A FORMER Chamber of Commerce president and business leader has urged the Government to start injecting cash into the economy immediately if the island is to stave off financial ruin.

Peter Everson, consultant and former CEO of investment management company Schroders Bermuda, was one of a panel of business leaders who addressed Bermuda's economy at a public meeting this week.

Mr. Everson has shared his views on the island's financial situation with the Mid-Ocean News, warning the Government to cut all discretionary spending immediately.

"For the Government to recognise the challenges we face is step one," Mr. Everson said.

"Immediate cash injections into the economy in November and December 2008 are essential."

Mr. Everson expanded on two examples he gave at the public meeting, where he shared the stage with ex-Premier Sir John Swan, Senator Calvin Smith and economist Craig Simmons. He urged Government to cut import duty on the fuel that Belco uses, allowing Belco to eliminate the fuel surcharge on all December 2008 bills and reduce fuel surcharge for January 2009.

He also recommended that the Government give members of the island's Police Service all the back pay they are owed in November. Forty per cent was paid in October, with 30 per cent due to be paid in February 2009 and 30 per cent after April 2009.

"These measures would inject around $30 million into the economy, which is around 0.5 per cent of the gross domestic product," Mr. Everson explained.

"Fund these by cutting discretionary spending. Eliminate the use of Blackberries by all but the most senior civil servants, and insist that they are switched off during all meetings. This may seem obvious but unfortunately requires being stated. This is part of why the Government is so slow to get anything done."

Mr. Everson added that the Government can eliminate non-essential spending by reigning in trips and scrapping credit cards for Ministers.

"Scrap the 'per diem' allowance for overseas trips, or scrap all Government credit cards and retain the 'per diem'," he said.

"These are 'day one' measures. On 'day two', Government must engage in an open dialogue with the unions, banks, Bermuda Monetary Authority and businesses to map out a task list and the way forward. This is too big a problem to be ignored or swept under the carpet, and it cannot be tackled by any one group in isolation."

Mr. Everson believes Finance Minister Paula Cox's recent comment to the Royal Gazette that Bermuda is not "technically in a recession" to be correct. He warns that Bermuda will, however, not be 'officially' in a recession for another year, when it will be too late to act.

"The Minister is correct; the definition of a recession is a period of six months in which the economy gets smaller every three months," he said.

"However, what that tells you is that the economists will only tell you that you are in a recession six months after it started ¿ plus the time it takes them to produce their figures which in Bermuda is at least six months.

"Thus 'officially' Bermuda will be informed a recession started at least one year after it started. A question for the man in the street: is this helpful information? No, it is too late. Business people need to know sooner.

"An analogy is the weather forecast. A farmer facing a drought needs to figure out whether to pay for irrigation or if it will rain in the next, say, five days. It is of no help to him if three months later the weather forecasters announce that a drought started six months ago. It is too late to save his crops."

Mr. Everson added that all Bermudians ¿ even those not involved in the business sector ¿ will be able to see the oncoming recession first hand.

"At the meeting this week I said that every person in Bermuda can test this for themselves," he said.

"If they are employed and need more money, then they approach their boss and ask for overtime or the chance to work extra shifts.

"If the boss says 'I would like to help but there are already two people ahead of you and we are likely to cut staff and not work extra shifts', then this indicates that the business is contracting.

"The reverse is also true. In a similar manner, if you have an apartment that you rent out and the tenant gives notice, they may say 'we have some great friends who will make excellent tenants, can you see them first?'

"This indicates firm demand, that is, a growing economy. On the other hand, if they leave and of the first three people that look at the apartment, one says 'no' and the other two both ask for the rent to be reduced, then this indicates that the economy is shrinking. Thus each person can decide on the basis of their own experiences, and it is the consensus view that will be definitive."

He noted that Chamber of Commerce Real Estate division chair and local realtor Buddy Rego recently reported a decline in rents of 30 per cent at the top end of the market. Mid-range rents have declined ten per cent, with the lower end of the market remaining static.

Mr. Everson believes the US recession will have an impact on Bermuda imminently, and predicts the outcome for the island will be "much, much worse" than the crunch of the early 1990s.

"Eighty-five per cent of our trade is with the USA," he said. "They are at the start of their worst economic downturn since 1930. Companies will be forced to cut expenses.

"Conferences in Bermuda will be an easy target to be axed. People have to start saving money again. Cutting a vacation and staying at home or traveling locally is an obvious step. This happened in 1990¿- 1991, and Bermuda felt the pinch.

"This will be much, much worse. The insurance industry is not immune to this recession. Their clients cannot afford to pay so much for insurance and will either buy less or pay less.

"These insurance companies have lost money on their investments and their ability to make a reasonable return next year is questionable.

"Given that outlook, CEOs and CFOs will look to cut overhead expenses, which includes rent, reduction in headcount, or a reduction in marketing, travel and entertaining budgets. These all impact Bermuda, from less visitors to less lunches charged to ACE, XL, and AIG, and fewer corporate credit cards."

Mr. Everson noted that his views are personal, and do not necessarily reflect the views of the Bermuda Chamber of Commerce.