Residency rules and immigration policies are important factors for Bermuda to address as it grapples with the economic challenges and “existential issues” arising from the Covid-19 pandemic.

This is the advice from the Financial Policy Council, which has discussed potential threats to the island’s financial stability emanating from the pandemic.

Measures are needed “both to mitigate threats to tourism and travel, and to facilitate opportunities for development of international business”, it said.

The council noted that addressing areas in the past, such as a revision of residency rules and immigration policies, had appeared difficult but said these were “important success factors, and it was to be hoped that the existential issues arising from the crisis would unlock the key to addressing such issues immediately”.

The FPC is an advisory body supported by the Ministry of Finance and the Bermuda Monetary Authority. Its role is to assess possible threats to Bermuda’s financial stability and to identify policies and actions to mitigate or eliminate such threats. It is chaired by Curtis Dickinson, the Minister of Finance, with Sir Andrew Large as deputy chairman.

Its members predicted Bermuda’s economy would be significantly damaged by the global pandemic, experiencing a major drop in GDP, increasing unemployment and a deterioration in fiscal accounts.

The council recognised that the island was vulnerable because of the openness of its economy, its dominant international business sector, and the important role of travel and tourism.

In a teleconference on April 30, the council welcomed comments from the Bermuda Government that “an ambitious and significant set of economic measures” were being developed to effectively respond to the economic threats posed by the pandemic.

The Council praised the Government, health workers and critical-service providers for “the determined and courageous manner in which they were working to contain the virus”.

It supported the channelling of economic resources to support the healthcare system and critical services, and the shelter-in-place order and policies to limit the spread of the virus at that time.

Support of individuals and businesses affected by the pandemic, in particular the implementation of an unemployment benefit programme as well as the support for the small and medium-sized business sector, was welcomed.

For the longer term, the FPC said plans would need to include possible measures “to mitigate the impact — and to develop new opportunities — on the key areas of travel and tourism on the one hand, and the international business community on the other”.

However, it noted the immediate impact on the travel and tourism sector had been devastating and many issues for the sector lay beyond the control of Bermuda, and would need active participation by Bermuda “in developing necessary protocols for international travel to reassert confidence”.

Also required are financing plans for a variety of possible outcomes, both domestically and internationally. The FPC said a start had been made, but the impact of Covid-19 on government finances, in terms of unexpected expenditure and decreased revenues, would require an immediate review of the budgets and external borrowing requirements.

“Bermuda may be well positioned in international capital markets for any new debt issuance, but any such initiative will need to be underpinned by the credibility of its actions and plans to assure lenders”, the FPC said.

Philip Butterfield, chairman of Bermuda First, and Jonathan Portes, chairman of Bermuda’s Fiscal Responsibility Panel, joined the FCP discussion on April 30.

Other members of the council are Jeremy Cox, Michael Butt, Dame Amelia Fawcett, Gil Tucker and DeLisle Worrell.

The next formal meeting of the FCP is scheduled for July.