BENEFITS: Overseas tradesmen bring specialist skills and put dollars into our economy.
BENEFITS: Overseas tradesmen bring specialist skills and put dollars into our economy.
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Over the course of the last couple years, the message from many sources has been: Foreign investment is the key to getting our economy turned around. 

Those on the front line of creating business opportunities see that, and understand it. But those who are more vulnerable to the waves of layoffs and business closures don’t seem to be buying in to that point. 

Perhaps that word ‘foreign’ carries too many negative connotations for many Bermudians to listen. 

Lately, there has been a shift to a simpler and perhaps more palatable message, explaining the need to bolster the local workforce. 

Local economic prognosticators, Larry Burchall and Sir John Swan, provided a reasonable analysis of this theory in a recent newspaper column, in an attempt to deliver a more acceptable version of their overriding message, one that has a higher chance of being heard. 

They say that to grow Bermuda’s economy we must increase our workforce.

Economy

Only then will our internal spending increase on services and essentials, and even luxuries — all the things that drive our GDP (Gross Domestic Product). 

It is no coincidence that a steady drop in GDP since 2009 is matched by a corresponding decrease in the local workforce. Fewer people working, fewer people spending. 

As an example of the effect of even a small number of imported workers, a local construction business just brought in two specialized, overseas tradesmen to assist with a subcontract on one of the few big projects currently in progress. 

They are paying rents to a local landlord; they are eating in local restaurants, renting bikes and spending money at other city establishments.

They are contributing to our economy, and all those that benefit directly are grateful to see them. 

They are also contributing to the growth opportunities of the currently three, eventually five or six, local tradesmen working with them. 

Expanding our workforce with visiting tradesmen contributes to every aspect of our economy in a healthy and productive way, as well as improving our future prospects.

Obviously, we can’t increase our workforce without jobs. But where are these new jobs going to come from? 

We keep hearing that a tourism development is going to break ground. Mr (Carl) Bazarian’s Park Hyatt in St George’s, the Grand Atlantic on South Shore, and Morgan’s Point all have had their moments in the news at varying intervals. 

Presumably the Grand Atlantic’s hotel component is somewhat tied to the sale of the residential units recently completed, but as yet unsold. 

Morgan’s Point has now been officially handed over to the developers after finalizing the land swap, but this is a large multi-dimensional development, that will take much planning and much financing. 

Certainly there has been no news of imminent financing, nor of any construction designs in the works. 

We heard last week that Park Hyatt could break ground before the end of the year. Sounds great.

Global economy

But the marketplace has been ominously quiet on designs and budgets, two processes that usually get the construction and design industries revved up, or at least on notice for the prospect of new work. 

The recent purchase of the Hamilton Princess by the Green family, and the promise of a $50million dollar renovation expenditure, is exciting news for Bermuda, and will certainly aid the construction industry, but we can’t expect the Greens to single-handedly revive our economy.

So we look to International Business for signs of development interest.

As the market has tightened over the past few years, and businesses have taken a closer look at costs, they have broadened their outlook and found attractive incentives, and welcoming attitudes, being offered in other jurisdictions.

International company tax is reportedly down by more than 28 per cent in the first two quarters of 2012 over the same period last year; a strong indication of the diminished activity in that sector. 

As one of the leading Government revenue generators behind Customs duties and Payroll Tax (with their own drops of 6 per cent and 23 per cent respectively), these figures provide substance to what we all see every day: less traffic on the roads, less money spent in our retail shops, empty seats in most restaurants, and lots of empty office space.

Obviously, the new global competition has generated enough interest to coax a significant number of relocations from our small marketplace, thus reducing our jobs and workforce.

Not all the new domiciles will turn out to be the nirvana they promised though, so all is not necessarily lost yet. 

We can rebuild our economy, as we have done time and again over the centuries since the first settlement of the island.

But we need to act decisively if we’re going to turn this outflow around and, as so often happens with large government bureaucracy, the reaction so far has been excruciatingly slow.

There is some encouraging news, however: Some facets of Government appear to be getting this message. 

Perhaps their high rent apartments stand empty? Maybe there aren’t as many people filling their restaurants? Possibly their media business doesn’t have the same level of advertising clientele? 

Whatever is driving this change, the recent Immigration policy review produced a draft that represents a considerably more welcoming attitude to work permit policy and ‘guest’ workers. New incentives for job creators, like automatic and long-term work permits should help make the selling of Bermuda Inc a lot more enticing. 

Couple this with recent changes in land ownership policies, and we’re seeing a bit of a change in attitude to the foreign investment that built this economy over the last 80 years or more.

It is a natural instinct to think that in times as lean as they are currently, we should save every possible job for Bermudians. After all, we have a moral obligation to protect our brothers. But our local decline has shown us over the last few years that this protectionist thinking is having a negative effect, it is sucking the life out of our economy. 

We must accept that we participate in a global economy and should accept, even invite, a wide variety of intellectual and financial capital into our economy.

Placing restrictions that discourage this input is tantamount to inbreeding; it’s just not healthy.

Charles Dunstan is the president of the Construction Association of Bermuda. He is also the managing director of Kaissa Ltd, which specializes in roofing, waterproofing, specialty exterior wall cladding systems and interior raised floor systems.