Chamber Reacts To Ratings Agency Review

April 5, 2013

[Updated with PLP response + 2nd Chamber response] The recent actions by Moody’s and Standard & Poor’s are not a total surprise nor a major concern as rating agencies tend to look at past performance to project what could happen, said the President of the Chamber of Commerce Ronnie Viera.

Earlier this week Moody’s placed Bermuda’s Aa2 government bond rating on “review for possible downgrade,” citing the “steep rise in government debt since the global financial crisis and the prospect of further rises in the coming two years.”

This followed after Standard & Poor’s revised its outlook on Bermuda from stable to negative, citing a “prolonged economic downturn” and “deteriorating fiscal performance.”

S&P did affirm its ‘AA-/A-1+’ long- and short-term issuer credit ratings [ICR] on the island, and said they expect Bermuda’s economy to stabilize and begin to modestly grow in 2014-2015.

Mr Viera said, “From a Chamber perspective it is not a total surprise bearing in mind that rating agencies tend to lag behind news wise and look back at past performance as a way to project what could happen.

“Nor is it a major concern at this point. Given that they will have looked at data for the past year, specifically 2012, it is not the current Government’s performance under review.

“In that regard, we do however find the Shadow Minister’s response of interest, as he seems to completely overlook the performance of the former Government and how that has directly affected the recent ratings announcements.

“We all support the concept of Government spending cuts, but we have not heard the Opposition offer any ideas as to how this might be accomplished nor an suggestions regarding increasing revenues.

“Indeed to-date they seem to have opposed every suggestion being put forward by the new, 4 month old, Government. The Chamber cannot stress enough just how important it is for our politicians and the Community in general, to move beyond what is often nothing more than petty politics and start working together to move this Country forward.

“The more we focus on in-fighting the more our competitors stand to gain,” concluded Mr Viera.

Update 9.55am: Shadow Minister of Finance David Burt said, “As a former member of the Board of Directors of the Bermuda Chamber of Commerce, I know firsthand that the Chamber is supposed to remain apolitical.

“If the Chamber has decided to abandon its apolitical stance and will now publicly attack and question the Progressive Labour Party, the members of the chamber and the people of Bermuda should be informed of this major reversal in policy.

“If this long-standing policy has not changed, then I respectfully suggest that the Chamber President reserve his personal political commentary for Facebook.

“Regarding the Chamber President’s claim that the Progressive Labour Party offered “no suggestions”, I will email Mr. Viera a copy of the Progressive Labour Party’s Throne Speech Reply and Budget Reply so that, in the future, when he speaks about the Progressive Labour Party, he can speak factually.

“During the recent session, The Progressive Labour Party supported the majority of legislation that came before the House of Assembly. Not only did we support a majority of the measures, we also worked with the government to strengthen some bills, specifically the 2 year payroll tax exemption for new Bermudian hires.

“Suggestions contained in our Budget Reply, which the President of the Chamber is unaware of, were incorporated into the final bill that was passed into law. It was the PLP’s recommendations that plugged a loophole which would have cost the government precious revenue!

“It is our constitutional responsibility as an opposition to hold the Government to account, scrutinise their actions, and provide alternatives. As the new Shadow Minister of Finance I will continue to be aggressive in doing my job for the betterment of Bermuda and will make no apologies for doing so.

“As much as Mr. Viera would like to reflect on the past, the election is over; The OBA are now the Government and the PLP are now the opposition. I recommend that he take his own advice and, ‘move beyond what is often nothing more than petty politics and start working together to move this Country forward’.

“Part of that is realising that, despite his personal political leanings, the opposition has a vital role to play in a vibrant democracy such as Bermuda. Further, it is my view that Organisations such as the Chamber of Commerce also have an important role to play and enjoy greater credibility when they conduct their affairs in an apolitical manner.

“I look forward to having the chance to meet with the President of the Chamber of Commerce and my former colleagues on the Board of Directors to listen to their concerns and share the PLP’s ideas for Bermuda’s economic diversification,” concluded Mr Burt.

Update Apr 6: In response, Mr Viera said, “The Chamber remains apolitical however I stand by my earlier comments. The rating agencies reports are a reflection on the economy’s performance in the past and present, the effect of which is still being felt by our members.

“We are glad to hear that Mr. Burt will work with Government as his reply suggests and are happy to meet with him to better understand the Opposition’s ideas on how they would reduce the level of Government expenses, debt and increased revenue generation.

“Mr. Burt was a valued member of the Chamber Board and we welcome the opportunity to meet with the him to discuss how the Island can move forward collectively and begin the road to financial recovery.

Read More About

Category: All, Business, News, Politics

Comments (31)

Trackback URL | Comments RSS Feed

  1. Looking for Leadership says:

    Is this from the OBA or the Chamber of Commerce?

  2. Common Sense says:

    It is the Chamber of Commerce applying simple common sense and logic to our economic situation. That’s what they do to try to protect Bermuda’s business community and our economy.

  3. Argosy says:

    “….. the PLP’s ideas for Bermuda’s economic diversification,” concluded Mr Burt.

    You mean the same ideas as you had for 14 years up to Dec 17, 2012?

    No thank you, Mr. Burt!

    • Independent says:

      @ Argosy,

      I have no problem with people pointing out the PLP errors, because there are many. However, I am tired of people like you who keep saying we have had 14 years of misery, which is simply not try. If you want to make statements, be factual, and have information to back it up. We all know the PLP lost their way, but you can’t sit there and honestly say we have had 14 bad years.

      • Jason Smith says:

        Agreed. It really all started around 2006 which just happened to concide with the changing of the guard (of leadership that is) and the passing of the very able Mr. Eugene Cox.

        • Seriously.... says:

          Cox died in 2004 mate. Keep it correct.

        • Independent says:

          @ Jason Smith,

          When exactly they fell off can be debated, but they did fall off. Sadly, this is what happens to most Governments when they have been in power for some time.

          I just hope people don’t put all their eggs in one basket, and expect the new Government to be the answer to all our problems. Politicians will be politicians!

      • Argosy says:

        OK, how many years of misery have we had and how many more will we have because of their incompetence and other “misdeeds”. The point is, people like Mr. Burt should not ask us to listen to his party’s ideas when those ideas have proved to be such a disaster.

        The PLP were a disaster from day one.

        • Bermuda Cat says:

          @ Argosy,

          That is an opinion again, not fact. They have not been a disaster from day one, so I cannot agree with you. It sounds like you have something personal against them, because they have done positive things for this country.

          On a seperate note, I wonder what Bermuda would have been like if we have people such as yourself holding the old Government as accountable, as we are holding the PLP. But I guess that’s ancient history? Am I to believe corruption only started with the PLP?

          • Argosy says:

            No, but they certainly took it to a new level!

        • Eastern says:

          @ Argosy

          Your statement above is simply not true. I will call it as it is everytime. It was about 2006 that things started go down hill. And the PLP were not a disaster from day one. Your last comment is borderline racist and insults the black people of this country.

          • Argosy says:

            Didn’t take long for the R card to come out, did it!!

          • Mad Dawg says:

            It’s racist now to say the PLP was incompetent and to allege misdeeds? How is that racist?

            Sounds like pure fact to me.

  4. Al says:

    Ah yes, instead of taking this criticism to heart the PLP is instead attacking the messenger.

    When the PLP is resorting to name-calling dubbing the OBA’s spending and efficiency commission with a childish nickname the Chamber is quite right to remind them of the need to get serious and provide real solutions instead of petty attacks.

  5. Amazed says:

    On this issue Mr. Burt is correct the chamber must remain neutral and it is clear that Mr. Vierra is not familar with how rating agencies work!

    • Eastern says:

      I agree with you “amazed”. Mr. Burt is correct on this one; the chamber should remain neutral polticly. If you remember the Standard & Poor’s said that the newly elected government have inceased debt by 30%.
      Mr. Viera should have eliminated any references to the PLP from his comments as I’m sure that there are PLP supporters that own businesses and also support the Chamber of Commerce.

  6. Truth (Original) says:

    Mr. Burt is right. The Chamber erred in making a clearly political statement.

  7. Hmmmmm says:

    And so it begins. The newly emboldened emerge from their former cloak of “Bermuda First” to be the naked partisans we always knew they were. Viera’s statement could’ve been written by Don Grearson; or maybe it was?

  8. Jokes for DAYS says:


    Burt has the audacity to now try to take credit for the 2 year payroll tax exemption?!?!?!?! Meanwhile Roban and others in the PLP keep framing it as “A huge handout to rich businessmen”.

    How is anybody supposed to take these clowns seriously when they talk out of both sides of their mouth on this issue? DON’T THEY REALIZE WE HAVE ALL THE THINGS THEY SAY WRITTEN DOWN?????

    • Oh this is Funny says:

      Where in this statement is the PLP taking credit for that 2 year tax freeze? Burt Said “We also worked with the government to strengthen some bills, specifically the 2 year payroll tax exemption for new Bermudian hires. Suggestions contained in our Budget Reply, which the President of the Chamber is unaware of, were incorporated into the final bill that was passed into law. It was the PLP’s recommendations that plugged a loophole which would have cost the government precious revenue!”

      I think they are taking credit for “plugged a loophole” but I don’t think they are taking credit for the whole thing. Thats a bit of a strecth from above no?

      • Jokes for DAYS says:

        Feb 22nd OBA Budget, p15:

        “This tax holiday will not be available to employers for their existing Bermudian employees. The Tax Commissioner’s Office will be set up to be watchful for those few unscrupulous employers who may wish to try to game the system.”

        March 1st PLP Budget Reply, p8:

        “Although this exemption is targeted towards new hiring, there is no specification that the new employee needed to be unemployed prior to their hiring in order to qualify for the tax exemption. This means for general turnover inside the economy such as someone losing a job and getting replaced; or someone moving to another job, this plan, as constructed, will lead to lower government revenues.”

        March 26th, Walter Roban’s 100 Days rant:

        “The OBA maliciously refused to provide tax relief to Bermudian workers while easing the taxes on their business friends”

        That’s what it looks like when you are lying and trying to take credit for something and AT THE SAME TIME saying how terrible it is

        No shame in their game.

      • Jokes for DAYS says:

        Let me put it this way: the payroll tax holiday is one of the signature pieces of the OBA’s economic turnaround plan, and the one the PLP has been trying to criticize the most as being a “handout to business friends”. So for the PLP to be so morally opposed to it , it’s pretty rich for Burt to now be saying the PLP saved this by pointing out a loophole which was already accounted for in the OBA’s budget statement.

        • Oh this is Funny says:

          The loophole wasn’t accounted for. The OBA changed the tax break after the PLP pointed it out.

  9. LaVerne Furbert says:

    From the International Labour Organisation (ILO)

    “While global economic recovery remains anaemic, most industrialised
    countries continue to face growing unemployment
    and public debt. Average unemployment in the Organisation
    for Economic Co-operation and Development (OECD)
    countries rose from around 5% in 2007 to over 8% in 2012.
    The Eurozone is faring worse, with unemployment over 11%,
    and still rising in some countries. The unemployment rate in
    Spain rose to 26% in 2012, with youth unemployment surging
    to 55%. In Greece, it stood at 26.8%, the highest in the European
    Union (EU) with youth unemployment edging towards

    After the Great Recession hit developed countries in 2009, the
    public debt situation deteriorated rapidly. The average public
    debt in industrialised economies increased from around 70%
    of GDP in 2007 to about 110% in 2012.

    When the crisis first hit, world leaders, including those in the
    largest economies in the G-20, acted decisively with large fiscal
    stimulus packages totalling about $2.6 trillion during 2008
    -2010. The International Labour Organization (ILO) estimates
    that 7 to 11 million jobs were created or saved in G20 countries
    by such stimulus packages in 2009.”

    As you all see, Bermuda is no different from most industrialised countries.

    • Laverne….seriously…you cannot be trying to compare Bermuda to ANY industrialised country!! We are not an industrialised nation such as the ones you choose to refer to. Please read and understand the following:

      An industrialized country is a state that which economy is based on industries. Diverse industries of all kind, such as for instance oil refineries, precious metal foraging. A state that exports produced goods on its own land to foreign countries. Industrialized country’s are always in a good economic state. By creating industries they create work for the population.

      Bermuda is very much different from most industrialised countries…as MOST of us can plainly see.

      Keep trying….

      • Chuckling says:

        You might want to look up the definitions for an industrialized county. Then amend your comment.

        • Chuckling says:

          Far too many bloggers with misinformation.

        • You beg to differ? Care to clarify? How do we classify as an industrialised country? Surely not because of our tourism industry!!!!

    • Mad Dawg says:

      LaVerne with the great PLP myth again.

      LaVerne, the US was in recession for 16 months. We have been in recession for 4 solid years, and likely for another year or so to come. Bermuda’s recession was much, much worse than economies around us. Needlessly.

      We went into the recession with almost no debt. And what did we do? Did we conserve resources, preserve jobs? No. We chased away jobs. We alienated businesses. We spent tax money on ridiculous vanity projects, and projects that were expensive but had no value other than to enrich selected well-connected political elites. We were robbed LaVerne.

  10. Alvin Williams says:

    Well if PLP policy chased away jops? recently announce employment statistics are certainly an eye opener on who is surviving in a much better position economically. Whites continue to earn up to 50% more than Blacks and this dispite the higher level of educational and acadamic qualifications attained by the black Bermudian. the foreign worker on average earns allmost 40% more than Bermudians generally. something more is at play than the former PLP government policies in this regard and I look forward to an examination of the real factors behind these great disparities in wages earn by Bermudians and especially it impact on Black Bermudian

    • Mad Dawg says:

      The only sector ‘doing well’ Alvin is the civil service, according to those statistics. Every other sector has lost jobs, some in the hundreds or thousands. But there are actually more civil servants now. Amazing, considering most of them do nothing of any value, and the population they administer has reduced significantly.

      It’s about time civil servants took some consequences for the PLP debt mountain, just like the rest of us already have. They were a core voter base for the PLP; they therefore share the blame for the economic mess the PLP created. They should be willing to take pay cuts, like the rest of us have, to help Bermuda’s economy recover.

      And the reason Bermudians aren’t doing better on salaries is because the PLP chased away higher-paying employers, with their harmful term limits and perpetual xenophobic hissy fits. The jobs lost were good, well-paid jobs, largely held by Bermudians. The PLP can hardly now complain that Bermudians don’t have as many high-paid jobs. The PLP created that situation.