Out with the old – it’s time to embrace a new world
So Bermuda is blacklisted with the European Union and the hopes are to get off the list as soon as possible to avoid future losses in business and real damage to the economy. The perception of Bermuda as a tax haven, in spite of everything the Government has done to indicate otherwise, will become an increasing challenge in the future.
The idea of the former North American Free Trade Agreement is not unrelated. The march towards globalism unveils the disparity between nations, rich and poor, large and small. The case for interdependency cannot be any stronger and that song No man is an island is even more real today. Countries no longer have subsistent economies and depend on trade to maintain their standard of living.
Smaller jurisdictions and little islands live off the crumbs that fall through the cracks of the larger producer nations, which have become increasingly socialised and taxed. The demands for solvency and maintaining sensible budgets have caused the larger jurisdictions to look strenuously at sealing any leakages or cracks that erode their tax base. Included in that exercise is the idea of fair trade regulations aimed at creating a level playing field or an egalitarian business environment.
Bermuda offers services in a low-tax environment, services that can be offered in the larger jurisdictions also, but taxed at a higher rate. It’s that disparity that the larger jurisdictions are attacking like ravenous pitbulls without realising the harm and seemingly with little or no concern for the consequences of the little countries who depend on providing those services and who express the sovereign right to set their own tax requirements.
This emerging problem facing smaller jurisdictions is naturally occurring and not some grand global conspiracy brewing. It is somewhat similar to the mergers in the larger corporate world. Larger companies force a higher standard for compliance, a standard that smaller companies find too onerous to survive owing to issues of compliance and therefore the companies are forced to merge.
There will be cries by some of “colonialism”, exploitation and the like, however, this is not a colonial issue or, as some may prefer, it is not a matter of slave exploitation or the evil empire flexing its muscles. It is bigger than that, and a global dilemma of equality and access to a quality of modern life for all citizens of the earth, regardless where they live.
The world cannot perpetuate a status where some nations are preparing to have their people walk on the moon while others can only prepare theirs to work on plantations. These are issues that Nafta and regionalism were meant to address. The children of the world are in need of a proper education not predicated on the size of their country. Nationalism today is against the world and its greater need.
This may be the time when little countries decide with which larger jurisdiction they wish to form a greater relationship. The ability to provide a world-class education, healthcare and provide for seniors rises every year, and at some point it becomes unsustainable. Protests and raising the flag of independence will not fix it.
For centuries, our little jurisdictions have been buccaneering economies. Today is a new world. No more buccaneering. We must stop looking through an old lens and find the path to a new world that is bound together.