Election 2020: ‘control virus to rebuild economy’
Victory in the battle against Covid-19 is vital if the already battered economy is to recover from the pandemic's financial impact, an economist said yesterday.
Craig Simmons, a senior economics lecturer at Bermuda College, added that control of the coronavirus should be an essential part of the economic recovery plan — no matter which party takes power after the General Election on October 1.
Mr Simmons said: “First and foremost, contain the virus by any means necessary — recovery isn't possible without it.
“Second, support entrepreneurs in their quest for financing to meet the demands of a digital economy. Third, retooling workers with the skills needed in a digital economy is imperative.”
Mr Simmons added that a traditional pillar of the Bermudian business world may also have a crucial role to play in the island's recovery. He said: “Perhaps our best recovery bet lies with the reinsurance sector.
“The pandemic could provide a spark like that created by the September 11, 2001 attacks or hurricanes Katrina, Rita and Wilma of 2005.
“The sector experienced double-digit growth following these catastrophes and the knock-on effect led to economic growth in excess of 3 per cent, a feat not seen since 2007.”
However, Mr Simmons warned: “If there were a wave of new incorporations, technological developments within the industry would unlikely generate jobs in the way they did in the past.”
Mr Simmons said, however, there was “reason for optimism” despite the pandemic's economic storm.
He added: “There are a number of local-based sectors that could recover quickly from the pandemic.
“These include construction and retail in consumer durables — appliances, electronics, furniture — and non-durables.
“To date, retail sales for grocery stores have been impervious to the pandemic, but this has been at the expense of reduced spending and job losses at restaurants and bars and the wholesale businesses that supply them.
“And, given that many construction projects are capital intensive, it may be relatively easier for them to maintain physical-distancing guidelines without compromising productivity.
“The quick recovery of construction firms and grocery stores, however, will not be enough to make up for job losses in in-person services.”
Mr Simmons warned there were “serious challenges” ahead.
He said: “A $3 billion debt will limit the Government's ability to provide further social protection for blue-collar, in-person service workers.
“An ageing population will make it difficult to maintain the standard of living to which we have become accustomed without more young bodies.
“And, in a world of highly communicable disease, we need to rethink access to healthcare.”
But Mr Simmons said the island's “economic fundamentals remain strong”.
He added: “Low inflation should lead to, at worst, moderate public-sector pay increases.
“A strong net export position ensures that we can buy the goods and services we need and save significant amounts of foreign currency for rainy days like these.
“When all is said and done, I can't think of another place I'd rather be in right now.”