WEDNESDAY, FEB. 15: With ministers and Parliamentarians promising to take a five per cent real pay cut, it is clear that what I have been writing about and, of late, talking about, has proven right.
At 75 per cent and relative to Government’s revenue, the combination of debt service cost and Government’s personnel cost is much too high.
Government revenue tumbled from $991m in 2010/11 to $930m in 2011/12. It is likely to be around $930m for 2012/13.
On its way down, Government’s falling revenue was meeting Government’s rising debt service costs.
Debt service costs were $85m in 2010/11. They jumped to $100m in 2011/12.
Government’s overall personnel costs of $597m were joining up with debt service costs and were gobbling up more and more of Government’s steadily falling revenue.
Now, the crunch! Eight per cent pay cuts for BPSU, BIU, and 17.5 per cent cuts for Parliamentarians and ministers are the DNA, CCTV, fingerprint, and eyewitness evidence that Bermuda’s economy is in decline.
There is one more key issue. Why?
Trash any notion that Bermuda’s finally acknowledged economic decline is caused by the Great Global Recession — the GGR. It is not. The GGR is a minor contributor, responsible for no more than 10 to 15 per cent of Bermuda’s economic decline.
Eighty-five to 90 per cent of Bermuda’s current economic decline is caused by the continuing decline in Bermuda’s residential population.
In 2008, the Department of Statistics counted 40,213 people as working in Bermuda; 27,180 Bermudian, 13,033 non-Bermudian.
By 2010 that 40,213 had dropped to 38,097; with 26,247 Bermudian and 11,850 non-Bermudian.
In two years, Bermuda’s resident [working] population had declined by 2,116 or five per cent.
Our national data collecting systems deliver too little information too late, so nobody knows the 2011 numbers(*).
However, a reasonable projection is that the number of non-Bermudians has fallen by another 1,000 or so.
This means that by December 2011, the non-Bermudian count was probably down to 11,000 or less.
This overall loss of resident [working] population is also an overall loss of residents. I’ve made this point in other columns and presentations, but I’ll make it again here.
Between Census 2000 and December 2011, Bermuda’s resident population rose and fell:
- 62,059 at Census 2000;
- Rose as high as an un-measured 68,000 in 2008 (economic peak and $6.11bn GDP);
- Fell to a measured 64,237 at Census 2010 (and $5.76bn GDP);
- By December 2011 had fallen some more to an as yet un-measured 62,000.
Overall, Bermuda has probably had a population loss (from highest population in 2008 to December 2011) of 68,000 minus 62,000 = 6,000.
This is a population loss of nine per cent in just three years. In any country, under any political regime, following any ideology, a nine per cent population decline will have a similar economic impact.
Bermuda’s population loss has very little to do with the Great Global Recession.
It has far more to do with us lot on our mid-Atlantic coral atoll at 32n64w.
We Bermudians created and sustained the factors that drove out a big chunk of the primary drivers of Business Bermuda - which is what Bermuda now is!
These driven-out people were voluntary residents as well as job-creators in the place and space that Bermuda’s national infrastructure of people, laws, regulations, policies, and general ambience had created.
With politically supported and often politically generated narrow and near xenophobic attitudes, Bermudians altered an ambience that had made us successful at the business of tourism.
The changes in ambience and attitude played a huge part in driving out a big chunk of job-providing residents.
Bermudians created 85 to 90 per cent of those push-them-out factors; and I have written about that.
Today, if any politician or party-line echoer starts oozing a party-line about how Bermuda is affected by the Great Global Recession, just remind yourself that some people’s world view consists entirely of the view seen from the bottom of a deep, narrow, self-dug hole whose sides extend well over their heads.
These half-buried people can only see a very small patch of blue sky.
Remind yourself that most people’s views consist of what they see as they stride around at ground level. These normal people-on-the-ground see forests and clearings and near horizons - and also a blue sky.
Remind yourself that national leaders are expected to fly high and see even farther than people-on-the-ground. National leaders should see far horizons, gathering storms, paths to distant pastures — and they should fly in the blue sky.
In 2012, any Bermudian national figure who blames Bermuda’s economic decline on the Great Global Recession is a person with the world view of a deep-holer, already half-buried in ignorance.
Bermuda’s nine per cent population decline drives ninety per cent of Bermuda’s current national economic decline.
Bermuda’s population outflow needs reversing and that requires a shift in official and national attitudes and values.
The objective is clear! Reverse Bermuda’s population decline.
* In the five page Standard & Poor’s Ratings Report on Bermuda issued forty-seven days ago on 29th December 2011, there were three comments on Bermuda’s national data problems:
(#1 - p.2) “... gaps in official data as credit weaknesses for Bermuda ...”
(#2 - p.3) “... timeliness, frequency, and completeness of statistics and public sector financial reporting ... trails that of many higher rated governments.”
(#3 - p.4) “... markedly improved official data ... could lead us to raise the rating.”