There was more gloom in the March Retail Sales figures released on Friday, which showed that sales had dropped 8.6 percent after taking account of inflation compared to March last year.While the plunge in car sales and a rise in motorbike sales suggested people are becoming more prudent in their big ticket purchasing, the most telling figure may have been the fact that food sales fell by 3.89 percent, their sharpest decline since August.This is particularly telling because food store sales have been mixed in the last year when almost all other retail sectors have seen declines. And food prices, which have been going up fairly steadily, have tended to mask sales declines.So when food sales drop for the third consecutive month, that is a clear indication of the Island’s general economic weakness.The only silver lining in the otherwise gloomy figures was the rise in tourist-related goods, which were reported to have risen by 50 percent as a result of high spending. However, care needs to be taken with those figures because March is not a major month for tourism, so a 50 percent increase may not be that significant in dollar terms, which were not released.There still seems to be no real plan for reviving the economy and this is reflected in the spending figures, which above all demonstrate a lack of confidence in the future. Confidence leads to spending on major purchases like cars, household equipment and home improvements. But people do not make those investments when they are nervous about their jobs and investments. This is the inherent problem with a recession. Recovery, especially in a consumer-driven economy like Bermuda’s, requires that people spend money. But individuals will not spend money when they lack confidence in the future. This then reinforces the spiral: Individuals who are nervous about the future cut their spending, which makes the economy worse, which makes people nervous about the future. It is only when people start to see a change, such as an uptick in tourism or international business, or when companies stop firing and start hiring, that confidence returns, at which time a recovery can begin and build on itself quite quickly.That change does indeed depend on some international factors, such as improvement in the US economy or a change in the international business climate. But it can also be led from Bermuda. This could mean adding new legs to the Bermuda economy, genuinely business friendly policies such as further reductions in payroll tax, Customs duty and, yes, the vexed question of work permit term limits.To that end, Government announced that businesses in the Economic Empowerment Zone (which already get some of the above mentioned benefits) will be giving discounts to Government employees. It is not entirely clear if they are doing this off their own backs or if they are receiving some form of Government support. But anything that helps to generate business activity is welcome, although discounting for its own sake is a dangerous game for any other retailer, since the margin between the landed cost of the goods (including shipping and duty) and the price on the shelf is what pays staff, rent, utilities, marketing costs and the myriad other business costs in Bermuda. If this is simply a means of mollifying Government workers as opposed to a genuine effort to improve the economy, then it will fail. And it falls well short of the kind of structural reforms that the Bermuda economy needs if it is to become competitive again.May 24 RaceIt’s Bermuda Day again tomorrow, and this year’s row over whether non-residents should be allowed to run in the Marathon Derby raises interesting questions over identity in Bermuda and the merits of having one race where residents can compete against one another. Curiously this is not a debate over whether there should be a Bermudian-only race which would cause another argument.A great many people have come out in favour of keeping the race residents-only, but the argument in favour of allowing tourists to come to the Island to race is also compelling. It’s a great race, held at a beautiful time of year, and it would encourage more tourists to visit at a time that often coincides with the Memorial Day weekend in the US.Bermuda is in the grip of the worst recession in living memory, and we should be doing everything reasonably possible to encourage tourism. On that basis, visitors should be allowed to run. After all, in order to run, you have to eat, and to eat, you need a strong economy in order to buy food.