A view of the IOM from Jersey
Here’s an excerpt from an interesting article here .
It doesn’t seem fair, really. Here we are with the biggest and most successful finance industry of all three Crown Dependencies, and it looks like we are the only one about to go into recession. That’s if we’re not there already.
The Isle of Man, which some of us have looked down on for years, is predicting that its economy will grow by about 2.5% this year. Even Guernsey, with its deep financial problems, is expecting the economy to just about stand still this year or, at worst, suffer ‘a slight contraction’, according to last week’s Budget.
In contrast, the economists are even more confident than they were earlier in the year that Jersey’s economy will shrink by between four and six per cent in 2009. That’s despite the increasing buoyancy and signs of growth in virtually every other country surrounding us.
It is doubly unfair, of course, that our economy appears so weak when we are also the only Crown Dependency not to have suffered from the collapse of an Icelandic bank…
Perhaps an even more telling comparison for Jersey is with the other Crown Dependency. The Isle of Man has long been a competitor of Jersey’s in financial services but has never developed the strength or depth of Jersey’s finance sector. So where is the Isle of Man’s 2.5 per cent growth coming from this year, while we watch our economy shrink by at least four per cent?
The basic reason is that the Manx economy is much more diversified than Jersey’s. While Jersey observers have tended to laugh at the Isle of Man’s efforts to develop a space industry, for example, this currently contributes about £25m a year to the economy. Manufacturing employs 3,000 people (the population is now very similar in size to Jersey’s), e-gaming is growing substantially (while Jersey continues to talk about it) and 1,000 ships and 150 aircraft are registered in the Isle of Man (something else that Jersey talks about).
Growth in these areas has produced a much more balanced economy, with the proportion of the economy coming from financial services, down from 45% to 36%. Jersey’s is still over 50%, and some observers believe that the Island is even more reliant than that on the finance sector. So it’s not surprising that the performance of one dominant industry affects the performance of the whole economy.
So I’m not sure what we can learn from Guernsey’s experiences in fending off the recession, except perhaps to emphasis the need to take full advantage of our strengths in addition to bemoaning our weaknesses. But it’s pretty obvious what we can learn from the Isle of Man.