their purse.

The French Revolution was not just a strive for freedom or move for democratisation, it was caused by resentment towards an aristocracy that were living beyond the means of the working class and extracting more and more tax to compensate for war. The American Revolution was provoked by the same phenomenon; we heard the term then: taxation without representation. However, the on-the-ground reality was that taxation and sacrifice were necessary, given the price of war. The problem was, who could see the benefit of sacrifice when the generals and the army folk are well fed, the governors' mansions well kept and the wine on their tables kept flowing, while the struggling poor were asked to make greater sacrifice?

Social and economic maladjustment has been the recipe for social and economic revolution historically worldwide. Bermuda is not another world, it is a country of human beings like all others and subject to the same tendencies, thus results are predictably in favour of universal trends. We may try to put our flavour on matters, but at the end of the day one can put chocolate or strawberry dip on ice cream, but they will both similarly melt in the sun.

We have, as is the case everywhere in the world, a private and public sector to our economy. There is a mutual existence between the two, however, a government is dependent on the private sector to earn its ability to exist. The private sector could exist without a government, but the reverse is not true. When the economy is threatened and the private sector is hit hard, it is a testy situation when the majority of the working population such as our case, are forced to bear the brunt of the existential threat (the war) while the emperor (public sector generals and army) continue on the backs of those already suffering. This Covid financial dilemma is not a PLP or OBA issue, it is a classic and standard proposition that has been played out countless times in human history.

The current malaise with the Bermuda Hotel Association is only the tip of the iceberg because their predicament is not too different from almost every hospitality and retail business. The logical question is, except for the fact the hotels are larger, why should they receive priority? Small businesses are the salt of the earth, they employ more persons when taken universally. If small businesses of necessity don't pay taxes or cannot pay, the government's ability becomes totally crippled. This is as inevitable as the nose on our faces. Bermuda and many similar jurisdictions are staring this in the face.

We do have good corporate citizens that will pay, and we assume everyone is a good corporate citizen, but it comes down to having the means. Companies like Belco will maintain its tax commitments because it is an essential business and the country cannot survive without electricity. Restaurants and retail, and even construction businesses are non-essential. In order for the country as a cohesive private and public sector metropolis to continue soberly, requires a new collaboration. This situation is not a business as usual matter that can be thrashed out over a table and agreed to for a couple of years. This is a “no money coming in” how does the business pay its rents or pay the staff or purchase goods, let alone how does it pay tax and health benefits or business insurance. What do you negotiate with no money coming in?

These are times when theories crash, postures are broken, and reality begins to break through. Leadership is tested, talent is realised and at the end we have some newer perspectives — and if we are fortunate we can advance all our systems and relationships with formats that can carry us forward for the next century.

Powerful boost: companies like Belco will maintain its tax commitments as it is an essential business on the island

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Published May 22, 2020 at 9:00 am (Updated May 22, 2020 at 9:29 am)

We need some fresh perspective to deal with this crisis

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