Cox to find out why.

The Island's economy appears to be booming, with the Bermuda Stock Exchange having one of its best weeks in history, the balance of payments in healthy surplus and inflation lower than United States.

Although businesses expressed concern over new CURE race reporting regulations and a tightening of Immigration laws which saw one company move off the Island and many others look at other jurisdictions, things appear to have settled down.

Tourism is still on shaky ground with air visitors and spending down and retail is hurting from the loss of American dollars visitors bring with them.

But the two main pillars of the economy, both tourism and the more stable insurance sector, have been propped up by a boom in the financial services sector and a growing e-commerce industry.

Finance Minister Eugene Cox said: "I am very pleased with the way the economy is going. People out there are saying it impacts them in different ways, but the reaction seems to be positive.'' The balance of payments estimates for 1999 have, according to Mr. Cox, been one of the indicators that the economy is strong.

"There has been a healthy surplus, and we have been able to buy currency easily. There has been no shortage of dollars. No-one has been denied the possibility of selling foreign exchange to go abroad.

"The level of surplus is certainly healthy and there is a net earnings of foreign exchange which gives the people of Bermuda the opportunity to make purchases from overseas without any difficulty.

"That is key. If we had a deficit then there would be problems. It is really very, very healthy. People have money to spend and that is what is driving it.'' Inflation in Bermuda currently stands at 2.9 percent, having peaked at three percent in February, before dipping once again in March.

But Mr. Cox says he is not worried about the rise in inflation, because it has been driven by an increase in the price of fuel. He added that now the price of fuel is going down, so will inflation, but the figures will not reflect this for some time.

"Fuel costs are impacting on us. We will not see the reduction in the prices of oil until the figures that come out at the end of July or even August. It is good that we can see inflation going down already and the effects of oil prices coming down will be reflected in due course.'' Mr. Cox was also happy that the number of businesses being incorporated on the Island are up. Latest figures show that in 1999 11,494 international businesses were registered in Bermuda, and 2,528 local. In the first quarter of 200 there were 51 new registrations for local companies, and 408 for exempted companies -- up a massive 74 percent on the same period last year.

But he acknowledged that tourism was not doing so well, with a seven percent drop last quarter in the number of air visitors to the Island. The 3,700 fewer visitors impacted on the amount that was spent both on the number of people staying in hotels and money spent while on holiday.

Resort hotels reported declines of 15.9 percent and the amount spent on food accommodation and entertainment fell by 6.4 percent. They spent $46.9 million -- down $3.2 million in the same period last year.

"People have talked about international business as being one of the two main pillars of the economy, but the spectrum is broader than that, Mr. Cox said.

"While we still want to see tourism grow to a certain extent and we are still targeting it with trying to get an increase in the number of flights and cheaper airfares, it is good to see international business thriving.

"Not only has there been an increase in the number, but this year we also landed a terrific coup. We got the Concert people -- the new joint venture between AT&T and British Telecom.

Financial services and e-commerce drive growth in Bermuda economy "They employ 60 people so far, and at the moment 20 of them are Bermudian.'' Mr. Cox said this was the kind of high-calibre venture that Bermuda wanted to attract to the Island -- companies that wanted to train and invest in Bermudians at a high level.

He said the company had consulted carefully before it came in and the logistics of work permits and growth were talked about before it moved to the Island.

"From ventures like this we gain in income, have a company located here, more jobs, more training on the cutting edge of the industry and it gives us diversification of jobs on the Island.'' In terms of the dramatic upward swing in the Bermuda Stock Exchange, Mr. Cox said it was another indication of how well the economy was doing.

"Certainly when we see the value of shares go up, it is an optimistic thing for Bermuda. People purchasing these shares shows an interest in commodities we have to offer. It certainly seems to be healthy when shares go up and the index is up.'' In retail he said sectors that catered to the local market seemed to be strong, but other sectors were weak: "I would like to think that some of the things that we have done have helped -- like the $900,000 we released in revenue we would normally have claimed in the Budget.

"We are anxious and happy to see this sector grow and prosper. One of the factors affecting the shops is the decline in the number of tourists, and we are trying to grow tourism, so that in turn will benefit the retailers.

"The bottom line is more tourists will impact on retailers, who will employ more staff and make more money, and that is our goal which we will hopefully achieve in the next year or two.'' Finance Minister Eugene Cox