Regarding my previous post Monaco style exemption zones could rejuvenate our economy Kathy writes:
Sounds like another Jamaica in the making. Shove some Monaco type high wealth individuals behind a guarded gate at Southside and make sure the shanty towners outside don’t break in. I think his idea was well served in the 1930’s but in 2011 Bermuda has to get its crime under control, put the average blue collar worker back to work and get the economy rolling back. I do like the idea of residency certificates, but not to the elite…Bermuda is and never will be a Monaco I am afraid!
Now certainly it was not my intention to suggest the creation of gated communities. Instead the implication was to use zone restricted residency certificates as a means to encourage investment which results in job creation. Perhaps I failed to make my point clear enough or Kathy would be kind enough to clarify why she thinks this idea would be unsuccessful.
Kathy raises an interesting point “Bermuda has to get its crime under control, put the average blue collar worker back to work and get the economy rolling back”.
How exactly do we do that?
Contrary to what union officials believe, we can’t simply require companies to hire people when they can’t afford to do so. Bermuda is reliant on attracting foreign wealth to sustain itself. Long ago we exported our natural resources in the form of agriculture and ship building, then we leveraged our natural beauty and good natured people to develop tourism and finally we leveraged our tax friendly nature to heavily increase our employment base so we could attract foreigners to live here as “long term tourists” and spent considerably in our local economy year round.
Today, we don’t have enough natural resources, our good natured attitude has disappeared and we’ve been driving away our “long term tourists” with xenophobic policies and attitudes. If we sit around and wait for things to magically right themselves it would come as no surprise if we do follow in the footsteps of Jamaica. We cannot put the average blue collar worker back to work if we lack demand for unskilled labour. Unless someone has a revolutionary new idea of how we can expand our tax base without driving it away we can’t simply continue the trend of expanding the civil service.
We have little choice but to do everything we can to reverse the trend of declining spending in our local economy. How can we do this aside from reversing the trend of driving away guest workers and foreign investment? Beyond this, we should be doing whatever we can to reduce our cost of living to make Bermuda more affordable and retrain Bermudians with the skills necessary to earn a manageable living. If we can do this, we’d be on our way to getting our economy rolling back, putting average blue collar workers back to work and hopefully putting a dent in crime instigated by the jobless and those who’ve lost hope in Bermuda’s future. Creating Monaco style zones could offer considerable leverage to help expedite the process. Otherwise, what solutions are there?
There’s a huge difference between “foreign wealth” and “foreign income”. Bermuda has been very successful at least in part by importing foreign income and exporting Bermudian wealth (and in turn earning a return on that investment).
With the hospital project and Bermuda government both able to borrow hundreds of millions of dollars through different avenues it’s hard to make an argument that Bermuda is capital constrained.
Done right, protecting Bermudian’s ability to earn capital returns domestically while increasing foreign income is the way forward and to building a Bermuda that is successful independently of the ebb and flow of the world economy and local industries.
I’m not convinced why ‘zones’ would be needed. I agree that Bermuda should encourage talented people to live here and invest here. This could be done, though, by issuing a limited number of permits each year and then letting people live where they choose, or limit it to the top x % of arv. Zones could create resentment as it would be an official separation of classes of people.