Richards: We need foreign capital
Finance Minister Bob Richards has reiterated his case for the need to draw investment into Bermuda, responding to a suggestion by economist Craig Simmons that the strategy was skewed and over-reliant on overseas capital.
In The Royal Gazette yesterday, Mr Simmons called on the Bermuda Government to direct more of its efforts into stimulating local investment spending.
“We have to work on getting foreign exchange in here,” Mr Richards said. “Small businesses do not earn foreign exchange. Some do, but most don't.”
Mr Richards has said more than $900 million should come into the Island's flagging economy as a result of major works such as hotel construction, projects linked to the 2017 America's Cup, and a proposal to redevelop the terminal at LF Wade International Airport.
The minister has repeatedly made the case that the Island's cash originates abroad, whether from visitors or through investment.
Yesterday, Mr Richards made the additional case for incoming investment countering the loss of jobs caused by consolidations.
“We need to have this incoming foreign capital in the projects I have mentioned because of the consolidation going on in international business, and reinsurance in particular,” he said. “It's totally outside of our control. It's not threatening our industry but it is shedding jobs, and to counteract that we have had to put programmes in place — our plans for projects, big ones and small ones, and those that are in between.”
Mr Richards said he believed there was “capital out there that would like to invest in Bermuda — but we have to find something for that capital to do”.
“We are talking about putting foreign capital to work in Bermuda,” he said. “By putting it to work, we put people to work. We have to do what we can to create activity in Bermuda so that Bermudians can go back to work.
“I'm not trying to suggest that the same people who work in international business would work on a construction site, but with more investment in Bermuda, there are all sorts of spin-offs. We will continue to look for foreign investment — all money in Bermuda is foreign-sourced and we need to have more of it here.”
The reluctance of local banks to give loans has been lamented by many business owners, but Mr Richards said he saw light at the end of the tunnel.
“Here in the Ministry of Finance, we have been working hard on trying to get the banks to be more accommodating, and that work continues — it's a slog, but I believe we are getting somewhere, in so far as banks being more interested in lending money,” he said.
The turnaround might not yet be evident in economic figures, the minister added, but the Island was “turning the corner in terms of banks lessening their tight grip on lending”.
“That will really help local businesses — their biggest problem is that they can't get financial help. I see a glimmer of hope, but it's not yet obvious in national statistics.”
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