If Bermuda’s wealth of past centuries was generated in large part by pirates and privateers, today’s pursuit of capitalistic rewards from these 21 square miles is no less ambitious or lucrative. Bermuda remains a society of no-holds-barred entrepreneurial spirit, and islanders, no matter their job field, are ever ready to grasp shifting opportunities or run with a good idea. Money—making it, spending it, and, very often, flaunting it—is the lynchpin of island life, and you need relatively more of it here to pay for everything from restaurant tabs and groceries to rent and transport. Because practically everything must be imported—food, clothing, household goods, animals, machinery—and prices reflect high government customs duties, the cost of living in Bermuda is among the world’s highest. That is even without traditional sales, income, or wealth taxes, though there exists a 13.75 percent payroll tax split by employer and employee. But if costs are high, so is the standard of living. Gross domestic product (GDP) per capita income for 2008 totaled a whopping $91,000, the highest in the world, ahead of Qatar and Luxembourg. Bermudians often work two or three jobs, though sometimes not to make ends meet but to afford more luxury goods and overseas trips. Consumerism is rampant. “Bermuda is not a place of ‘haves’ and ‘have-nots,’” jokes a friend of mine. “There are only ‘haves’ and ‘have-mores.’”
Such a quip is not entirely true—there are homeless Bermudians, seniors struggling to pay for medications, and numerous cases of families sharing apartments to get by. But one would have trouble finding genuine abject poverty here. Bermuda’s national GDP in 2007 was $5.85 billion, or $91,477 per person. Of that, the biggest contribution was from international business, with 22.4 percent year-over-year growth, which is four times the rate recorded 10 years ago. A total of 1,700 new international companies were registered here in 2007 alone, and the sector has maintained its position as the island’s largest employer. Industries that supported the business sector, such as financial, computer, accounting, and legal services, also fared well, as did the real estate sector. Unemployment is near zero. As a result, the island has a labor shortage that attracts thousands of foreign workers to fill mostly white-collar jobs in the international business sector.
That Bermuda may be a textbook example of unbridled economic success is all the more impressive given its geographic remoteness and the unlikely path of its current prosperity. From tobacco farming to shipbuilding to the sale of winter vegetables, the island’s economy flip-flopped from one pursuit to another over the better part of three centuries. In the 1900s, Bermuda reinvented itself twice. With no exportable natural resources, no heavy industry, and few viable exports other than onions, the island cashed in on its physical beauty, launching an enviable tourism industry in the early 20th century that became its economic pillar. An even more dramatic economic makeover was to follow: After the end of World War II, Bermuda simultaneously began to attract foreigners interested in the island for its offshore business benefits—and a behemoth second fiscal mainstay was born. Thousands of insurance “captive” companies, trusts, mutual funds, and most importantly, multi-billion-dollar reinsurance firms, flocked to the island in the 1970s, ’80s, ’90s, and beyond, turning Bermuda into a blue-chip financial center. International business quickly surpassed tourism as Bermuda’s major cash cow, and today, the island’s reinsurance sector alone ranks third in the world, behind New York and London, with total assets surpassing $100 billion.
“Bermuda, Inc.”—as the number-one industry is dubbed—is, perhaps surprisingly, not all good news. Despite its large and increasingly affluent middle class, Bermuda is currently witnessing an increasing economic gap between the rich, who benefit from corporate largesse with housing allowances that pave the way for $15,000-per-month waterfront homes, bonuses, and expense accounts, and the less privileged, who work in traditional jobs or service industries—a two-class system that fuels social, economic, and racial rifts. Young black men, particularly, feel shut out of the prosperity enjoyed by the international business sector.
Amid the global economic downturn of 2008–2009, Bermuda began to brace for impact—though in past recessions, the island has been mostly buffered from severe problems suffered by mainland economies. Nevertheless, there are widespread fears that Bermuda’s inflated economy could burst. Bermudians are for the first time beginning to question both the less-tangible costs of success—among them, the dire housing market, overcrowded roads, and environmental destruction—and the reality of a continued surge in their economy’s growth.
Most people recognize the tenuous strength of an economy that could be devastated by something as trivial as a change in local work permit rules or overseas tax policy. Critics deplore Bermuda’s reliance on international business at the cost of neglecting other economic generators.
Such fragility of the island’s hot economy, and the fact it is driven by non-Bermudians—the captains and owners of island-based multinational corporations—are the downsides of what, on the surface, seems a win–win scenario for the island. Despite some misgivings, though, Bermudians appear determined to ride the wave of opportunity while it lasts. As for what comes next, their economic spirit seems content to embrace the stoicism of Bermuda’s national motto, emblazoned on the island’s flag: “Whither the Fates Carry Us.”
© Rosemary Jones from Moon Bermuda, 2nd Edition