Open mike: The loss of international business

Another chance to talk about a subject of your choice.

First comment sets the topic for debate. If you ask a question, please provide your own answer too, even if it's in a subsequent comment. And if you've been lucky enough to set the subject in a recent open mike, please give someone else a chance to do so this time.

» J Galt asks: "Do you think Bermuda could survive if the international business sector were to relocate? How do you think it would affect the quality of life for the average Bermudian?"

Comments

[J Galt on 29.11.05 at 08:38]

Do you think Bermuda could survive if the international business sector were to relocate? How do you think it would affect the quality of life for the average Bermudian?

[loki on 29.11.05 at 08:41]

Could it survive? Yes, but only in the way that places such as Jamaica and the Dominican Republic 'survive'. Bermuda has two basic industries: international business and tourism, but with tourism having disappeared down the toilet, so to speak, Bermuda is essentially dependent upon international business for revenue.

[Yet Another Limey on 29.11.05 at 09:00]

Yes, but Bermudians would have to readjust to a poorer lifestyle and sucking up to tourists.

At least the rent will be cheaper.

[sandgrownan on 29.11.05 at 09:07]

8,000 or so expats would leave, probably as many Bermudians too. Rental prices would collapse overnight (good for the average Bermudian), but so would property values leaving many in a negative equity situation with lower rental incomes. Goods will cost the same to be shipped ot the island but disposable income would be much lower. Half a dozen restaurants and shops might close. There would be a glut of office space too, driving those that invested in them to the wall. BMW's and Luis Vitton luggage would appear on e-moo at knock down prices.

It's hard to really understand without deeper analysis, Bermuda would survive but not as we know it. It would essentially be, to use a crude term, fucked.

[wklc on 29.11.05 at 09:12]

There would definitely be a downward turn in many Bermudians lives. That is from a financial standpoint. But from a cultural standpoint, many Bermudians feel unattached to the prosperity that we have received from international business...there lives haven't necessarily benefited (for various reasons), so they wouldn't care one way or the other. Bermuda, under international business, has pretty much priced most bermudians out of the market, and there are bermudians that wouldn't mind the whole international business economy crashing, so that they could have at least a slight chance of owning something in their own country...my hope is that international busines continues to do well in bermuda but that bermudians (the average common citizen) can manage a way to live a decent life in our own country.

[Tiger Bay on 29.11.05 at 09:15]

Any sizeable reduction in IB would be very hard on the already stressed middle class. This in turn could destabilise at least two of the local banks, as homeowners began to default on those 95 percent mortgages.

[sandgrownan on 29.11.05 at 09:22]

wklc - "there are bermudians that wouldn't mind the whole international business economy crashing, so that they could have at least a slight chance of owning something in their own country."

Who wouldn't agree with that.. but how are they going to pay for the property, albeit at lower prices?

The answer is education. It always is...the more qualified Bermudians there are, the less expats you need. You will never eliminate the guest worker, but you could reduce their numbers in professional positions. Legislation such as tighter immigration and work permit policies won't do it either, educate the masses.

[wklc on 29.11.05 at 09:25]

sandgrowman,

I agree with your view...I was just saying that there is an element out there that is totally disattached and disaffected. They see a certain segment of society prospering, but they do not see any opportunities for themselves.

I even know of many people, single and married that work within international business, and can't even afford a house. So it is getting to the point of being unsustainable. And its kinda scary, really.

[Combat Banker on 29.11.05 at 09:27]

Precisely Tiger,

That would mean that even those Bermudians who would be 'fortunate' in this situation to not own property, would have their life savings wiped out, as the Banks went into default.

So should we stuff our matresses with our savings instead? No. Without a positive balance of payments to the Bermudian economy (without IB it would be negative), the smoke & mirrors 'arrangement' that pegs the Bermuda Dollar to the US Dollar, would no longer exist. The value of the BMD would likely collapse, meaning we could no longer afford most goods produced abroad (ie just everything).

[Bandit on 29.11.05 at 09:31]

Yes, but it would be a very different Bermuda. The way I see it is tourism is still hanging on but basically dead. As soon as a few international businesses started to pull out tourism would die straight away.

I now live on the Isle of Man, where tourism also used to be king. The IOM is now mainly financed by offshore business that is continually under threat, so we are continually re-inventing ourselves to attract different areas of income. Tourism is on the up again due to niche marketing and events. IOM's shipping and mega yacht registry is on the up and certain other industries are booming, but it is a struggle and takes continual re-invention.

I don't see Bermuda doing this. All it would take is a "harmful" directive or two from Europe and Bermuda will be sunk.

[Onion on 29.11.05 at 09:32]

What we need to be concerned about is the fact that we have 11 new companies setting up in Bermuda. Much of the housing crisis we have experienced in Bermuda is due to the post 9/11 boom in reinsurance. We are about to experience a similar boom. Whilst I agree we cannot survive without IB, I do not believe we can withstand what is about to hit us. The island simply cannot cope. There will be more rental hikes, greater traffic congestion and pollution, and more competition to get your child in a decent school. Already the existing companies are pumping hundreds of thousands of dollars into private schools in the hopes that they can reserve spots for their executives so they won't be poached. Born Bermudian children right now are being overlooked to get into some schools because ACE, XL or RenRe donated money to the school to reserve spots for thier child. This practice is not publicized but it happens. This of course will continue to breed resentment.

In short, we need international business, but we need to properly contain it and manage it or it will destroy this country.

[Combat Banker on 29.11.05 at 09:37]

Onion that's a good pointabout the new Class 4s. The best way to solve this, once again, is to get more Bermudians in on the industry. To do this we need to encourage as many Bermudians as possible to get into college, and come back employable in the IB sector. That will keep the longterm wealth HERE, in our own hands. To do this, an entire cultural shift must take place in our society to make it "OK" to be educated. Parents, local leaders, & ultimately kids & their peers must be sold on the idea.

[Denis on 29.11.05 at 09:44]

A good question.

Looking at other countries who have collapsed in similar ways it is hard to not wonder what would result.

With Bermuda's tourism market being unable to compete with other discount destinations (our peak season is their off season and vice versa), tourism would be an unreliable source of income.

With the pull out of international business the Bermudian economy would surely collapse and the dollar would likely no longer hold any value as people would sell their homes and pull out for a small fraction of what they're worth now.

Youth of Bermuda would go from having nice things and few prospects for the future to having nothing and no hope. Sure you could buy fancy things on e-moo, but the future would result in no new things coming to the island. 30 years from now we'd still have the same bmws and flashy cars, rusted out. Just look at Lebanon after the civil war - they've got lots of fancy cars - but all from 30 years ago and most rusted away.

Bermuda cannot sustain itself and likely food and other supplies would continue to have to be shipped in. We've fished ourselves dry and no more land is left with which to grow much to survive.

The average Bermudian in this state could not contribute enough to the world economy as we have no real exports. Thus the cost of even eating would be a high price to pay compared to income.

Unrest would likely follow as many lose hope and turn to drugs and crime. We'd see outsiders turn away from seeing Bermuda as a safe tourist destination and even if we could regain the friendlyness that one made our tourism great, it would only occur out of sheer desperation and likely put a scar on our islands name that'll take a long time to heal away.

Like other collapsed carribean nations, for example the Bahamas, we would likely be forced to open up to casinos as our savior source of income as we turn to take on the "sinners" of other nations. What religious people now work so hard to prevent they will turn tail and welcome with open arms.

Really Bermuda just needs change. We need to accept the fact that the world around us is changing and we can too. Investing in housing such as affordable apartment buildings would take strain off the markets as many these days are struggle just to find somewhere affordable to live, let alone a home of their own. We need to go up to take the strain off our nation.

Some may believe they would rather expats leave but I for one think we could instead have a balance of prosperity. We just need to THINK and cooperate, rather then bicker and fight over our history.

If we go independant and the IB market collapses, we will keep many youth from being able to escape and we will be forced to share the bed our elders have made.

The rest of us who are able will run as their will be no future worth living here in Bermuda. So many who survive only on pensions will watch as they dry up and become truly poverish. Whether to own our own homes or not, we've gone too far now to turn back for we can no longer sustain.

Some may wish it, but once things change for the worse, there is no going back. Our own policies of Bermudian's owning everything will come to haunt us as foreigners easily liquidate. Bermudians with any money will hang on to what they can if they can't escape and the Bermudians now rich may have less money, but the divide will only grow or remain the same.

Is this really the future you want for you and me? I don't.

[novote on 29.11.05 at 09:45]

What you are describing is a severe recession. There are plenty of examples in history of countries experiencing these types of event (including Bermuda) for all sorts of different reasons.

The consequences typically include: high unemployment, defaults on loans, negative equity,devaluation of property, increased levels of crime, flight of capital (financial and human). Bermuda would be no different.

Generally, the citizens of countries that have experienced this would not welcome it again.

Invariably countries do 'survive', as human beings are resourceful. The economy would eventually restructure around some other industry or industries.

However, in the interim there would be a lot of angst and suffering for the community, and in all probability Bermuda would not return to the levels of economic prosperity enjoyed currently with the third highest per capita income in the world.

Sometimes a recession can befall a country as a result of factors beyond its control. Sometimes it's a result of poor government and the pursuit of agendas that compromise the foundations of the economy.

I know which I'm most worried about in Bermuda.

[Walla on 29.11.05 at 09:49]

The ramifications would be devastating, i completely agree.

WKCL - These people that you mention, who don't appreciate/benefit from international business, Do they not realise how much money these companies and their employees (bermudian/non-bermudian) pump into our economy? I am thinking in terms of having their houses painted, buying lunch, renting movies etc.

The knock on effect would inevitably hurt everyone.

However, i beleive that every situation presents opportunity. Some could prosper...

[Guilden M. Gilbert, Jr. on 29.11.05 at 09:52]

Denis,

"Like other collapsed carribean nations, for example the Bahamas..."

Please explain this. Clearly you know nothing about the Bahamas. I would suggest you check your facts before you post your comments.

[Denis on 29.11.05 at 09:57]

Perhaps I am wrong but has Bahamas not turned to gambling to sustain and regrow their tourism?

Are they not considering joining the WTO and as a requirement turning around to drop their duty based tax system to implement an income tax based one?

The largest hotel/casino in the caribbean, "Atlantis", was built after gambling was brought to the Bahamas as an attempt to revitalize their tourism.

Perhaps we're not a matched model, but without international business what exports do we really have? In small ways we have similarities with many islands. Perhaps I generalize too much without specific examples and for that I apologize. I simply try to keep my posts short.

We have very little to offer the rest of the world in any other fashion. What do you suggest we have to offer?

[Onion on 29.11.05 at 10:01]

Combat Banker,

Good point, but the reality is that many Bermudians are getting the education but are choosing not to come back to Bermuda. Or they come for a few years and decide to leave. The question many are asking themselves is "Why bother come back to a country where we are not valued in the IB sector, where we cannot afford a house and we struggle to make ends meet, despite our educated and professional status?" I know of some who have chosen to go to Florida, Atlanta or Canada where they do secure top jobs, send their kids to good schools and afford a 5 bedroom house. Many in this generation of Bermudians are tired of always being told that they must owe their very life to expats and international business, even though they rarely get to share in the spoils. They are tired of being told, "just be happy with your lot because you could end up like "Jamaica" or some other foolishness. They are leaving to pursue their dreams elsewhere and many are achieving them.

If things continue, my bet is that there will be a brain drain of professional Bermudians. There will be a severe class distinction left in Bermuda with a ruling class of wealthy expat/status Bermudians with a sprinkling original old Bermuda families holding the fort. The underclass will be the product of public schools who have limited options and do not give a DAMN about IB.

[Onion on 29.11.05 at 10:11]

Let me add that many are going to the Caribbean as well to make a life for themselves and are doing well.

[NoVote on 29.11.05 at 10:15]

I am by no means an expert on the Bahamas. However, I have visited Freeport and Nassau a few times recently both on personal and business travel. My impression is of an economy on the up.

However, the Bahamas did suffer a significant economic downturn following its own independence, as some of its own international business sector departed and start-ups chose other jurisdictions.

I am not familiar with all of the specific reasons for this, and am not necessarily suggesting that they would apply in Bermuda. My sources were discussions with a few local business men, who described what happened as they saw it.

My understanding is that the Bahamas was once the jewel of the Carribean (much as Bermuda is now - albeit not technically in the Carribean).

Despite the economic growth that the Bahamas experiencing now, when I consider the standard of living that I observed in Nassau (and New Providence more generally) with that in Bermuda I know which I would take: Bermuda everytime.

It appears to me that the Bahamas is coming through the other side of an economic restructuring similar to that which I noted in my earlier post.

Only time will tell whether it is able to restore the economic prosperity of old.

[Tiger Bay on 29.11.05 at 10:16]

Onion, you say tomato, I say tomahto.

The experience of many in the Bermudian diaspora is slightly different. Many of us marry overseas spouses for whom Bermuda is not a good fit (the xenophobia directed towards SOBs is noxious). Also, the scope of jobs here is limited - the best opportunities are as lawyers and accountants, which is not the gig for everyone. Others see the non-responsive and disconnected government as an issue. Others just like the freedom of living in a bigger society. But none of this is new - the same issues existed 100 years ago.

The onus is on Bermuda/business to find those who wish to come back and cultivate them - much as HSBC did with Phil Butterfield.

I agree with your second point; if Bermuda had economic problems, the educated and mobile Bermudian executive class would emigrate at least temporarily.

[Guilden M. Gilbert, Jr. on 29.11.05 at 10:18]

Denis,

"Perhaps I am wrong but has Bahamas not turned to gambling to sustain and regrow their tourism?"

Not perhaps, your are wrong. Casinos existed in the Bahamas long before Atlantis. When Sol Kerzner bought Resorts International from Merv Griffin in the late 80's there was already a casino on the property just as there was a casino on the Cable Beach strip.

The Bahamas tourist trade is not built around casinos, casinos just happen to be one product within the tourist industry. The first casino in the Bahamas opened in 1920 and The Bahamas Gaming Board was established in 1969.

While most of the 5 million tourist that visit the Bahamas stay in Nassau, there are 34 other inhabited islands and outside of Nassau and Freeport, there are currently no casinos.

I can tell you that during the daylight hours the casinos are like ghost towns.

Casinos do help with government revenue, some $23 million each year for the Bahamas Government.

"Are they not considering joining the WTO and as a requirement turning around to drop their duty based tax system to implement an income tax based one?"

The Bahamas currently has observer status in the WTO and there some discussion on joining WTO just as there are discussions on joining FTAA and CSME (although most Bahamians seem agressively agains the latter) but any agreement is a long, long way off and no, there has been no talk of implementing an income tax structure.

Rather than attempt to rely hearsay, I would suggest that you get factual information. I have enjoyed your posts and many of them I agree with but please do not get caught up in what many would wish you to believe about the Bahamas.

[Combat Banker on 29.11.05 at 10:20]

Yes, and thus begins the revolution Onion....

We need to ask ourselves why educated Bermudians are not coming back. I FULLY understand the lack of respect, intended or otherwise, a Bermudian recieves in the IB intustry here. It is amazing how attitudes change when people finally realise I'm a local (their mental estimate of my IQ goes down by 50 pts). The idea being that I am 'only' there so someone else has a work permit.

But why is that? Pehaps it is something they have come to expect from experience? We need to face the reality that without as many locals returning fromn college it reinforces this stereotype, creating a vicous circle. They only way we can turn this around is to prove them wrong, which personally I try to do everyday. Tip it from vicious to virtuous, one irate NY cousin at a time.

Secondly on the housing issue: yeah, damn it is expensive. But it's not an unsolvable problem I think. I think John Swan had the right idea, but the wrong frinkin' price point! We must revitalize Hamilton as a place to live, and then allow certain areas to build, classy, high rise apts, that middle class IB professionals would like to live in. Flood the real estate market with supply & bring down the cost of housing. As a home owner (soon I hope) this would hurt me and others financially, but no where near as much as the entire industry becoming unfeasible for locals & internationals (leading to a pull out or 'revolution' at the extremes).

Few ideas anyway. I still think its a problem that can be worked. We are only an island of 65,000 people & 25 sq miles. It CAN be done if we believe and try hard enough.

[NoVote on 29.11.05 at 10:21]

Onion - you're right that many Bermudians are leaving and prospering elsewhere. I would point out though that many are prospering, in part because they are taking with them wealth that has been amassed in Bermuda and which buys them much more in real terms elsewhere than it can here. This has been on the back of Bermuda's economic success.

Had they not been able to take their chunk of Bermuda's prosperity with them, then the story might be quite different.

[Onion on 29.11.05 at 10:23]

TB, would you not agree that the issue of affordable housing is more of a factor now than it has ever been in our history? I know a married couple, doctor and lawyer, who are struggling to buy a house. Where else in the world does this happen?

I agree about the xenophobia thing. Years of resentment back and forth make the innocent suffer, on both sides of the equation.

[Denis on 29.11.05 at 10:24]

NoVote,

Thanks for the update, I certainly am no expert on the Bahamas either and mostly rely on hearsay from people who have been there and lived through it as you do.

My intention was only to suggest that we consider other nations who have taken similar approaches and see the similiarities for what they are.

Guilden,

Seeing as I know nothing and you seem to know much more about the Bahamas then I, I would welcome your commentary on the island from your point of view. How have they prospered since independance and what can we learn from them of their successes and failures to plan our own course?

I certainly am not educated on the history of caribbean nations and would never go so far as to claim otherwise.

An open discussion is appreciated so we can learn the most from what has happened in other nations.

[Guilden M. Gilbert, Jr. on 29.11.05 at 10:25]

No Vote,

"However, the Bahamas did suffer a significant economic downturn following its own independence, as some of its own international business sector departed and start-ups chose other jurisdictions."

You have to understand the history behind that downturn. Post-Indpendence the government determined that the international business sector was not giving Bahamians a fair shake at advancement an din the interest of building an economy with significant Bahamian input the government took action that was not very well accepted by many in the international business environment. Work permits were not renewed and many were cancelled. These actions caused the flight of many international business companies.

To cut a long story short, in hindsight, Sir Lynden Pindling had 20/20 vision. Today there are Bahamians for th emost part running the IB operations here. Butterfield Bank, as an example, does not have a single expat within its operations here. Bahamians hold the key positions. So while his idea may not have been popular at the time, the steps taken by Sir Lynden did afford opportunities for Bahamians.

[NoVote on 29.11.05 at 10:37]

Guilden,

For the record I have repeated below the paragraph that followed immediately after that which you quoted from my earlier post:

"I am not familiar with all of the specific reasons for this, and am not necessarily suggesting that they would apply in Bermuda. My sources were discussions with a few local business men, who described what happened as they saw it."

It is useful to hear the reasons behind the Bahamian IB downturn though, and Bermuda might learn something from it.

As for your value judegment on 20/20 vision, I think that's debatable and depends upon each individual's circumstances.

Those Bermudians already in the IB sector might prefer not to have their careers interrupted by a 20 year hiatus. Those that aren't in it already might see things differently.

[denis on 29.11.05 at 10:39]

Guilden,

Am I understanding you right that the educated Bahamians left Bahamas to come work in Bermuda?

Going independant afforded Bahamians opportunities, just not in the Bahamas?

Would similar not happen to educated Bermudians and is that ultimately what is seen as prosperous for Bermudians?

For those like me who are young and would like a future in Bermuda rather then having to relocate to another country that I can't call my home?

[Guilden M. Gilbert, Jr. on 29.11.05 at 10:47]

No Vote,

Please do not misinterpret my comments. I have never, nor would I suggest that Bermuda follow the immigration road that the Bahamas took. I believe that any educated Bermudian with internal drive and a desire to succeed can do so in Bermuda. The situation in the Bahamas in 1973 was vastly different than it is in Bermuda.

Denis,

"Am I understanding you right that the educated Bahamians left Bahamas to come work in Bermuda?"

No, your understanding is not correct. Where did you get that impression? I said nothing about Bermuda or any other country outside the Bahamas. I said work permits were non-renewed and some were cancelled. I was referring to expats not Bahamians.

Perhaps you are confusing my comments with those of Onion who mentioned Bermudians leaving Bermuda.

When I referred to Butterfield Bank I was referring to a bank and trust company and a fund services company its owns here in the Bahamas. There are no expats on staff, 100% of the staff is Bahamian.

[Guilden M. Gilbert, Jr. on 29.11.05 at 10:51]

No Vote,

"As for your value judegment on 20/20 vision, I think that's debatable and depends upon each individual's circumstances."

Sure there may have been Bahamians who disagreed with the governments actions but today there are very few. It is the impact on the overall economy that leads to the 20/20 vision I mentioned.

If most senior management positions in the Bahamas, international business and otherwise are held by Bahamians the only compaints from from individuals may be that because there are Bahamians in these positions younger Bahamians may have to wait until the current management staff retire in order to move to that level. I do not necessarily think that is a bad thing, Bahamians competing against Bahamians for jobs.

[denis on 29.11.05 at 10:59]

Guilden,

I see now, I believe I confused "Butterfield Bank" with "Bank of Butterfield" as I thought you meant the bank here in Bermuda hired Bahamians.

Thanks for the correction and sorry for the confusion

Denis

[Onion on 29.11.05 at 11:13]

"Is it likely we will see the same rise in drug trafficing and money laundering here during our course of going independant?

Denis"

Denis, how does independence increase drug trafficking? Do you think our colonial status magicaly wards off evil?

[Guilden M. Gilbert, Jr. on 29.11.05 at 11:19]

Denis,

Has and does drug trafficing occur within the waters of the Bahamas? Yes, it is actually ideally laid out for the transhipment of drugs. By the way the drugs do not eminate from the Bahamas, nor do they remain in the Bahamas.

When you have 700 islands and cays (keys) stretching from South Florida to Cuba there is a created a situation that is very difficult to police. There is only so much water the Bahamas Defense Force can monitor. The U.S. agencies were once heavily involved in the management of these waters but expense cuts removed that support. During this time the drug trade suffered tremendously and many traffickers were apprehended.

Have Bahamians been involved in this trafficking, of course, when there are millions of dollars to be made some people will fall into the trap. However, right now the largest drug traffickers are sitting in prison awaiting extridition to the U.S. to face charges. So the drug trade, while it still exist, now has been slowed tremendouly.

The reality is that as long as there is a heavy demand for drugs within the U.S. there will be a supply.

Sir Lyden Pindling was never tried fro drug trafficking nor was there ever any evidence that he had any involvement whatsoever in the trade. As far as his son, whom I know fairly well, there has never been any rumours that I have ever heard about his alleged involvement. He is a respected member of the Bahamas Bar Association as far as I am aware.

However, I cannot vouch for the actions and affairs of anyone but myself.

Just out of curiosity, why would you think drug trafficking and independence are related? Bermuda has never been shown to be a transhipment point for drugs. There is a high level of drug use in Bermuda and as the drugs entering Bermuda are for domestic use.

Money laundering comes down to legislation and the enforcement of such legislation. Here in the Bahamas today in order to open a bank account you have to disclose your life story. It is very cumbersome as there are very stringent laws in place to prevent and deter money laundering.

With that, if one wanted to launder money, whether in The Bahamas, Bermuda or anywhere else, once there is a will there is a way.

[Combat Banker on 29.11.05 at 11:19]

That would be nice! "The power of QEII compells you!" No Onion I think he was just referring to the downturn in the Bahamian economy that followed contributing to, shall we say, an increase in "alternate" industry.

[Denis on 29.11.05 at 11:21]

Onion,

Certainly not, however a downturn in the economy would likely increase demand for drugs here on the island as people lose hope and turn to cheaper forms of enjoyment.

I was asking IF it would happen that we could end up turning to drug trafficing and money laundering, not stating it would. It could certainly also happen if we don't go independant, it all depends on corruption of the gov in power more then anything doesn't it?

Have other caribbean islands who have gone independant seen a rise in drug trafficing and trade? I don't know. This is why I'm asking Guilden as he seems to have more knowledge of the Bahamas then I do.

This thread is all about what will happen if the business sector relocates. If we have no other source of income I could see more willingness by people who already have criminal records to consider running drugs for the profit potential alone should there be no alternative?

Is this realistic? I have no idea... This is why I'd like to know, so those out there who know more can tell me and I can be more informed.

[Combat Banker on 29.11.05 at 11:27]

Considering our history of running arms to the South during the US Civil War, and Booze during Prohibition, would not turning to Drug Running during a recession be returning to our Nationalistic roots? Perhaps we should make it part of the Quinncentenial Celebration.

[Denis on 29.11.05 at 11:27]

Onion and Guilden,

I was not trying to link drug trafficing directly with going independant.

However I would consider that going independant without a clear plan could likely serve as a trigger for IB to leave, however this could happen regardless of independance.

I should have more so stated that in other jurisdictions that have experienced a recession and downturn of their economy: has their been a spark or rise in drug trafficking.

Guilden effectively answered my question in regards to the Bahamas. I simply googled the Premier he mentioned to do some research to be more informed as Guilden had suggested and came up with links to drug trafficing accusations and wanted to hear more from his point of view.

I have no clue if Bermuda would even serve as a good spot for trafficing - are there examples of other similar islands where that has been the case?

[Ethiops on 29.11.05 at 11:39]

IB has allowed many to blindly rest on their laurels while the rest of the population that’s so desperately dependent on tourism found ways to adjust. Taking the bull by the horns may be simple but it sure won’t be easy. Negligence, complacency, unwillingness, and lack of the gift of desperation! These imo will keep the much needed work we need to do at bay. We are The Islands of Bermuda, we are a beautiful people that live on a beautiful island. The moment we can find a way to stop overpricing ourselves and lax a few laws its logic that we will be a destination of interest. The name Bermuda still rings in people’s ears. However they can’t help us to swallow our pride and clean house.

[SmokingGun on 29.11.05 at 11:46]

Will Bermuda collapse if IB left? Not at all. We would simply change tack and become the biggest Casino & Poker Palace off the east coast of the good ol' USA. When the houses and the BMW's have to be paid for it's easy to turn a blind eye to all the downside's associated with gambling.

[J Galt on 29.11.05 at 12:25]

"We would simply change tack and become the biggest Casino & Poker Palace off the east coast of the good ol' USA."

I think that train has already left the track

http://www.newsday.com/news/local/wire/newyork/ny-bc-ny--casinogambling1128nov28,0,6184736.story?coll=ny-region-apnewyork

[BW on 29.11.05 at 12:33]

SG I suspect you are correct. Even the church will turn a blind eye when they cant buy their fancy cars, clothes, and other luxuries anymore.

[SmokingGun on 29.11.05 at 12:37]

JG - Glad you agree.... All Aboard the Sky-Train to Las Bermudas!!

[silencedogood on 29.11.05 at 12:48]

Insurance, reinsurance, and financial companies vanish.

The island will see a significant reduction in the number of law firms, advertising firms, printing firms, construction companies in bermuda.

Infrastructure companies will consolidate, monopolize, or fail. 1 cellular company will exist. 1 internet company. 1 cable. Prices will rise.

Retail businesses will rebound because fewer people travel off island. Grocery store owners will experience an increase in their relative wealth by retaining present pricing or even reducing it slightly.

Duty collected will drastically reduce which may prompt government to implement additional taxes including direct taxes (income). Government will extend its powers and will consider nationalizing various industries. Regardless of whether government nationalizes industries, political connections will eclipse education and power over the economy will shift from private industry to the government.

Services will improve in the short-run while unions strengthen to protect workers. Once union workers are secure, services will decline.

Civil unrest may result from the large numbers of unemployed individuals who cannot pay their mortgages on their home. Landlords with mortgages will have their property repossesed without high paying expats living in their units. Landlords with paid mortgages will experience a decline in property value and cash flow until tourism revives.

Those with foriegn investments will be unaffected and will feel wealthier than before due to increased purchasing power. Those whose main investment is their home or whose investments are valued only in bermuda dollars (i.e. bermuda stocks) will likely be bankrupted when the island can no longer support a 1:1 US currency peg.

Organized crime, drugs or otherwise, will be likely to increase due to the number of intelligent, unemployed individuals with bills to pay and mouths to feed who become increasingly desparate.

Banks will become major landowners on the island bringing them under fire from government. Government may relieve the debts by assuming them or providing assistance(definitely requiring increased taxes) or it may attempt to legislate debt forgiveness without payment causing interest rates to skyrocket and limiting available credit.

The juicy local scholarships presently available (and often awarded for sub-par academic credentials)will disappear. Most charities, who rely on IB as a major source of funding, will disappear.

The population of the island will significanly decrease. Almost all expats leave. Bermudians in executive positions will also be likely to leave. Middle class bermudians will split on leaving and staying--would probably depend on their credentials, experience and industry. Poor bermudians will experience a decline in their standard of living but will still be poor.

Commercial fishermen will be secure and may benefit. Fish stocks may be overexploited.

Tourism will not immediately reappear as a major source of income. After a readjustment period, long enough for those young bermudians previously bound for IB to replace present tourism workers, the quality and service of Bermuda tourism will improve. Lower standards of living in bermuda will equal lower wages, lower costs making a bermuda vacation easier to afford for US families.

Those not succeeding under the current economy will slide further into economic stagnation.

Bermuda's historical success is precisely due to its participation in the global economy (piracy, blockade running, ship building, tourism, insurance, etc., etc.)

Bermuda will not disappear upon the mass exodous of IB, but its middle class and widespread economic propserity will.

I find the blindness of those who typically go on anti-IB, anti-expat rants ridiculous. Both groups may be associated with problems but their presence solves more than it causes. A rising tide lifts all boats.

[Bill Cook on 29.11.05 at 12:51]

Galt,

If IB located elsewhere it would still require key people so I would make myself as valuable by competence in it to be employed by it wherever it relocated.

The truth is that with such little willingness by so many to get any education of value due to lack of interest and pure laziness (according to a long time teacher) there is no real chance of getting employed by IB

We tend to think in local terms when in fact the world has changed and competetion is global and at present we are by and large education ways not competetive and are fortunate that we are as protected as we are by our strict employment laws.

If we had to compete on an open market with say India for example it would be no contest due to the level of education there in my opinion.

There are a variety of reasons why our college grads dont come home but many find it too small both in size and outlook plus the ongoing racial divide etc. some marry away, some are adventurous etc.

One thing is certain is that unless we produce many more better educated graduates we will not sustain IB without importing workers.

Just who is responsible for acheiving that ?

Well I have already covered that elsewhere and its time to face reality.

I thought it terribly funny that workers and others from Bermuda were criticised for taking their savings out of Bermuda, as they made that money by taking advantage of the boom in Bermuda, that was just mind boggling !

Many seniors are selling their homes to live abroad because it means a better quality of life with better services and food and medical facilities and a more pleasant climate too.

Many older folk hate summer here as the high temperature and humidity saps what little energy they have left.

[Guilden M. Gilbert, Jr. on 29.11.05 at 12:53]

Instead of being so concerned abotu what would happen IF international business left Bermuda, should the focus not be on diversifying the economy so that it is less and less reliant on international business?

[Onion on 29.11.05 at 12:58]

Silncedogood,

I don't know anyone that is against IB. I certainly am not. I am, however, against prostituting ourselves to IB without any checks and balances in place to contain over development. Many of the negative things which you have cited above will also happen if we just allow 100s of companies to come to Bermuda without a sustainable development plan in place. Just like with tourism we cannot simply allow dozens of cruise ships to come to our shores. Our island cannot contain it.

[Bandit on 29.11.05 at 13:01]

Exactly my point Guilden. Diversify now before it is too late.

[loki on 29.11.05 at 13:08]

"Instead of being so concerned abotu what would happen IF international business left Bermuda, should the focus not be on diversifying the economy so that it is less and less reliant on international business?"

Yes, absolutely. It's amazing how Bermuda is collectively content to allow IB to be an overwhelmingly dominant source of revenue. Unfortunately, Bermuda and, specifically, Bermudians tend to be incredibly resistant to change. I fear, for example, that we won't have badly needed casino resorts in Bermuda until IB has left in droves and the economy has tanked - people will then realize that we really need to turn to other sources of income. But why wait until we're in dire straits before doing so?

[silencedogood on 29.11.05 at 13:11]

Onion,

I agree with you that regulations are necessary, but we are far from reaching even a 10th of our limit on IB. Look at places like singapore and hong kong. Also see my comments on the HSBC thread about high rise buildings.

My statement about people making IB or expats into boogeymen may not apply to you, but it does to a number of vocal bermudians. Just look at letters to the Gazette where locals go on a periodic rant about foriegners.