Premier and Finance Minister David Burt has announced major policy changes aimed at stimulating the economy, including relaxation of the longstanding 60-40 rule, opening up the legal industry to global law firms and expanding the banking industry.
And Government will also be relaxing height restrictions for residential and mixed-use developments in the Hamilton Economic Empowerment Zone.
In his first Budget Statement delivered this morning, Premier Burt made it clear that investment friendly policies would be critical to achieving economic growth.
In a global economy enabled by technology, money observes no artificial barriers; it moves where it is wanted and where it can earn a decent return,” he told a packed House of Assembly.
Many Bermudians are resistant to the idea of foreign capital, as it has never benefited them. This is understandable, as most black Bermudians have only been spectators of the benefits of foreign investment, not beneficiaries.
Mr. Speaker, foreign investment is not the enemy; it is required to sustain our economy and our way of life! The true enemy of Bermudians who feel marginalised is an unbalanced and unfair economy that allows the haves to get richer while the have-nots fall further behind, not foreign investment.”
He referred to the 60-40 rule which restricts foreign ownership of local businesses to 40%, as an anti-competitive “vestige of our oligarchic past” which concentrated wealth in the hands of a few.
But the Premier noted that some $3 billion earned by foreign residents here had left the island in the last decade.
The new policy would allow up to 60 % ownership of businesses operating domestically.
I recognise that this proposal will face opposition from both sides of the political spectrum,” the Premier said.
There will be those who want to protect their existing interests, and there will be those who feel that allowing entrepreneurs access to foreign capital enabling them to compete is not consistent with putting Bermudians first. However, I want to assure the people of Bermuda that the Government will consult and strike the right balance to ensure that the revision of this rule has the intended consequence of providing more opportunities for Bermudians to become wealth-generating owners and not just employees.”
The premier also announced that a new technology incubator space would be operational by July, that government is working towards the development of the world’s first “Global Risk Management Digital Market”, and “has considered a proposal to establish a cybersecurity and data centre in Bermuda”.
As these technology initiatives progress, the policies of this Government in education, training, immigration and economic empowerment will be shaped to create equality of opportunity for Bermudians.”
Government plans to expand the economic pie by reserving up to 20% of capital spending on companies which meet certain “empowerment criteria” under the new Code of Practice for Project Management and Procurement which states that Government will “use its purchasing power to promote equality of opportunity with regard to disability, gender and race.”
Immediate reaction to the budget statement has so far been positive. The Bermuda Chamber of Commerce described it as a “fair and sensible” budget and praised the Premier for his collaborative approach noting that he had listened to feedback from stakeholders and made changes.
We felt that it was thoughtfully prepared and well balanced, focusing on job growth and diversifying the economy while at the same time being mindful of the high debt that Bermuda has and the financial constraints that goes with that,” the Chamber said in an official statement.
The Budget has some bold new initiatives such as revisions to the 60/40 ownership rules in Bermuda which should improve access to capital for Bermuda’s entrepreneurs to support the growth of small and medium sized businesses which in most economies drives the most job growth. Reference to scrapping outdated policies we found very encouraging as some of what worked for Bermuda in the past will not work effectively in our modern world.
Former Premier Sir John Swan attended this morning’s session, along with Bermuda’s senators and a handful of former MPs.
I came today because I saw a country in trouble,” he said. But Sir John declared himself “impressed” with the budget.
The points are the best I have seen,” he told us. “To achieve what we need to achieve to get out of the position we’re in, we have to make major reforms… We’ve been living in the past too long. Hopefully we’re taking a step now to living in the future. The future is always unknown but if you’ve never taken a step into the unknown you’ll never know what the unknown has to offer.”
This article belongs to Politica ! The original article can be found here: Policy changes target foreign direct investment, economic growth – Budget 2018/19
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