Fahy on Aon & International Business

January 20, 2011

Bermuda Democratic Alliance finance spokesperson Michael Fahy responded to the recent report from Aon that downgraded Bermuda saying: “The assessment is simply another indicator of what many have been saying for some time. The tough times are yet to come. When a well respected risk management service such as Aon which does insurance business in Bermuda downgrades Bermuda then hopefully the voting public will ask when is enough actually enough?”

Mr Fahy continued on to say that: “The decision to borrow, borrow and borrow by the Government must be called into question. As we have said previously, unlike other countries where there is a wide tax base and a diversified economy from which to raise revenue to ultimately repay debt we only have two pillars. International business and tourism. Tourism is, as we know, at an all time low due partly to a downturn in the US economy but also a failed strategy by the Department of Tourism over the last number of years.”

“We really rely on international business to prop us up. That is shrinking faster than anyone in Government is prepared to acknowledge. We must do everything possible to sustain what we have and build on it. Listen to the concerns of the business leaders. We ignore them at our peril. Optimistic Government statements that fly in the face of known facts are not helpful. The Government needs to be honest about the true state of the economy before it can be fixed. That has not yet happened.”

“The fact remains that Government needs to cut costs. We must implement wage freezes in the public sector and be honest that some redundancies may be inevitable. This is not an option we like to even suggest or want to consider but under the circumstances there may be little choice. The private sector is reducing hours of workers. It is making staff redundant. It is making the tough and unfortunate decisions that need to be made to save their businesses. We cannot afford to wait until the budget to know what is planned by Government. The time for real leadership from the top is now. At the moment it is lacking and there is not a moment to lose.”

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Comments (6)

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  1. News Flash says:

    The facts are that the PLP govt needs to resign…they are pathetic.

  2. Sting says:

    You talk about tourism being at an all time low. Bermuda’s #1 enemy is the Ministry of Tourism who waste millions a year paying govt officials to do nothing. And unless the voters wisen up, the waste will continue.

  3. Ya'll are just not smart enough says:

    Ya’ll really do not beleive these guys??? Especfially since one of the top regulators, AM Best, is saying that the Bermuda outlook is still stable for a fifth year running!
    And being that I am one ine the (re)insurance industry, I can assure that it is not drying up, but rather softening due to the economic constraints which are happening worldwide. Something no country can avoid currently. It will pick up again i can assure you. Just look at the history of the industry, this is not the first time this has happened, not will it be the last.

    • Truth says:

      Friend. You are not keeping it in context. Reinsurance will bounce back, I believe as well. But the idustry does not speak for Bermuda as a whole. The rest of Bermuda is on the steady and rapid decline and we have nothing in place to bring it back. Construction has dried up, retail is dead, tourism is dead. Lean times ahead.

    • LOL (original) says:

      Where do you work I want to apply for your job…………………

      LOL

  4. Googlybda says:

    At last a discussion on the plight of Bermuda!
    Insurance industry is under great pressure from outside Bermuda.
    International business as a whole is under great pressure.
    Lets admit the days of “tax haven” business model are numbered. Once you admit that you can start solving the problems Bermuda faces.
    What are we going to replace this business model with?
    The cost side has been royally screwed up by successive governments and this needs to be addressed, not by belt tightening, but a smaller suit to fit the body inside it!
    The revenue side is a massive problem that is not one the government can influence in any way.
    The third thing is attracting capital to Bermuda without “no tax” carrot.
    This is no time for political bickering!