Cup fits in with Island’s rich heritage
Here we are this week, welcoming the America's Cup to Bermuda and looking forward to the sporting excitement that will climax in 2017.
Bermuda, the Dot in the Ocean*, is drawing intense scrutiny from around the world as the new host of this prestigious event.
Who are we? What is this place called Bermuda?
Bermuda's people are for starters tenacious survivors, flexible innovators, and inveterate world travellers
They are also community-connection focused, proudly carrying an incredible centuries-old legacy of skilled seaman, pilots, shipwrights, and in modern day, and audacious intrepid business capitalists.
Bermudian residents have always embraced global mobility, crossing borders for international commerce, employment, military service, retirement, education, relationships, and for sheer survival.
The Bermuda economic environment
Discovered in the 1500s by the Spanish navigator Juan de Bermudez, but not inhabited for another 100 years, Bermuda is a remote North Atlantic archipelago situated in a dangerous promontory fabled and avoided at all costs by mariners. Bermuda is the fourth most remote spot on the globe.
In 1609, a seven-ship fleet left England en route to Jamestown, Virginia, with supplies for the new colonists. Six vessels arrived at the severely overcrowded under-rationed colony. The seventh, the Sea Venture, was rendered asunder on treacherous reefs surrounding the “Isles of the Devils,” the ancient mariners name for the island of Bermuda.
The shipwrecked survivors built two new ships from local cedar timbers and remnants of the wreck. The following year, the Deliverance and the Patience rescued the few remaining Jamestown inhabitants.
Numerous individuals remained in Bermuda, building a settlement and an economy that was supported by both Bermudians and English shareholders (of the time) invested in the Island's future. The evolution of a sophisticated, disciplined civilisation, more than 160 years before America's Declaration of Independence, was accomplished with the establishment of a parliament, government, legislation and community co-operative strength.
In the eye of all trade
Bermuda had a strategic value for the British Empire (under King Charles II) due to its proximity to the major Atlantic shipping routes, North America and the Caribbean. Today the Island remains an British Overseas Territory with almost complete autonomous government rule.
Early Bermudians were intensive farmers and traders originally producing fine tobacco for sale to England and the American colonies, but economic earnings from this crop dropped due to the limited land available along with competition from farmers in the southern US.
Bermudians turned to other crops. However, the trade initiative faded as the American colonies became adept at self-sufficiency.
For survival Bermudians — opportunistic, entrepreneurial, and fiercely independent — did what they knew best, they took to the sea.
Superb mariners, pilots, shipwrights, and nautical engineers, Bermudians developed and built an ultra fast sailing sloop that became the envy of the world.
Adapted from Dutch designs of the period, the fore and aft rigging was an incredible innovation that forever changed the dynamic design of sailing ships and the basis of shipbuilding.
Bermuda ships and shipbuilding became a prized product, highly sought after and eventually competitively emulated.
According to In the Eye of All Trade by Michael J Jarvis, “more than 4,000 very fast Bermudian sloops were built and sold during the seventeenth and eighteenth centuries.”
The colony also prospered through the activities of its own merchant sailing fleet which was a dominant player in the salt trade, privateering for companies and the British government, as well as transporting goods between America and the West Indies.
Close geographical proximity has nurtured 400 years of close relationships between Bermuda and the United States. Our history is replete with US / Bermudian co-operative relationships. The first US president, George Washington, wrote to the Bermuda Governor seeking Bermuda gunpowder to replenish supplies to aid in the 1776 American Revolution, while promising protection in return.
Bermudian merchants and privateers brought goods from Europe to the United States, and then nimbly stepped into blockade running food, guns, and war supplies during the American Civil War. Bermuda continued to grow and export a limited amount of food to the US well in the early 1900s. The Island served as a port for British garrisons, then as an air and naval base for the US and her allies during the World Wars. Parts of the baselands were later repurposed as a sophisticated NASA satellite tracking station.
As the Island's agricultural exports declined, a tourism culture emerged, principally due to voyagers from the US seeking warmer climes. This sector grew exponentially after the Second World War. In the early 1980s, the lucrative tourist trade, a constant source of foreign currency, plateaued. It was supplanted by the growth of international business, focused on insurance and reinsurance, investments and finance.
Economy of modern Bermuda
Today, Bermuda is a highly regarded influential participant in the (re)insurance and captives insurance industry, and is home to more than 16 of the largest insurance and reinsurance multinational companies in the world. Bermuda reinsurers provide 15 per cent of the world's supply of backstop reinsurance and 37 per cent of the world's property and catastrophe insurance.
According to Bob Richards, the Minister of Finance, Bermuda reinsurers paid $1.25 billion of remittance claims for windstorm Xynthia, which hit Europe in 2010. The Island's reinsurers also paid $222 million in claims linked to the Air France crash in the South Atlantic, $800 million related to the Costa Concordia disaster, and $600m related to the Buncefield oil platform fire.
Bermuda's reinsurers have paid out billions of dollars in claims related to major hurricanes which have struck the US, including Andrew, Katrina, Wilma, Rita and Sandy, and also in the aftermath of the 9/11 terrorist attacks on the US.
Through this industry Bermuda provides support for thousands of jobs in the US, UK and globally.
Bermuda's people are masters of skilled survival. When faced with all manner of economic obstacles our forebears and current residents have successfully adapted the sea and its trade to become who we are today. Bermuda's people are independent, economically-driven risk-takers, confident in their unique position in the global economy.
“Sailing is how we were discovered, how we survived, and how we have thrived,” said Premier Michael Dunkley, as Bermuda was announced as the venue for the 2017 America's Cup.
We deserved to win the America's Cup; we competed fair and square and we have earned it. Perhaps it was a bit of payback for that rescue 400 years ago at Jamestown.
Readers, this is a short overview narrative of our supremely individualistic island economy. Please forgive any shortcomings, omissions, or interpretations. Space does not permit a full documentation of Bermuda's unique position in history.
Sources and references:
* “The Lot of the Dot” coined by Bob Richards, Minister of Finance.
Martha Harris Myron CPA CFP JSM Masters of Law: International Tax and Financial Services. Appointed to the Professional Tax Advisory Council, American Citizens Abroad, Geneva, Switzerland. The Pondstraddler Life Consultancy: planning, publications, presentations on international tax, immigration, investment, retirement, legacy, and related financial challenges to the lifestyles of internationally mobile individuals and their businesses residing, working, crossing borders, and straddling ponds in the North Atlantic Quadrangle. Specific focus for residents of Bermuda, the premier international finance centre. Contact: email@example.com