Our flagging economy in danger of 'falling off a cliff'

FRIDAY, OCTOBER 21: Urgent action needs to be taken to deal with the worst recession to hit Bermuda since the 1940s, elder statesman Sir John Swan has warned.

 “We’re run up a debt, but we haven’t figured out how to pay for it,” Sir John told us yesterday. “If the economic perils of the rest of the world continue, we run the risk of falling off a cliff.”

Sir John’s stark warning comes as the Bermuda Sun today publishes his analysis of the financial crisis gripping Bermuda and much of the world — and his proposals for digging the island out of the hole.

Sir John’s ‘State of the Onion’ document states that around 40,000 jobs are needed to maintain a viable economy. But the figure is already dropping below 37,000 workers — and there are few signs the economy will begin to recover any time soon.

Sir John wrote: “We have already dropped below a number that maintains the basic viability of our economy.”

The successful businessman and former UBP Premier declined to speculate on whether the Bermuda economy had already passed the point of no return.

He said: “Everybody has to make up their own minds. I can’t predict the future. All I can do is say there is a trend line and that indicates we are very much moving — at an increasing pace — to a negative position.

“We have to wonder about fiscal downgrading — the capacity to borrow money would get harder, not just in the public sector, but the private sector as well. We are faced with the question of what to do about it. There is no magic, no silver bullet, but we have to put our collective thoughts together about how we can stop the decline. If we don’t it could lead to all sorts of unintended and undesired consequences.”

Sir John added: “We need to look at what best we can offer the world. We are a purveyor and we have to look at what we can offer our customers.”

Sir John stressed he was not going to get into political mud-slinging and that a solution to the island’s economic woes needed everyone to become involved.

He said: “We’re in a crisis — it’s not about politics. It’s a crisis the likes of which we’ve never seen and there’s not been a serious discussion about it. Barriers — as we have known them — have outlived themselves. We have to protect our sovereign rights, but Japan put up barriers and it has been in recession for 20-24 years. Singapore has removed barriers and it’s one of the most prosperous countries in the world. We have to weigh what’s in the overall best interests of the country and the people. We have to learn that living with foreigners is something the whole world is dealing with. The world has evolved with that process and so must we.

“Bermuda needs to be able to go to the world and sell itself.

“That’s what the rest of the world does. We have got to get together a package that sells Bermuda.”