WHILE making predictions for a new year is always a fraught exercise, there is one thing that can be said with certainty: 2010 will be a challenging time for Guernsey, its people and its elected representatives.

The economic climate, uncertainty over the island’s basis of taxation, a structural deficit and the States unwillingness to live within its means and tackle its public sector pensions time-bomb… and that’s before looking at issues of the environment, population demographics and external influences on the island’s autonomy.

There are many other domestic and international difficulties also to be grasped at a time when the island’s main trade partner, the UK, is facing its AAA credit rating being downgraded because of concerns about the way it plans to reduce its own debts, combined with a general election and anticipated change of government.

Historically, Guernsey’s strength is weathering storms and its own economic performance and the rising prosperity of islanders over the last 40 years have been particularly impressive.

Individuals will have their own views on whether that was due to luck, good government or a combination of the two but what can also be said with certainty is that government as a whole has never before been so removed from or lacking in understanding of the main driver of that prosperity, the finance sector.

Of itself, that might not matter. With Commerce and Employment and Treasury and their advisers ‘minding the shop’ all would probably be well – apart from deputies’ enthusiasm for pitching into areas that are not naturally their specialism.

A case in point was the willingness of some members to amend the GuernseyFinance funding strategy, which had been agreed between the States own representatives and the industry itself.

Members need to be independently minded but perhaps the biggest challenge for Guernsey is how they choose to exercise that in 2010.

So many issues become a fight to the death with deputies unwilling to give ground on points of principle or belief.

Yet what can also be predicted is that the island will have to take a pragmatic view if it is to weather the next 12 months.

In turn, all of us will have to be prepared to compromise for the greater benefit of Guernsey if 2010 is, after all, to be a happy new year.