BEST’s Blueprint on sustainable development aims to outline what it means to be a sustainable community and what it will take to get there.

Over the coming weeks the Bermuda Sun will continue publishing the text of the Blueprint, section by section.

 


The economic environment is essentially concerned with generating the disposable funds necessary to purchase goods and services. 

The success of the economy is extremely reliant on the health of both the social and physical environments.

Likewise, the health of both the social and physical environments is affected by economic factors. Economic, social and environmental priorities are often complementary rather than competing, and almost always reconcilable — as is the apparent mutually exclusive but wholly artificial choice between jobs vs. trees.

While the Bermuda economy has shown resilience over the past four centuries and has grown enormously over the past several decades, we are now mainly reliant on a single sector, international business, which is in turn reliant on global events.

Cultivating international business will continue to be critical to meet and pay down our recently expanded debt obligations. It will also be important to work to improve our dwindling tourism industry and to consider new avenues for economic diversification in order to provide a broader range of job opportunities and a more robust economic base.

Initiatives to improve our tourism product need to grasp that the beauty and serenity of our physical environment and the safety and friendliness of our society remain, and are likely to remain, our two biggest selling points.

Similarly, the artificial inflation of our economy through construction booms, driven in no small part in recent years by publicly-funded capital projects, provides only short-term benefits and, as experienced recently with the economic downturn and ballooning Government debt, are simply not sustainable in the longer-term. This is particularly true given Bermuda’s limited land mass and significantly dwindling reserves of undeveloped space.

For sustainable economic prosperity to be achieved, careful consideration and incorporation of both environmental and social factors must be an ingredient in any seemingly economic decision.

From a social standpoint, Bermudians must provide a safe and welcoming environment for tourists and companies alike, and Bermudians must be equipped to play an active role in our economy.

From a physical environment standpoint, both our marine and terrestrial environments must be carefully protected and managed to ensure that we can continue to draw tangible and intangible economic benefits from them in the longer-term.

We examine the following six aspects of the economic environment as examples.

Despite some contraction in recent years, International Business remains the largest pillar of our private sector economy bringing in close to ninety cents of every dollar of foreign currency arriving on the Island.

This foreign currency is now essential to satisfy the demands of public and private expenditure, the servicing of private and public debt, and the paying down of that debt.

With no obvious major alternative revenue streams on the horizon, it will be critical to retain and strengthen our International Business sector for Bermuda to remain solvent.

International Business operates in a global marketplace where there is intense competition for capital. While Bermuda’s key attraction is its low tax structure, there are many other low-tax destinations competing for the same capital.

To remain competitive, Bermuda must provide additional advantages, which historically have included a pleasant physical and social climate, convenient location between Europe and North America, political stability and a high quality of life.

At the most fundamental level, International Business is driven by highly mobile capital and expertise. It is therefore critical to Bermuda’s competitive positioning for us to be welcoming to both. Securing the relevant expertise will remain an important factor. Equally important will be an improved dialogue between industry leaders and policy-makers, particularly on how the island can become a better place to do business.

Alongside its many benefits, International Business places numerous strains on Bermuda’s infrastructure, including increased demands on transportation, power generation, water supply and waste facilities. “Bermudianizing” the sector as much as possible would foster a reduction in the housing and resource demands and reduce some of the negative social and environmental consequences associated with imported labour. In addition to creating more well-paying jobs for locals, this would foster a greater appreciation for the importance of the sector within the wider community.

With a solid education, more Bermudians will be able to offer the necessary skill sets, experience and work ethic required for these companies to succeed.

BEST welcomes more of open, honest and constructive dialogue between policymakers and business leaders focusing on how Bermuda can retain and refine its competitive edge as a destination for global capital and how to get more Bermudians involved in the sector.

BEST also promotes ways for Bermuda’s youth be made aware of the many opportunities available on the island and how best to capitalise on educational opportunities and the various scholarships, internships and jobs available. n

this document was researched and written by members of the BEST research team led by: Alaina Cubbon, Stuart Hayward, Frances Marshall and Marlie Powell

In the next issue: Tourism: Bermuda’s unique potential and its limitations.