Saturday, November 20, 2010

On Guernsey's population control

Reading yesterday's Financial Times, I found the insert describing how the Channel Island of Guernsey with its financial sector was coping with the global financial crisis interesting. (It's doing well, apparently.) My curiosity was piqued by a passing mention that Guernsey had an official policy of limiting population. What, I wondered, was up with that?

Guernsey is an island with a land area of 78 square kilometres. As of March 2009, Guernsey (according to the government's 2009 Population Bulletin) had a total population of 62 274 people. Until recently, Guernsey's population history was one of slow growth (doubling from twenty to forty thousand from 1821 to 1901) followed by periods of decline and slow growth (growing from forty to forty-five thousand between 1901 and 1961). Migration tended to be emigration, nearly four thousand Channel Islanders settling in New Zealand in the late 19th century, for instance. With an economy historically dependent on agriculture, fishing, and long-distance trade, there was relatively little reason for anyone to stay and any number of pathways to leave.

This changed in the post-war era when Guernsey's government, like the government of Jersey and the other Channel Islands, began to promote the island as an off-shore financial sector. This succeeded enormously, making the island prosperous, with barely any unemployment and a history of sustained growth that has made this microstate one of the richest entities in the world. Guernsey's comparative advantage remains there, with things like online gambling and forays into information technology being promoted for alternatives, tourism and the primary sector declining (Guernsey retains a more diversified economy than Jersey, mind). This prosperity attracted immigrants, both people with professional skills and people wanting to take advantage of other areas of the labour market. Guernsey's age pyramid shows a decided imbalance towards men in the younger age groups.

The problem with immigration, as seen from the Guernsey perspective, is that Guernsey is already very densely populated. An increased population would impact negatively, it seems, on their perceived quality of life.

On one side of the argument are those islanders – I suspect they’re a big majority – who feel the island is already rather overcrowded. It’s not an issue of misanthropy or xenophobia but rather just a natural desire to live in a place with a bit of breathing space. Most islanders don’t want to become urban dwellers. Not even in an up market, city-state, surrounded by pretty bays and beautiful seascapes. The vision of Guernsey as “Hong Kong dans la Manches” is a nightmare for most locals and settlers alike.

Every time a few hundred more residents are added to the population it inevitably impacts on quality of life in the island. Not because the incomers aren’t thoroughly good sorts but just because its means more cars on our limited road system and more homes in a community where open space is already at a premium. It also puts more stress on our infrastructure – more water and electricity to be supplied, more educational and healthcare needs, not forgetting more rubbish to be disposed of.

So there is a strong qualitative case for ending Guernsey’s historic trend of steady population growth which has gone on unabated, bar a couple of blips, since the island’s first census in 1821 showed a population of just 20,302. The $64,000 question is how?

The key element to date in Guernsey's population control strategy is to strictly regulate housing. Most housing on the island is strictly licensed, and migrants fall into two categories, those who have essential skills and can settle with their families for extended periods of time, and those who don't.

Is it working? Slow population growth is continuing notwithstanding these regulations, and--perhaps--a shift away from traditional sectors of the economy like horticulture dependent on unskilled workers. The restricted talent pool, is making many businesses favour greater flexibility--the Chamber of Commerce would like to see more flexibility, growth or (less likely) decline of up to 10%. The aging of Guernsey's population, meanwhile, will create more problems.

[Consultant Greg] Yeoman said forecasts had predicted that by 2040, the number of people aged 65-84 would have nearly doubled and that those aged over 85 would have gone up by 150%, meaning the island’s dependency ratio will have increased by 64% from 0.48 to 0.79.

‘There will be an insufficient labour pool to support diverse business growth,’ said Mr Yeoman.

‘People are struggling to fill these positions now, so imagine how much harder it will be if we have 7,000 fewer in our working population.’

He said the offshoot of this would be hugely problematic, with an explosion in the cost of providing health and social care and the unsustainability of the States pension given as just two examples.

Based on my own personal and other history with small islands, I'm used to the idea that emigration is the major problem. Coming up against Guernsey with the reverse was a thought-provoking experience.

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