SUSTAINING AND GROWING THE ECONOMY
Tremendous work is ongoing to strengthen and build Bermuda’s economy and address the many challenges arising from the pandemic, writes The Hon. Curtis L Dickinson JP, MP, Minister of Finance.
“With the resumption of greater levels of commerce, there is now increased focus on sustaining the economy.”
The Hon. Curtis L Dickinson, Minister of Finance
COVID-19 has had a profound impact on our economy and our public finances. Since the beginning of the pandemic, the government of Bermuda has made the prudent decisions necessary to ensure that this crisis was appropriately managed, implementing several health measures designed to prevent the virus’s spread and keep the Island safe.
As we continue to focus on our Island’s health and safety and the necessary efforts to ensure that Bermuda remains safe, tremendous work is ongoing to strengthen and build Bermuda’s economy and address the financial challenges arising from the pandemic.
The economic impact of the public health measures required to suppress COVID-19 caused severe reductions in the Bermuda economy during the first half of 2020 and beyond. However, with the reopening of the economy and the borders, the Ministry expects economic activity to increase during the second half of 2020.
With the resumption of greater levels of commerce, there is now increased focus on sustaining the economy and building on the ongoing work to stimulate it.
Although COVID-19 will cause a severe shock in all directly affected economies, including ours, the economic policy actions we have taken during the crisis are assisting with our economic recovery pace.
Our economic recovery
While this crisis has created unprecedented challenges for Bermuda, we believe that we will get our economy moving again, given how we have successfully managed the health risk brought on by the COVID-19 pandemic.
In May 2020, I established a COVID-19 Economic Advisory Committee comprising a diverse group of 11 local and global business and community leaders. This committee provides insight and expert advice on protecting jobs and stimulating economic activity during the financial crisis stemming from the COVID-19 pandemic.
The committee’s objective is to assess and recommend prioritised impactful strategies for short, medium and long-term economic recovery from the crisis.
The Economic Advisory Committee has been meeting regularly since its formation, and it has prioritised ideas for the retention of existing business, growing existing sectors, and attracting new industries.
Over 50 short-term ideas have been prioritised by industry, which are considered ‘quick wins’ to assist individuals and businesses in surviving during the initial impact of COVID-19. The ideas focus areas include taxes, jobs, immigration, tourism, technology, and new-sector growth.
“We can distinguish ourselves through our reputation of being a safe and clean tourism destination.”
The following measures will be taken to promote the development of Bermuda’s economy:
- Amendments to the trusts legislation were recently passed, which will dramatically increase Bermuda’s marketability by modernising our trust laws;
- Led by the Bermuda Business Development Agency (BDA), marketing efforts, policy, and legislative changes are being advanced as part of a targeted Asia and Hong Kong strategy;
- The Cabinet Office, in conjunction with the Ministry of Finance, BDA and Bermuda Monetary Authority (BMA), is crafting and advancing standalone family office legislation to differentiate Bermuda’s offering in this competitive global space;
- To support the Ministry of Finance and the Registrar of Companies, the BDA is setting out a straightforward strategy centred around marketing Bermuda’s economic substance regime, which will result in specific changes for companies and ultimately benefit Bermuda in the form of more jobs;
- As our fintech strategy continues to yield new company formations with more companies applying to be licensed under Bermuda’s framework, the BDA in conjunction with the BMA advanced changes to the digital asset framework for the Legislature to consider. The Bill passed in the House on November 27;
- The Regulatory Authority is advancing the necessary fee structure that will allow Bermuda to bring into force legislation to promote subsea cables; and
- The Bermuda Economic Development Corporation is finalising guidelines for approved residential schemes in certain economic empowerment zones to attract Bermuda-based investment, creating construction jobs while maintaining the rich cultural history of these economic empowerment zones.
The international business sector, in particular the insurance sector, has remained resilient during 2020, despite the pandemic. This sector will continue to be the primary driver of our economy.
Overall, the Bermuda insurance market has adapted well to COVID-19-related restrictions and continued to service policyholders in a nearly seamless manner. No significant operational or solvency matters were experienced, highlighting the resilience of our market.
The COVID-19 pandemic has affected the profit and losses of insurance providers but not their solvency, and our market should be able to withstand the impact of the pandemic even if an above-average catastrophe season occurs. Furthermore, the COVID-19 pandemic may have some potentially positive effects for the Bermuda insurance market if new insurance business lines develop, and existing insurance lines grow.
There has also been significant growth in the long-term insurance sector. The BMA will continue to closely monitor the effects of the COVID-19 pandemic and market developments.
Through the BDA, the government will continue to pursue targeted business development opportunities in key industries aligned with Bermuda’s value proposition and anticipated future growth potential.
These are risk and insurance solutions; high net worth services (private clients and family offices); asset management (funds, insurance-linked securities, and private equity); and technology and infrastructure (hotel investment, subsea cables, and space satellites).
The adverse economic impact and loss of jobs across the tourism industry due to the COVID-19 pandemic are devastating. However, the Bermuda Tourism Authority believes Bermuda will accelerate its road to recovery in the tourism space, given how we have successfully managed the health risk brought on by the COVID-19 pandemic.
Although Bermuda’s tourism industry has suffered a massive impact, like all other jurisdictions that rely heavily on travel and tourism, we can distinguish ourselves through our reputation of being a safe and clean tourism destination.
A significant part of Bermuda’s tourism recovery marketing plan will rely on this reputation. We believe it will aid in our recovery strategy because health and safety have never been more important to travellers.
Additionally, we have seen significant interest in the Work from Bermuda One Year Residential Certificate. Bermuda is seen as a safe place to live and work. This initiative is an excellent opportunity for people to see what Bermuda offers and consider placing their business here and living here for the long term.
Bermuda has demonstrated that we have taken this pandemic very seriously. We have adapted to change, been innovative, and our infrastructure has been resilient. The sooner we can get the economy back to some semblance of normal, the better for the people of Bermuda.
Image courtesy of Shutterstock / Doctor Jools