Economic recovery plan ‘a matter of urgency’

  • Recovery plan: a previous gathering of the Financial Policy Council, pictured in 2018. The latest meeting, held via teleconference, discussed economic recovery for Bermuda following the Covid-19 pandemic (File photograph)

Bermuda’s economy suffered from more than a decade of “anaemic performance” before the Covid-19 pandemic, but now there is an opportunity for it to move forward through a “bold reform agenda.”

There are strategic matters that are critical to ensuring the island’s economic recovery following the pandemic, and to service the “inevitable increase in debt” that has been incurred.

That’s the belief of the Financial Policy Council, which said an economic recovery plan should be put in place “as a matter of urgency”.

The FPC members have urged the Bermuda Government to consider factors that enable, or hinder, economic growth, such as immigration.

They said there were areas of the economy where recovery efforts can be focused, such as drawing on the island’s strengths in hospitality and tourism, although the FPC said the sector “is likely to require some reinvention”.

Another strong area to build on is Bermuda’s position as an “innovative and well-regulated international financial centre”.

These thoughts were shared at the fourteenth meeting of the FPC.

The council consist of a number of experienced and respected figures, including deputy chairman Sir Andrew Large, a former Deputy Governor of the Bank of England; insurance sector veteran Michael Butt; Jeremy Cox, executive chairman of the Bermuda Monetary Authority; Dame Amelia Fawcett, who has more than 30 years experience in the banking industry; DeLisle Worrell, a former Governor of the Central Bank of Barbados, who has also worked with the International Monetary Fund; and Gil Tucker, a chartered accountant and board member of HSBC Bermuda.

The council is chaired by Curtis Dickinson, Minister of Finance.

The FPC is an advisory body supported by the Ministry of Finance and the BMA. Its role is to assess possible threats to Bermuda’s financial stability, and to identify policies and actions to mitigate or eliminate such threats.

During its July meeting, members focused on Bermuda’s economic recovery strategy to address the impact of the Covid-19. They expressed support for the sustained efforts made by the Government to contain the public health impact of the pandemic, and to ensuring financial support was available to those who needed it.

In a statement, it said it “supported the swift action taken by the Bermuda Government to address the extraordinary financial needs generated by the fiscal imbalances caused by Covid-19. In this respect, Members commended the Government for proactively engaging the international capital markets to not only fund fiscal deficits but also refinance stocks of existing debt falling due in the short and medium terms. In this respect, members considered the recent debt raising ceiling from $2.9 billion to $3.5 billion to be a wise decision”.

In addition to the discussion on economic recovery, the FPC also addressed developments in tax-related initiatives under way the OECD and European Union, as well as work on a recovery and resolution framework for Bermuda banks, Bermuda’s development as a fintech jurisdiction, and work under way at the BMA on the impact of Covid-19 on cyber-risk management and underwriting in the international insurance sector.

The next formal meeting of the FPC will be in December.