Swan: ignore immigration need at our peril
Sir John Swan says Bermuda has an urgent economic need to bring in more people from overseas and failure to lower immigration barriers in a carefully planned way will limit opportunities for the next generation.
The former Premier was among an audience of prominent business people yesterday at HSBC's Harbourview building for a presentation of a business confidence survey.
During the question-and-answer period, Sir John said that Bermuda had no raw materials or manufacturing to speak of and was a services-dominated, “people-on-people” economy.
“The only way we are going to grow is to get people in,” Sir John said.
He said immigration reforms had to go further to meet this need, because Bermuda's demographics pointed to an ageing and shrinking population, which would inevitably reduce demand for the service-providing businesses that drive the economy.
“We have kept Bermuda closed to Bermudians and we can't keep fighting this battle in the 21st century,” Sir John said. “We need to open up.”
After the meeting Sir John suggested that Bermuda needed to survey its own human resources and work out how many people the island needed to bring in and with what skill sets, in order to achieve economic growth.
“On that basis, we could make a very clear plan for bringing people in and employing locals,” Sir John said.
Attracting the targeted immigrant types, with their skills and capital, would help to create new businesses and increase demand for existing ones, Sir John said, thereby increasing employment opportunities for Bermudians.
“We ignore this issue at our own peril,” he added. “If we say we can't do anything because it might offend some Bermudians, then our children will not have the type of employment opportunities they need.”
Sir John said the survey, which indicated growing confidence among business leaders, tempered with caution, provided useful information.
“It begs the question: where do we go from here?” he said. “There are political decisions and emotional decisions that will have to made if we are to get out of the mess we're in.”
Mark Watkinson, chief executive officer of HSBC Bermuda, sponsor of the survey, welcomed Sir John's comments and said the survey could be used as a starting point for discussion and that consideration would be given to having a panel discussion immediately after the release of the results in future.
The survey, conducted by Bermudian firm Total Research Associates (TRA) in conjunction with Canadian market research firm Corporate Research Associates, found an uptick in confidence among business leaders.
The results suggest businesses will be more likley to hire extra people and invest in their businesses this year.
But caution over the future remains, with particular concerns about the political environment and the need for business growth and investment from overseas.
A total of 105 prominent business people from a broad swathe of the economy responded between November 20 and December 5 last year. Nearly 400 were invited to participate and the response rate was 26.5 per cent.
The Business Confidence Index, based on a benchmark of 100 from the 2014 results, rose to 106.5, up one point from the last survey in June last year.
TRA said improving business confidence coincided with consumer confidence hitting an eight-year high in December, as measured by the research form's long-running Omnibus survey.
The results were unveiled in a presentation by Margaret Chapman, of CRA, at HSBC's Harbourview Building yesterday.
The improving economy was a source of optimism, with 79 per cent believing the economy is now moving in the right direction, up from 70 per cent last June and 49 per cent in 2014.
About half had experienced improved economic conditions in the past year, while most of the rest said conditions were about the same.
The signs for increased business investment, a key confidence indicator and growth driver, are promising. Of the respondents, 42 per cent said they planned to raise their capital expenditure this year, while 54 per cent said it would remain unchanged and just 4 per cent said it would decrease.
A trend of improving revenue for companies is also becoming evident in the survey data. A total of 38 per cent of respondents said their revenue had increased over the past year, up from 33 per cent and 24 per cent respectively in the past two surveys.
Meanwhile 33 per cent said their revenue was flat, while 29 per cent said it had fallen.
On staffing levels, 28 per cent said they had increased headcount last year, while 56 per cent said it remained unchanged.
An element of caution is also apparent in that 31 per cent said they had left positions vacant, while 18 per cent have made people redundant over the past year.
The top three challenges cited by business leaders were the high cost of doing business in Bermuda (39 per cent), government leadership and politics (37 per cent) and the lack of business growth and foreign investment (25 per cent).
The survey organisers said the findings appeared to show that the economy may have bottomed in 2014.
“Nonetheless, confidence in the economic future of Bermuda continues to be somewhat muted and cautious,” Total Research Associates noted in a statement.
“That said, in assessing their own businesses, more leaders report growth than declines in revenue, and capital expenditures are expected to increase in the private sector over the next 12 months.
“Organisations also expect to increase their staffing in the coming year, with the majority of new hires expected to be local rather than from overseas.”
Of those intending to increase their staff, 82 per cent said they would be looking to hire locally and 18 per cent from overseas.
The survey also reveals suggestions for how the business climate could be improved in Bermuda, with political stability, along with increased foreign investment being key, as well as other factors such as improving immigration and the work permit process, better taxes, and improved education and training for Bermudians.