The economy is not as good as some would have you believe.
The OBA’s “recovery” was largely stimulus driven. In layman’s terms this means it was mostly temporary. Growth was driven by the projects like the America’s Cup, hotel construction, the airport and other temporary projects. This means that as America’s Cup ended, so did the stimulus it brought. The airport and hotel projects are helping keep things going, but we haven’t seen a real recovery in terms of job growth in industries that drive the foreign income we are desperately reliant on.
Seriously, let’s look at the state of job creation over the last few years.
Let’s filter this down to the core areas that have shown growth over the last couple years:
The only industries that supply much needed foreign income and economic growth locally are under represented. International business has barely seen a bump, same with financial intermediation. Business services is the only area that has seen reasonable growth. The rest of the areas showing growth are local services like restaurants that could suffer as the temporary stimulus eases off. Other sectors are flat-lining or in decline.
The problem we face is that we haven’t seen real growth. The America’s Cup brought a whole bunch of long term tourists to the island who have now left, taking their on island spending with them. Hotel projects provide a temporary boost to construction but likely won’t result in tremendous amounts of jobs. The airport project will help, however the fate of it is uncertain. We’re still waiting to see the full details of the deal released so we can find out truly how bad of a deal it was and what will be done about it.
We’re not in a good position right now. There’s lots of talk of creating new industries, diversification and creating tech hubs. This is great in theory, however we’re competing with the rest of the world on these things. Trust me, competing on global scale is incredibly difficult, especially when your competitors have far better resources and a much larger market than you do. Nearly every place on the planet is trying to create tech hubs. So how can we possibly be competitive as an extremely high cost destination that is a difficult and painful place to do business? That needs to change and unfortunately change is incredibly difficult. In order to be successful we need all hands on deck, the entire island united behind making ourselves competitive to attract new industries and create new jobs.
This is why distracting ourselves with independence or trying to force through discrimination against gay marriage are so risky and get people worked up. Right now it is the absolute worst thing we can do as we are in such a fragile state we need to be incredibly focused on the task at hand. Any risk of disrupting business confidence in the stability of our island can have devastating impacts on our ability to grow and could put us into further decline. No business will want to come here to help us diversify if they have doubts about our stability. Worse, we’ll continue to be divided as an island fighting against each other rather than united in progressing ourselves back towards prosperity. Thus it is incredibly important that our new government takes swift action to immediately put to rest any concerns that arise like independence and resolve issues like gay marriage in an amicable fashion. Our economy is simply too fragile. It is likely quite a bit worse off than you’ve been led to believe and we need to do everything we can to avoid the risk of making it a lot worse.