Belt-tightening will be a feature of our future
It is important to give the public some background to the factors that drive our costs of goods. Bermuda has two supply ships: one ship comes out of Florida and the other ship comes out of New Jersey. That means all of the goods that supply our island come out of the United States or must transit through the US.
As the price for fuel for ships goes up globally, that cost has a negative impact on shipping prices. Further, the Bermuda dollar is pegged 1:1 with the US dollar, which means the economic forces that impact the value of that currency impact the value of our currency as well.
As all of our goods come from the US and because our dollar is on level pegging with their dollar, it means we are affected whenever there is inflation in the US.
So, goods — from fruits to bread to furniture to building supplies — all become more expensive here in Bermuda.
One of the roots of these problems is the global supply-chain challenges that impact getting the supplies to the ships that supply our island. When the US gets a cold, we catch it, too.
In his speech to the Progressive Labour Party Delegates Conference last week, the Premier noted the following:
“In order to overcome the economic pain and anxiety brought on by this pandemic and to bring about positive, transformational change in our country it will require difficult choices. It will require a change in how we do things, hard work to execute that change, and it will require everyone to get involved in making the necessary changes a reality. Sharing ideas, and being involved in the discussions and work of executing those ideas is the only way for us to create the change that we desire and the Bermuda that we wish to live in.”
Indeed, the next few years are going to be tough. The recovery from the pandemic, which harmed our fiscal house, is not going to be easy. It is going to be doubly difficult when inflation is thrown into the mix.
The next few years we are going to have to tighten our belts. It means that we must no longer engage in reckless deals such as the airport and Morgan’s Point that cost us hundreds of millions of dollars. It also means that we must not give away status, but, instead, provide non-status opportunities for non-Bermudians who choose to invest here and spend money here.
As importantly, it means we must cultivate and support our existing sectors and do whatever it takes to grow new sectors, including promoting the opportunities in North East Hamilton and through fintech.
We have a plan to grow Bermuda out of this crisis. But it is not going to happen overnight. We must all do our part, tighten our belts and together we will make it through these tough times.
• Crystal Caesar is a government backbencher and the MP for Southampton West Central (Constituency 31)