‘Two-speed’ start to year eases as economy is lifting
Saturday 7th June 2008, 9:29AM BST.
GUERNSEY was experiencing the effects of a two-tier economy at the start of this year, according to Treasury minister Charles Parkinson (pictured).
In the first of the department’s quarterly bulletins, he reveals that there seemed to be a growing divergence between the fortunes of the financial services sector and the island’s domestic economy. He compared the slowdown in the housing market and the knock-on effect that that has had on the sales of household equipment and other ‘big-ticket’ items, such as cars.
However, the fund management industry saw £26bn. of new business in the first quarter of the year, which took the total of funds under administration in Guernsey past the £200bn mark. Deputy Parkinson believes the island may now be out of that particular two-speed situation for the time being.
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I’m not sure how having £200bn + of funds under administration can be a pointer to a convergence of the two tiers of our economy. Surely the fact that Finance is doing so well will mean those not involved in Finance are more likely to be left behind. With more wealth concentrating to fewer people, whose ‘big ticket’ purchases are essential to maintain the appearance of a booming economy, the markets will be further distorted, and the gap between rich and poor will be exacerbated.
At least someone in charge has admitted what has been happening for several years now. How are current policies going to reverse this trend, and get everyone on Island to enjoy the benefits from our premier industry? After all, that is what Government is for.
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