Vexed Bermoothes

Paula Cox, the Minister of Finance has just issued what is clearly a “get ready for bad news” announcement.

While it is far too early to determine with any certainty what precise impact the current financial events unfolding in the US will have on Bermuda, there are clear signals that the changes will have some potential employment repercussions in Bermuda and perhaps implications for financing of some private sector projects.  I have indicated already that the growth prospects for our economy through the balance of 2008 are lower as a result of the continuing fall-out of the sub-prime debacle. In the face of the most recent events involving Lehman Brothers and American International Group (AIG), that outlook may very well characterise 2009 as well.

What we want to know is:  how will the Bermuda Government move to immediately reduce its expenditures in the face of a contracting economy and tax base?  Bermuda’s public budget has doubled under her tenure – by approximately a half billion dollars annually.  It’s time to rein in the spending … and fast.

All signs are that Bermuda’s international companies have tired of (and are unable to maintain) their role as Bermuda’s Fairy Godmother.  The quiet layoffs, drying up of sponsorship dollars, and new offices in friendlier climes are all bad signs.