In a year-end interview with The Royal Gazette, Finance Minister Eugene Cox (pictured right) spoke of economic challenges and triumphs in the year past, and what he sees on the economic front for the coming year.

What have been the economic/finance highlights, and challenges for 2001?

The tragic event that occurred on September 11 ultimately threw up highlights in our activities, certainly in Government. I say that because we had a very devastated, tragic situation to address, and the way the Government pulled together, in terms of meeting the demands of the difficult situation we were in, with planes being diverted to Bermuda because they were not allowed to land in the United States, was commendable.

We were able to accommodate, at one point, nine different airlines, and through the hotel association able to organise accommodation and transportation. We took decisions at that time, and the coming together, in a difficult situation, was phenomenal. And certainly for the year the way Government was able to address the difficult situation made me proud to be part of Government. These are the kind of highlights I would refer to.

And it does not end there. It involved talking to all of the fragments of the economic community to make sure we had supplies onboard, and we took stock on where we were. This took a good bit of time before I could come out with a statement to the public saying things were well under control.

Another highlight, for the year, was our revenue streams and expenditure. Up until that time, we were in a situation where we were looking quite good: revenues were exceeding budget forecasts. And things looked rosy before that tragic day. So that is the kind of event that is high on my calendar for the year, as we pulled together collectively.

And there were other things. For instance, in respect to accounts receivables, which have not been coming in as regularly as we would have liked. This has been an ongoing problem, but we have been adjusting; correcting that. And the Public Investment Fund, we were reorganising that which put us in a position where, when the stock exchange crashed, as we had not been quick to put all our monies out, we benefited from having an amount of cash on hand, which did not in any way diminish.

And we have also been looking at our department to see how we can best complement and to make the best decisions and work more efficiently. These are the kinds of things we are doing, and there is more to come.

The challenges have been there, but they brought out the good, the resilience and togetherness that we all should be very proud of.

As a whole, Bermuda is very blessed, and all of us should be on our knees daily thanking God for keeping it this way. Although we have had these tragic events, we have been climbing out of them steadily. We seem to be holding our own - economically - and we can, with a little luck or blessedness, we should continue to meet our demands.

In the economic sphere, we have been reasonably successful. And when you look at all the things that needed to be corrected, and I am not saying this to be pointing the finger at anyone, but we were able to get the Consolidated Fund presented to the Auditor General in August, 2001. This was the first time this had been presented in that time, instead of years behind. And not only coming in on time, but getting a clean auditors report was most favourable.

Given the current economic climate, what measures have or may be taken to cut Government spending?

It has been suggested that we should clamp down on spending. But, when I think of the economic role that Government plays, spending is one of those areas that you can work towards keeping people employed, and it is one way of expanding the economy and create work. The other area where expenditure occurs is in investments.

And lets look at taxes, whether we extract more taxes if we want to slow the economy down, or if we give relief to those persons who would otherwise be paying taxes, to help promote jobs and keep the economy functioning.

And people are encouraged to save, this is great when they spend that money as consumers. But, if the climate is where consumers don't feel comfortable to spend as could happen, and has happened.

So when people say is Government curbing expenditure that has to be qualified, you don't just shut off expenditure. If you are building new schools or projects you need to expend and build these facilities, that is necessary and must go forward. But, you look at areas that you can do without. They may be nice to do, but you don't have to do them now at this time.

Certainly, we will minimise taking on additional staff, and capital acquisitions such as furniture and other things. In fact, one of the things that I did, was I was looking at reorganising my office and putting in new office furniture, but I have been functioning for the last three years with what I have. So, although I would like a change to make the office more suitable and functional, but things like that are obviously deferred as we don't know what is going to happen next year.

Looking forward, what would you say on the economic front as we move in to 2002?

There has been talk from day one that America will suffer probably in the first two quarters of 2002, but indications that things may approach normalcy from the middle of the year. But, it may be third or fourth quarter of next year before we (Bermuda) benefit.

Obviously, we have to prepare for the future, and try and hold on as much as we can to monies that we have to provide for hardships - as we have been doing already - and where possible in the revenue streams, one can try and give relief in the taxes that we normally collect, as we did with certain businesses.

We will continue to minimise expenses that are not necessary, and one would argue to the core that should be done, but we also want to do what will keep our people employed, and we want the system to continue to function, we have to spend some money to do that. That in my view, is good economic policy.

I hope you appreciate what I am saying, because too often when you say to people let's not panic, lets get the facts so that we can make an intelligent decision. Some people think of that as being callous, it's not callous and indifferent, it is that we want to make intelligent decisions. In order to do this we have to have the facts and figures and that is where I am, and I hope it is understood that there are times that Government will spend money to keep things functioning, and to keep people who otherwise might not have jobs, employed.

Ultimately, depending on how things develop there may be a need to defer some projects. But, we will make decisions after we get the best information that is available.