Islands Report Recommends Diversification
Island jurisdictions — including Bermuda — which have traditionally been reliant on just one or two revenue-generating industries need to diversify their economies if they are going to successfully adapt to the post-recession world says a new report.
According to the recently released Island Monitor report — which focuses on government income and expenditure trends in 14 islands — governments need to vigorously pursue a broader balance of direct and indirect revenue sources.
For many years Bermuda’s twin economic mainstays have been the off-shore financial services sector and tourism.
“Of the islands analysed in the Monitor, Iceland and now Cyprus have experienced catastrophic financial crises,” said the report. “However, it is interesting to note that Iceland is staging a remarkable economic recovery. Other island communities are borrowing to meet public service costs.
“An example is Bermuda, which, for many decades, has enjoyed some of the strongest levels of economic performance of any island in the world. However the island is now in its fourth successive year of economic contraction which has led to high levels of unemployment and other social problems. The Bermudian government is now being very proactive in its endeavours to address the decline.”
The report, prepared by Guernsey-based Island Analysts based on economic data from the first quarter of 2013, went on to say: “External threats, such as tax transparency, regulation, internet shopping, competition from locations which can offer a cheaper labour supply and better market access are all increasing the pressure on islands to broaden their economic base.
“That in turn also requires an island government to have a broad balance of direct and indirect revenue sources so that there is less reliance on only one or two sources which could be adversely affected by a changing economic profile and performance.”
Islands covered in the report were Bermuda, Iceland, Cyprus, Cayman, Jersey, Malta, Hong Kong, Singapore, the Isle of Man, Guernsey, Malta, Mauritius, Barbados, the Bahamas, Hong Kong and the Australian state of Tasmania.
The report concluded: “With the economic, social and political turbulence being experienced by various islands, and possibly still to be experienced by others, island jurisdictions have to remain fully abreast of challenges, potential solutions and initiatives being addressed by islands around the world.”
The second quarter Island Monitor Report — covering “Island Economic Sector Performance” — will be released in June 2013.
Any suggestions as to how this gets done. What does the Island have to sell at this point to diversify? Some type of tourism rebirth seems to me to be the only answer.
It’s green and grows on trees.
American money??