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Signs of a solid platform
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The news that the value of Jersey’s economy shrank by five per cent last year provides confirmation, if it were needed, that we have been significantly affected by the global financial turmoil, not least because global financial services now make up the lion’s share of the Island’s trade.
Since the credit crunch of 2008 and the slashing of interest rates which followed, the value of the Jersey finance industry has declined by a sobering 28 per cent.
The overall decline, however, has been estimated at a less dramatic 13 per cent and, to draw a positive from a negative, there is encouragement to be found here in the fact that other sectors such as tourism, agriculture and construction have held their own, or even grown slightly, during this unprecedentedly difficult period.
Few can remember a time when maintaining profits has been so hard for so long, or confidence so slow to return. Assuming, though, that the world economy does eventually return to better health, the main engine of Jersey’s prosperity, financial services, will be in a better position to benefit than before the crisis, which has served to stimulate innovation in new markets around the world.
Meanwhile, uncertainty over the zero-ten tax regime has been removed to the satisfaction of the industry, which has also continued to receive regular international endorsement and accolades.
It would be a lost opportunity, however, if we allow ourselves, as and when things improve, to fall complacently back into the trap of over-reliance on finance, which has dominated the Island economy for so long and will continue to do so for the foreseeable future. One of the most interesting points in the 2010 statistics is that the combined economic value of other industries and activities exceeded that of finance for the first time since such records began.
Combined with a healthy new appreciation of the potential volatility of world markets, this unanticipated green shoot must surely offer encouragement to keep on increasing efforts to develop new, low-impact industries, revive the traditional ones, create a greater variety of job opportunities and build a truly mixed economy combining flair, imagination and stability.
The resilience and adaptability of the Jersey economy over the centuries is legendary. It has had a bit of battering lately, but the time has come to plan for another era of bold Island enterprise.
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