Log In

Reset Password

Recovery Plan

Shadow Finance Minister E.T. Bob Richards arrives at the House of Assembly with the 2011/2012 reply to the budget.

We live in a world in which attention deficit disorder is not a syndrome limited to a few children, but is something that affects our whole society.The sound bite and the catch-phrase have replaced real analysis and debate. If it can’t be said in a text message, or a tweet, it’s not worth saying or listening to, apparently.That’s too bad, because there is no substitute for detailed analysis. Shadow Finance Minister ET (Bob) Richards demonstrated that in his Reply to the Budget on Friday. It’s a long document, but it needed to be, because without a clear and detailed understanding of how the Bermuda economy got into the current mess it’s in, there will be no way out.Still, Mr Richards, did come up with this apt equation: Too much red tape plus not enough red carpet equals more red ink. And the reverse of the equation is equally apt. Less red tape plus more red carpet equals less red ink, or none at all.That’s because Bermuda’s problems are not unconquerable if a cogent plan is in place. Red tape, while a problem in its own right, speaks to Bermuda’s general lack of competitiveness. More red carpet means creating an environment in which Bermuda can rebuild its two core industries by creating an atmosphere in which they can thrive.And doing that will mean more jobs, more foreign exchange earnings and a better lifestyle for all. Not taking action will lead to more recession, more job losses and more misery.Mr Richards quoted Warren Buffett’s famous aphorism that it was when the tide goes out that you see who’s naked to illustrate the point that Bermuda’s structural deficiencies as an economy have been laid bare by this recession.But identifying the problem is not the same as solving it, and the solutions are not all easy. But give Mr Richards and the Opposition credit for at least proposing solutions, when solutions rather than catch-phrases were conspicuously absent in the Government’s Budget Statement a week earlier.Mr Richards outlined some of the ways in which the economy could be turned around, and many have merit. But genuine reform of Bermuda’s economy will not be easy. Many policies that have been articles of faith for decades will have to re-examined and set aside.These include Bermuda’s work permit regime. It may seem contradictory to argue for a relaxation of work permit rules at a time when Bermudians are losing jobs, but if a non-Bermudian comes to Bermuda and as a result of his or her work, creates jobs for Bermudians, both directly and indirectly, then isn’t it worth it? And if that person wants some guarantees in terms of being able to remain in Bermuda for more than six years, then the time has come to look at that for people who are job and wealth creators. After all, a policy for which exceptions are made seven out of ten times isn’t really working.Similarly, it may be time to look at the 60:40 ownership rule again. This is a policy that has served Bermuda well, but is now being made an exception in many sectors.Government policy is only part of the problem. Bermuda needs a renewed work ethic and a renewed commitment to productivity if the Island and the economy are to come out of the recession in a stronger position. That may require some changes in workplace and employment rules. Disputes of the kind seen with the Public Transportation Board and now at Renaissance Aviation will become increasingly common as the economy worsens.There is much more in Mr Richards’ speech that is worth commenting on if space allowed. But it is better to read it for a cogent analysis of how Bermuda got into the mess it is in, and to see a plan sadly lacking from the Government for how to get out of it.