The signs are good for a brighter year to come

That’s the pleasantries over with, and although my good wishes are indeed sincere, it would probably be more interesting to look at whether 2014 is in fact likely to be a happy year. I, for one, think it will be, or at least happier than 2013.

While I’ve been around long enough to appreciate that the best-laid plans of mice and men, etc, etc, my uncharacteristic optimism is based on fairly solid evidence. What everybody is now looking for in Jersey is a significant improvement in performance, i.e. some growth in the economy, and there the prospects are good.

No one is expecting anything very dramatic, but if it turns out that all of last year’s efforts come to nothing and there is no economic growth in 2014, then there really is something very wrong with the economy.

However, the global economic environment has also improved significantly. Of course there’s always room for someone to mess it up, but indicators point to a much healthier world economy, and as Jersey depends very much on selling things overseas, particularly financial services, that’s a good sign for the Island.

There is already reasonable economic growth predicted for north America and Europe, and even emerging markets such as China, which scared the economic pundits almost witless last year, appears to have halted its decline.

This has proved good for the stock markets, many of which finished the year up around 20 per cent or more. Some investment gurus are even talking about the first synchronised recovery for many years.

This is particularly good news for Jersey, because as the Fiscal Policy Panel has shown, Jersey’s gross value added tends to move in line with the FTSE 100, due to our reliance on financial services.

The jobs market has also improved in the UK, with professional job placements increasing by 8.5 per cent last year, according to the Association of Professional Staffing Companies. This may not have much of an impact on the finance industry, but it could prove a positive factor for tourism.

There is even a fear that the Bank of England won’t be able to hold down interest rates, but there is unlikely to be a rapid increase which could prove disastrous for the economy. However, a modest rise in interest rates could be good for the banking industry, which is a vital part of Jersey’s finance sector.

Even if that doesn’t happen, the finance industry should be well placed to see some growth. A lot of preparatory work has gone into diversifying Jersey’s offering, and although there is no guarantee that this will work, the industry has expressed greater confidence in recent surveys.

In fact, the good news about the finance sector this year is maybe that there is no bad news. Many of the changes in regulations have already taken place or are in progress, so hopefully there are no new nasty shocks just around the corner. At least it’s much clearer what the industry has to do to meet the new standards.

This was graphically illustrated by the French blacklist fiasco. The bad news about that was that Jersey’s charm offensive has obviously failed to win over the French. A lot of work had gone into building up relationships with French politicians and officials, and yet Jersey still ended up on their blacklist.

You might have imagined that a technical breach in the rules on exchanging tax information wouldn’t matter too much to friends, but it did, to the extent that it posed what the Treasury Minister called ‘a very, very serious threat’ to the finance sector.

This merely illustrates the point that it’s all very well signing dozens of tax information exchange agreements, but what the other signatories want is results, not excuses for not being able to supply the information requested. A fairly simple, if hurried, change to the law means that the scope for appealing against a TIEA request has now been limited further. Presumably, everyone will learn from that experience, and we won’t be appearing on any blacklists in 2014.

The other areas of the economy should also be in better shape after a difficult year in 2013. So much taxpayers’ money is going to be spent on construction this year that the problem for the industry might well be coping with all the new business that’s going to arrive over a fairly short period.

The States’ new innovation fund will also be available this year to help Jersey’s budding Bill Gates to launch new ideas, and there will be more help and support for new businesses than ever before.

After a difficult start, Digital Jersey should also begin to reap the benefits of the ambitious and exciting plans they have drawn up to boost the digital economy. It would be surprising if everything worked according to plan, but if everyone does what they say they are going to do (particularly the States in providing support), we should see some concrete results.

Likewise Locate Jersey should, or perhaps even must, see further results from their efforts to attract inward investment. The organisation has had an encouraging first year, which they will hopefully build on in 2014.

This should include more interest from China, although I’m not sure that the tourism industry is going to see a big influx of tourists from China, as Locate Jersey seems to think. It’s obviously a huge and growing market, but there are just as many attractive and easier markets for tourism to tackle much closer to home.

So Jersey tourism’s efforts in Europe should bear fruit in 2014, although it’s doubtful that enough resources are being allocated to them. We’re still spending nearly all our promotional budget in the UK, so it’s not surprising that growth elsewhere is being constrained.

The tourism industry should therefore continue to widen its horizon in 2014, as the finance sector has been forced to do, but the economy as a whole is well-placed to grow again. And there are no excuses.