We have overspent and under-saved. The base of our income has been eroded by our attitudes, policies and the changes taking place in the global economies.

And we continue to remain in economic depression as indicated by the contraction of Bermuda’s Gross Domestic Product by a full 15 percent over the last six years.

Clearly we will need a greater method of economic enhancement in order to,

1) Stop the continued decline.

2) Start the restoration of positive economic recovery.

3) Adjust for the requirements to restore our economic viability, both as it relates to the Public and Private Sectors.

First, we must recognise the overall state of our affairs. If we do not recognise that global change will be a major contributing factor to our problems then we will not be able to rationally seek solutions to our problems.

Never before in any one decade except during world wars has there been so much financial stress being put on developed economies as there is today. There is an abundance of capital but demand for its use is limited on the basis of what would you use it for that will give it a safe return on the borrowed capital.

We are moving at a very fast rate from the industrial excess raw material revolution to the technological virtual robotic revolution. Instead of moving fast among physical components and people, we are moving information and the new and growing resources of technology with efficient innovation, modulation and miniaturisation that will provide us with our needs in a far more efficient manner.

The energy input, which enhances our capacity to perform is expanding at an exponential rate, thus increasing our capacity to do more with less, providing we have the means to have the physical attributes and the education, intellectual entrepreneurship to embrace these changes that are going viral on a global scale.

It is, therefore, incumbent upon us to grasp these realities, very much like our fore-parents did at the beginning of the industrial revolution.

Where does this leave Bermuda? We cannot make it in the future with the past components that might have served us well and which made us a relevant component of the world as it was.

Some of the components that we must overcome are:

1) Restoring pensions so that resource is available to people who have made their contributions. At the moment, both private & public sector pensions are underfunded.

2) Restore capital value rents on residential and commercial properties by creating the economic activity that bring in people who will assist us in enhancing our economic activity and their presence occupying rental space and contributing to our overall economic activity, which will create jobs and improve employers enterprises so that they, too, can add to the economic growth of our economy.

Without growth in the form of the presence of people, our economies to sale become unbalanced, therefore, as is the case now, there are more Bermudians retiring than being born. This is an unsustainable state of affairs which will cause health costs to rise.

Pensions

Grossly underfunded with less people contributing because of falling birth rate and considerable reduction in non-Bermudian workforce contributions.

Rents

Offices, houses, apartments — partly or fully empty causing a reduction in rents and as a result the value of properties are being reduced.

Mortgage

Interest payments: Many in default and many repayments in default as a result of reduced rents, no rents or loss of jobs.

Employers & Employees

Employers’ volume of business have decreased, therefore, the demand for staff is decreasing and there is considerable competition from technology assisted buying directly from abroad.

Jobs

Workforce lost approximately three thousand Bermudians and six thousand non-Bermudians since 2008.

Healthcare

Cost continues to accelerate. Salaries and wages remain static. Less and less contributions from shrinking birth rate of people entering the workforce and young non-Bermudian presence as we try to accommodate an increasing ageing population who are living longer. Without growth, this is unsustainable.

Education

Education cost is rising while the intake from a shrinking birth rate should provide us with the ability to deliver an educational opportunity at less cost. Of all social institutions, none is more important than education in driving economic and social mobility.

Charities

Charitable giving is shrinking as a result of shrinking income from rents, dividends and reduced population and Bermudians out of work. There is less when the demand is for more.

Public & Private Sector Maintenance

This requires economic conditions where there is sufficient utilisation and activity to justify the maintenance expenditure. A condition which is on the decline and manifesting itself by the condition of Private & Public properties and facilities.

Depleted Savings

Reduced economic activity resulting in the need to meet commitments that used to be met by various incomes from rents and dividends that previously allowed savings to accumulate that are now being depleted.

Loan Position

Payments being deferred or defaulted; credit cards being maxed out without the income to reduce the credit allowance.

Public Utility & Grocery Costs

Continuously increasing when wages remain static and other necessities such as food, fuel and healthcare costs are consistently rising.

Wages & Salaries

Wages and salaries remain static and in some instances decreasing. Added to this we have dividends considerably decreased and rents decreased, which are the main sources of unearned income. Since all of these are in a negative position, any one of these will considerably reduce one’s ability to meet their obligations, i.e., repayment of interest thus the economy continues to contract.

The Public & Private Corporate Sector and/or individuals are faced with the same conditions — a reduction in foreign exchange, our credit worthiness is at risk and our ability to pay our way is difficult and in many cases impossible. Thus we do not have the capacity to meet our needs.

The challenge is change. If we do not do it together we will be an island with an ageing, unproductive, insecure society talking about what we were yesterday.