THE higher taxes or borrowing which may be the inevitable result of Bermuda's increasing Government spending are already very negative political and economic facts of life in the Caribbean Community, the regional bloc many Bermuda Government ministers and Progressive Labour Party supporters hold up as examples for the island to emulate.

The most recent issue of the UK's highly-respected weekly magazine reported that "in proportion to the size of their economies, all 14 of the independent countries in the Caribbean Community (Caricom) are among the 30 most heavily indebted emerging-economy governments. Seven are in the top ten."

Bermuda is highly-rated as a borrower, its borrowing currently limited by statute to $250 million, and there is a self-imposed governmental limitation of ten percent of Gross Domestic Product.

A Ministry of Finance spokesman pointed out that with Bermuda's GDP currently estimated to be some $3.75 billion, the statutory limitation is well within ten per cent of GDP, and actual borrowing, in the region of $190 million, only about five percent of GDP. However, total Government spending was only $540 million in the 1998/99 fiscal year, when the PLP Government first took power, and is closing in on $800 million in the current 2004/2005 fiscal year, an increase of almost 50 percent in six years.

However, even with suggestions that the original Berkeley estimate of $63 million may balloon to some $150 million before the school opens at least two years late, and a Governmental whitewash of the Bermuda Housing Corporation scandal, the rating agencies are not likely to be as anxious as Bermuda's taxpayers about the quality of Government decision-making and performance.highlighted a recent scandal in Belize, where that relatively impoverished country's state pension fund "shelled out $3 million to cover debt guarantees to a company owned by a former government minister. Seven ministers, more than half the Cabinet, resigned to demand the firing of the Finance Minister Ralph Fonseca".

However, politics in Belize is described as a clannish affair, and Prime Minister Said Musa took over the finance portfolio and brought the rebels back into the Cabinet. The recently pilloried Mr. Fonseca was put in charge of home affairs, investments, and the oversight of a proposed new $225 million bond issue.

Since Mr. Musa took office in 1998, public debt has increased from 41 percent of Gross Domestic Product (GDP) to 93 percent, but Belize still lags behind Guyana, St.Kitts and Nevis, Jamaica, Antigua and Barbuda, Dominica and Grenada in the debtor's league table. The public debt of St.Kitt's and Nevis is less than $600 million, but that is still 160 percent of its GDP. suggests that, "except in the case of the bluest-chip borrowers, economists worry when public debt goes much above 50 percent of GDP."

The borrowing binge is a recent and very wide-spread phenomenon in the Caribbean, the average public debt of Caricom countries having risen by two-thirds since 1998. Until recently, these Caribbean countries, with relatively stable currencies and democracies, looked like good risks. Island banks, not least in oil-rich Trinidad, were eager to lend provided there was a government guarantee.

Political independence can not protect Caricom from almost total economic dependence on the vagaries of weather, luck, and distant political and economic events. The warm and welcoming tropical waters which lure tourists from colder climes are at the terminus of the trans-Atlantic hurricane track.

There have been more, and more expensive, hurricanes to contend with and clean up from in recent years, and Hurricane Ivan may be poised to prove that it never rains but it pours. War in Iraq, and strong demand from rapidly-industrialising China and India have led to soaring oil prices, which have forced some Caricom governments to cut fuel taxes.

The 9/11 attacks in the US reminded Caribbean hoteliers how dependent they were on people being unafraid to fly, and when they didn't, tourism tanked.

That lesson on dependence did not restrain Caricom politicians from taking an aggressively anti-US view of the recent ouster of President Aristide of Haiti, a view enthusiastically supported by Premier Scott. Bermuda is dependent on the US for some 90 per cent of visitors and some 85 per cent of international sector finance. does not blame the Caricom borrowing binge entirely on bad luck and terrorism. it is also, they say, about bad policy. In addition to pointing up Belize's distinctive brand of politics, they reported that much of the borrowed money has been poorly spent.

"Critics point to half-empty state housing projects, and chaotic lending by the Development Finance Corporation, a government-owned body. Mr. Musa promises to come clean about any new borrowing, and to publish full government accounts for last year."

In Antigua, the Byrd family, said to have been a role model mostly for corruption, held power for nearly 50 years until a recent election. The Byrds "abolished income tax but brought almost half the workforce on to the government payroll. Antigua's public debt soared to 144 percent of GDP."

Premier Alex Scott faced some criticism when it was learned that his wife Olga was on the Government payroll, having been offered a six-figure consultancy. The Premier regularly attends Caricom meetings, and claims that Bermuda can learn from their political and economic examples.

Former Government Senator Calvin Smith robustly defends the distant neighbours and recently inveighed in print against a Bermudian who had written that the islands to the south were no type of sensible role model for Bermuda.

The citizens of the Caricom countries could only dream of the quantity of public spending lavished on Bermudians by the Government. The amount spent per capita by Bermuda just on public education, some $15,000 per pupil per year, is many times the averpupil, is many times the average Caricom GDP per capita. The new Berkeley school may end up costing more than half of the entire GDP of St.Kitts and Nevis, where many Bermudian families originated.

However, the always-anonymous correspondent, writing from Port-of-Spain, Trinidad, forecast that for the Caricom debtor nations, "the long beach party may finally be over. Rising interest rates will make new borrowing more expensive. In Jamaica, interest payments already eat up over half of government revenue. Even well-managed Barbados was down-graded this month by Standard & Poors, a credit-rating agency, because of its rising debt."

Even after massive borrowing relative to GDP, Caricom economic performance does not appear to be worthy of emulation. The record of growth over the last quarter-century has been mediocre ? on average, its economies grew by only 2.5 percent from 1980 through 2003, a little more than those of Latin America, but less than the average for small island states, according to the International Monetary Fund.

The IMF's Ratna Sahay concluded in a recent paper that a continuation of current policies would endanger the Caribbean's macroeconomic stability. Just to stabilise public debt at current levels will require some aggressive fiscal tightening in several countries. The new government of Antigua is mulling an old corrective: new taxes.

Some of Bermuda's politicians may allow yearnings for closer connections to ancestral roots to lead to a diminution of the national interest in favour of political and racial correctness, as appears to have happened in the decision to nominate Pro-Active for the Berkeley contract. Other than the attraction of some cultural and familial roots, it is difficult to see how Bermuda's political and economic interests are served by closer concord with Caricom.

Without any direct air or sea connections, there is little prospect of meaningful trade. Bermuda is too small a market for Caribbean products, and some of the islands are Bermuda's natural competitors for tourism and offshore business.

However, before his hasty retraction, Government MP George Scott suggested that the less affluent of Bermuda's seniors might have to plan their sunset years on some distant shore. Now we learn, courtesy of , that Belize has "half-empty state housing projects". It may be that Bermuda can export surplus people to some of the cheaper corners of Caricom.

Finance Minister Paula Cox did not return calls by press time. Opposition Leader Grant Gibbons is off the island and unavailable for comment.