Finance Minister Richards dismisses poll
Finance Minister Bob Richards insisted opinion polls “cannot change the economic reality” as he reacted to a survey showing more than half the Island opposes boosting population.
His remarks came as business research head Don Mills told The Royal Gazette that “more voices need to join the conversation” to allay fears of foreign workers taking jobs, which he said were far from unique to Bermuda.
Meanwhile, Opposition Member of Parliament Walton Brown said the Island’s need for foreign capital did not equate to a need to increase the residential population (see page 2). Each was responding to a poll commissioned by this newspaper, which showed 54 per cent of residents disagree with jump-starting the economy by upping the number of residents. Mr Richards replied that, in an ideal world, strong economic growth would come with keeping the number of residents constant, adding: “But we’ve never had such a world. Not in the golden age of tourism, nor the go-go days of international business.
“Statistics clearly show that economic growth in Bermuda has been accompanied by increasing numbers of people either living in Bermuda and/or visiting our shores. Opinion polls cannot change the economic reality that the link between the number of people spending money on our shores and the strength of the economy is virtually unbreakable.”
Mr Mills, chief executive officer of Corporate Research Associates in Canada, which produces regular business confidence index reports on Bermuda, said: “The reason why the results are the way they are, and Bermuda is not the only place that would have this challenge, is that most people do not understand that a stagnant population, or a declining population in Bermuda’s case, is actually very bad for everybody.
“There has not been a big enough conversation about the consequences of ten per cent moving off the Island in the last five years and the result of that.”
When it comes to an influx of foreigners, he said, many were “afraid that those people will make jobs even more scarce”.
However, with population decline, he said: “There is no single part of the economy that hasn’t been negatively impacted.”
He continued: “Somebody has to make the case that we need the investment to create jobs that were never there.
“The conversation has started with some important voices like Sir John Swan, but it needs more voices and it can’t just be the Government. Right now the information is not out there.”
Mr Mills said it was crucial for senior figures in the business community to make their case.
Even if the case for economic immigration has proven highly unpopular, Mr Mills said business people should take up the cause.
“It’s not just having expatriates working for international business. Economic immigration would mean that people would have citizen status by making an investment. The example I use is if Bermuda could find 100 very wealthy individuals who were prepared to make a minimum investment of $5 million into the economy to set up businesses and create jobs for Bermudians.”
Mr Mills suggested such measures could be directed into new businesses, such as the IT sector, which could give “a third leg on the stool” for the Island’s economy.
“There needs to be a discussion,” he said, adding: “It’s going to take a while.”
In his response to our Global Research poll, Mr Richards said Bermuda was suffering a loss of confidence, coinciding with international market turmoil, which have led to large-scale losses of private sector jobs, including thousands leaving Bermuda.
He maintained that Bermuda Government measures had stabilised the economy, and that “solid evidence of growth” was emerging.
The Island’s debt crisis persisted, Mr Richards said, and annual budget overruns would have to be dealt with before any inroads could be made into reducing debt. Calls to reduce spending were “naive at best”, while harsh austerity measures would result in untenable mass public sector layoffs.
Mr Richards characterised the Government’s tactic as “a glide path of deficit reduction”, with cost cuts concurrent with revenue increases that would be principally derived from growth.
“We are today faced with trying to put as many Bermudians back to work as quickly as possible. In Bermuda, all money is ultimately from abroad. The Government has been hard at work creating the appropriate environment that will attract overseas investment. There are clear signs that this is working.
“Money is coming into the Island for several building projects, including several hotels and a new airport terminal. Other sources of investment are also coming to the fore.
“Foreign investment in our economy comes with more commercial activity, more opportunity and more jobs for Bermudians and more government revenue. We want to put Bermudians back to work but typically, overseas workers will be required to fill the gaps not filled by Bermudians. This is the nature of our service economy. We will always need foreign exchange and foreign-born citizens who contribute to our community, and who bring and spend that money in our economy.
“This is what worked for us in the many years of prosperity, and if given a chance, will work for us again.”
The argument equating economic growth with population growth is “patently false”, according to Walton Brown, the Shadow Minister of Immigration and External Affairs.
Mr Brown, right, was responding to a survey by The Royal Gazette showing 54 per cent of Bermuda residents are against the idea of boosting numbers as a means of reviving the economy. He said he had not seen a single economic growth model predicated upon population increases.
“We need investment,” Mr Brown said. “We need more money coming into this country. We need the growth of international business and the revitalising of tourism. It may well be that certain models lead to an increased population, but that's in consequence to the growth.
“Some people have it backward and I wonder if other motivations are in play.”
Technology-driven increases in revenue would have “almost no positive impact” on employment, the Progressive Labour Party MP warned.
“New businesses coming in are so tech-focused that you don't need as many people. Look at HSBC. When they took over the Bank of Bermuda there were 1,700 people employed. Now they have about 700. We lost 1,000 jobs and it wasn't because of term limits. The smaller number represents greater efficiency for HSBC.”
He suggested many calls for population growth were motivated by a desire for an inflated property market.
“We need people investing and we need tourists coming to Bermuda. That's what we need to focus on, not just numbers.”
Mr Brown said that when thousands of unemployed Bermudians saw a drive to bring more people in, “that simply tells them the Government does not have its focus on their opportunities”.
“That explains the high level of sensitivity around a Government that says we need more people for economic growth,” he added. “It is a nonsensical argument.”