Independence makes good economic sense for Bermuda, political scientist and Independence advocate Walton Brown told a gathering on decolonisation last week.

"Independence is certainly no panacea but from a purely economic vantage point it will lend the level of autonomy Bermuda currently needs to ensure it can remain in a strong competitive position," he said at the Caribbean Regional Seminar on Decolonisation.

"With Bermuda's advanced constitutional position, economic strength and political stability it can make that transition more easily than other efforts in the past." Mr. Brown, the only person from Bermuda attending the three day conference in Anguilla, was invited to present a paper on the economic implications of Independence for Bermuda.

"Without the threat of any impending claim to its territory should it move towards Independence; without any inkling that internal unrest will follow, Bermuda faces no obvious barrier to Independence... National independence remains a goal for a significant number of Bermudians and, indeed, remains a salient political issue."

He explained that Bermuda's Independence debate had centred on economic fears with many people referring back to the experience of countries that went independent in the 1960s.

While opponents of Independence often argued it would be too costly, Mr. Brown said, an Independent Bermuda could be administered with minimal additional cost.

"Much research suggests the cost could be minimal, with some consular services doubling with the tourism office in key cities," he said. "Bermuda has always paid its own way and has never sought or received any financial support from the United Kingdom. Similarly, size could be no more an issue for Bermuda at Independence than it is today. The Island has internal self government and an independent Bermuda would assume the reserve powers of the Governor with no discernible difference in the everyday life of Bermudians."

He also addressed fears that Independence would precipitate an exodus of companies as the international business community would lose confidence in the Island's long term stability.

Ratings agencies Moodys and Standard & Poors had undertaken two separate studies on Bermuda's economy last year and both concluded that "Independence would have no material impact on Bermuda's economic fundamentals," he said. The results showed that international business executives were not the least concerned that Bermuda would be "weakened by Independence".

"What is important for this sector of the community, though, is confidence in the neutrality of the legal system," Mr. Brown continued. "Specifically, the existence of the Privy Council in London as the final court of appeal is an important consideration in their decision to locate in Bermuda. An independent Bermuda could easily allay any concern along these lines by retaining the Privy Council as is the practice for many former British colonies." His paper criticised the 1999 British White Paper "Partnership for Progress" which outlined Britain's vision of a new relationship with its colonies. "Given that this policy document tells the British colonies what it expects of them, and in the only 'concession' promises to grant the inhabitants of the territories the citizenship that was withdrawn in 1983, it neither represents progress nor is it evidence of partnership." But the new policy took away Bermuda's autonomy in managing its financial services sector by requiring the country to " 'consent' to UK reviews of its financial services sector and to accept and work to implement new regulations devised in London," Mr. Brown said.

"At a time when other colonies are seeking to have greater autonomy in their internal affairs Bermuda lost an important area of autonomy." Also impacting on Bermuda's ability to compete globally was a move by the "tax haven mavens" to rein in "tax harmful jurisdictions", he continued.

"In an effort to dissuade North American and European corporations and wealthy individuals from moving their assets to more competitive jurisdictions these tax haven mavens have devised a disingenuous terminology called 'harmful tax jurisdiction' by which they mean an offshore country (Bermuda or Cayman, for example) has a tax structure that is harmful to the national interests of an onshore country." And a post-September 11 resurgence of American "isolationist patriotism" which is fuelling efforts to penalise US companies doing business as offshore entities could have "devastating effects" for places like Bermuda, he added.

"Collectively these initiatives represent severe threats to Bermuda's economic foundation."