Anti-investment public policy

Tthe widespread discussion in the public (although largely silent from the Government) about ways to reverse or slow the deepening recession in Bermuda has primarily focused on taxes and spending.

This is important, but the hard truth is that absent cuts to services it is going to be very difficult for Government to reduce spending by a material amount if they have ruled out job losses other than by attrition in the civil service.

It seems to me that missing from the discussion has been a focus on how to grow the economy, and attract - or re-attract - investment into Bermuda, both the local and the international business economy.

Government's policies such as term limits and land license restrictions are anti-investment - and by extension anti-growth policies. Their existence signals to Bermudians and international investors that there is significant regulatory risk in Bermuda and there is nothing like unpredictable policy and knee-jerk legislation to scare away capital.

Unless we can grow the economy - understanding that a 3rd wave of reinsurance capital is unlikely to come again post a shock event in the same size and manner (more insurance linked securities and side-cars which do not generate the same quality and quantity of jobs) - Bermuda's economy is going to be in a prolonged malaise.

Removing anti-investment/anti-growth policies such as these (that do nothing to protect and promote Bermuda or Bermudian interests) would be a step towards acknowledging that the world has changed.

While Mr. Burch was apparently finding humour in the stagnant real estate market on the radio on Friday (rapidly plunging rents will be testing mortgagees ability to pay), I was reminded of a story someone recently told me about their land license experience.

The cost of the legal process to obtain the documents to apply for the license was $5,000, this for someone who is actually eligible for status but has yet to complete the process - partially their own fault I know but the example is illustrative nonetheless.

On top of that you can add the license fee of I believe $1,400 or thereabouts.

But here's the kicker. Immigration granted the license with the stipulation that the owners (a Bermudian with non-Bermudian spouse and Bermudian children) not rent the apartment attached to their house.

What is the point of that? That is a) irrational and b) hurting a Bermudian family financially c) reducing the supply of dwelling units and d) a disincentive to invest in real estate in Bermuda. This is not a second residence, or an investment property, this is their home.

It is ill-thought out reactionary policies such as these that are making Bermudians and non-Bermudians alike question the wisdom of investing in their country. They achieve nothing but engender ill-will and scare off investment.

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