Posts Tagged ‘oba’

I don’t pretend for a moment to be an economist but you certainly don’t need to be one to appreciate that Bermuda’s economy is in bad shape. Whether you blame the global recession or the Government, it’s getting worse and shows no signs of recovery into 2013.

According to Bob Stewart, writing in today’s Bermuda Sun, the Island could well be heading towards bankruptcy. Could we really become another Greece? Mr. Stewart, who used to run the Shell Company in Bermuda and knows a lot more about economics than you or I, says that the failing economy and massive debt means Government simply won’t be able to pay for things like seniors’ healthcare and Government pensions. With life expectancy increasing, medical insurance and treatment costs going through the roof, the working population decreasing, and wages fast losing pace with inflation, the math doesn’t add up. It’s simply unsustainable.

Writes Stewart: “There are two major government obligations for which adequate money has not been set aside. These are medical insurance (mainly Future Care), and government pension plans of which there are two major schemes. The first is the Social Security Fund, and the second is the Public Service Superannuation Fund. To meet their obligations, without calling on future tax revenue both of these funds should be funded at around the 100 per cent level. Both are massively underfunded – around 35 per cent for each.

“The total for such unfunded retirement liabilities is somewhere around $1.5 billion which is in addition to the government debt of around $1.5 billion. In other words, Bermuda is in debt to the tune of $3 billion or around $60,000 per Bermudian, including children.”