Dear Sir,As a former resident of Bermuda from 1994 to 2000, I regularly read The Royal Gazette online. Therefore, I note with some sadness that the economy is not providing the good jobs and benefits to Bermudians that it did in the past. As an example, the letter published on November 26, 2019, titled “Stop talking, start acting”.I would like to briefly explain why I feel that the outlook for Bermuda and Bermudians is much brighter than is generally perceived.The first thing to understand is the nature of the Bermuda economy. In my opinion, it makes its living by providing services to persons in other — much larger — economies, chiefly in the form of offshore financial services and, to a smaller degree, tourism. Offshore financial services have been for many years dominant because of the competitive advantages of Bermuda, namely British jurisdiction — and the stability that implies — a developed common law legal system, proximity to the United States, European and British time zones, excellent communications and the use of the English language.Although it is wonderful to see some recovery in the tourism industry, I don’t feel that it will be the major industry for Bermudian employment that it was in the 1960s and 1970s. This is in large part owing to the cost base compared with other locations in the Caribbean. Although this was also true in the 1960s and 1970s, what was different was the cost of air travel as a proportion of the vacation. I doubt that a vacationer from the US East Coast would find it much cheaper or quicker to fly to Bermuda instead of the Caribbean, in which case the cost of hotels, meals, etc, become relatively more important in selecting a vacation destination — and cost is something that Bermuda, with its higher standard of living, will always find difficult to compete with.However, the situation is much brighter for financial services. Consider the following example: three investment professionals decide to relocate from London to Bermuda to set up an offshore hedge fund. They can initially raise $30 million in capital. The reason why they wish to move offshore is to reduce the tax burden on themselves personally — both now and in the future — and upon their investors, who are likely to be international and therefore can avoid UK taxation by remaining offshore.I would expect the revenue stream from this capital to be approximately 1 per cent — or $300,000 — per annum, including both “hard” and “soft” revenues; hard revenues being cash fees, soft ones being benefits that brokers grant fund managers for passing trades through them. This number assumes that the usual management fee of 1.5 per cent to 2 per cent per annum is reduced to encourage initial investors.Three hundred thousand dollars per annum sounds like a good income, but it wouldn’t be enough to maintain the fund, so the three partners — typically a fund manager, a co-fund manager/business development person and a chief operating officer — would have to subsidise the initial year or so from their savings, but this is normal in the hedge fund industry.The fund would need premises, accounting, fund administration, legal and IT support — let’s assume that they can do that for $15,000 per month in total.Each of the three founders would need to rent accommodation, run cars or bikes, buy food, etc. Let’s assume that each one spends approximately $6,000 each per month on these. That’s $18,000 per month.This adds up to $33,000 per month — $396,000 per annum spent in the local Bermuda economy.Assuming that one third of this is used to purchase items from elsewhere to sell to them — petrol, food, overseas brokerage and legal services — that is still approximately $260,000 per annum of net benefit to the Bermuda economy.I would expect that this spending would generate, or safeguard, three to four reasonable jobs in the wider Bermuda economy — bank, IT, audit, retail, restaurants, hotels, when business travellers and investors come to visit.That’s one small firm, but if the Bermuda environment is welcoming to one firm, then others will follow. I don’t think that it is unreasonable to see 20, 30 or even 50 of such firms within a few years, and subsequently many more — and larger ones — in the coming years. Similar enterprises in the private equity, venture capital, private family office and private trustee sectors can similarly be attracted to Bermuda. There is also considerable, and growing, wealth in Asia, Africa, the Middle East and other developing locations that should find a stable, offshore, common law, English-speaking jurisdiction attractive. I have few doubts that the long-term market will be large and valuable.Additionally, if the firm grows, then not only will the amounts that it spends in Bermuda increase, but it will likely start adding direct staff. In my experience, such businesses are more than happy to give opportunities to smart young locals. The next point to consider is — if this type of business is attractive to Bermuda — how this business can be attracted to Bermuda. Well, in this regard, Bermuda has some strong advantages — in addition to those that I have mentioned earlier.First, there is very strong pressure from the developed economies to withdraw those tax and regulatory benefits derived from being offshore to those entities who do not have a substantial presence in their offshore jurisdiction. So it will not be possible to do this from New York or London with only a PO Box in Bermuda. Proper infrastructure and people will need to be located in Bermuda.Second, Bermuda has a very valuable diaspora that it can draw upon. There are literally hundreds of expatriate accountants and lawyers in positions of influence around the world who once lived in Bermuda and who have a positive opinion of Bermuda and Bermudians. Given the opportunity, I have few doubts that they would be happy to direct business back to Bermuda.Perhaps I’m an incorrigible optimist, but I remain convinced that Bermuda and Bermudians have a bright future.RICHARD BOUTLANDMorganville, New Jersey