Int'l business - Bermuda's foreign exchange engine
International business and the tourism industry are now intertwined - and if one fails they will both flounder, according to Kit Astwood, chairman of the Economic Committee of the Chamber of Commerce.
Speaking to The Royal Gazette about his committee's views on the economy, Mr. Astwood said that while retail was still suffering, hotels were picking up, and international business, banking and the financial sector were booming.
"International business has totally replaced tourism as the main foreign exchange earners, " said Mr. Astwood. "Our agriculture no longer feeds Bermuda more than 10 percent. Our foreign exchange earnings provide the real money to feed all of our residents and all of our visitors."
And he said the Chamber extended a warm welcome to the 14,000 international companies (300 with a physical presence) that have set up shop on the Island.
"They are providing jobs for over 3,400 residents - more than the hotel industry at 3,100," he said. "These businesses, hotels and international business support one another and if one fails, both fail - as Bermudians we are bound to understand that."
Mr. Astwood also said that Bermuda's only natural resource was its resident population.
He said: "The ebb and flow of economic success is entirely in our hands, internally."
But he went on to say that externally - popularly called global - forces of an economic or political nature were a constant trend-setter for the Island and had to be monitored to minimise the impact on the internal political, economic and social stability of Bermuda.
"Therefore it follows that any form of internal social engineering has to be considerate at all times, of external political, economic and social trends."
He pointed out that in 1968 a serious devaluation in Great Britain caused Bermuda to give every employed person in Bermuda a ten percent pay rise, to abandon sterling and take up the Bermuda dollar, linked to the United States.
"In the interest of internal stability for all its resident population, Bermuda had to respond effectively to this external challenge,'' he said. "Bermuda's history tells us that our political, economic and social future is determined by the ability of current and future generations."
And he said it followed that the entire business community "is the current, future and constant resource" available to the public and private education system when developing their business-related curriculum.
But he said that while this was vital to job seekers, they should also study languages, English, the arts, history and classics to make sure there was a depth to their personality.
Mr. Astwood said that the main source of trickle-down foreign exchange, hotels, have been in slow decline since 1982.
"External market forces and internal expectations of our profitability by those wage-earners directly involved and secondly owners wishing to plough back earnings to improve decor, linens china and capital came into collision with one another.
"On the one hand external market forces were telling us Bermuda is doomed in tourism if we do not carry out serious capital changes, on the other, internal social engineering was telling us that pensions, healthcare, payroll tax and improved wages were on the agenda and had to happen.
"We managed to talk, talk and talk. You now see the result of a sound good internal search for stability in the hotel industry. A contract has been signed without a strike threat - hats off to both sides."