Bermuda is not immune
In a public address to the Island last night, Premier Dr. Ewart Brown warned of hardships ahead as Bermuda's two economic pillars insurance and tourism are not immune to the global downturn.
The Premier said Government, however, was committed to continuing free child care for families making less than $70,000, Bermuda College tuition for students and free public transport for school students.
These announcements come after the Premier met with his Council of Economic Advisors a group of international and local business leaders during the weekend.
This was held at the Fairmont Hamilton Princess his press secretary, Glenn Jones confirmed last night and no Friday evening and during a daylong session of round-table discussions and presentations on Saturday.
Following the weekend meetings, the Premier addressed the Island last night saying that Bermuda's economy will be affected by the global downturn, but he had faith in its sustainability.
"The Bermuda international business sector, cemented in insurance and reinsurance is well-managed and continues to play a vitally important role in the world of risk management," he said.
"Yet some of the companies in our international business sector have had to deal with investment losses from deteriorating financial markets. Some have incurred costs as a result of Hurricane Gustav and Ike.
"Meanwhile the formation of new international business in Bermuda has slowed over the part three months, all but certainly related to the pinch being felt around the globe.
"However, even with that cautious assessment of the insurance sector I'm encouraged by one simple fact: the world needed to buy insurance yesterday and it will need to buy insurance tomorrow."
On the topic of tourism, which he said in August this year was going through a "platinum period", last night the Premier acknowledged that numbers may slip.
While adding that hotel projects continue to progress and only one, which Mr. Jones confirmed last night was the new Southampton Beach Resort, was facing any challenges.
"Our other great pillar Bermuda Tourism will suffer in a global economic downturn, especially since the USis feeling the brunt of that downturn and 85 percent of our visitors are from the USmarket," he said.
"This might mean lower or stagnant visitor arrivals, hotel occupancy rates and retail sales. Matching the statistical performance of prior years may not be possible. Our numbers may fluctuate with the markets.
"I should also point out that the credit crisis will make it tremendously more difficult for developers to secure financing for new hotel construction.
"Only one project has indicated new challenges with getting started as planned. The others appear to be on track and haven't indicated that they expect trouble with financing."
Anticipated hotels include: Park Hyatt at the former Club Med; Ritz-Carlton in Hamilton; Jumeirah at Morgan's Point; Scout Real Estate's five-star resort at the former Wyndham Hotel; and Grand Atlantic Resort and Residences in Warwick.
The Government will continue spending on social programmes such the income-based child care starting on November 3, free Bermuda College tuition to Bermudians taking credit courses who do not already have a bachelor's degree and free public transport for school students.
He added: "We think all of these programs are forward-thinking because they were designed to take some of the stress off working families.
"So be assured that as this time, our commitment to progressive social programs remains strong. Perhaps even more so now than ever."
Public projects will also continue, according to the Premier and will be phased-in though he did not indicate which ones would be subject to this and questions on this also went unanswered.
Just two weeks ago Minister of Finance Paula Cox and Senator David Burch, both indicated Government projects, such as affordable housing, were actually being axed or put on the back burner.
In his speech Dr. Brown also ordered a moratorium on all non-essential Government travel for the next six months. There was no response last night to questions about why the Ministers or the Premier were travelling for anything but essential trips.
The Premier and Ministers will also have to travel by coach class for trips that are three-hours or less, though upgrades using frequent flyer miles will be allowed.
This appears to be the first update by Government on scale-backs in travel which was announced by Cabinet in March as part of a three-pronged cutback on spending including Government's advertising budget and it's fleet.Budget figures reveal Government travel has trebled in a decade, from $2.2 million in 1998/99 to $7.4 million this year.
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