Bermuda is a ?sophisticated, well-run financial centre? and is good for the global financial system, according to world-renowned financial publication The Economist.

The Island features in a positive way in a lengthy special report on offshore financial centres (OFCs) in last week?s edition of the magazine.

Bermuda is also described as ?the richest country in the world?, based on its 2005 Gross Domestic Product (GDP) per head figure of nearly $70,000.

But the magazine also highlights social pressures brought about by the strain on the Island?s infrastructure, and adds that Bermuda ?quietly pursues affirmative-action policies? to give locals first refusal on available jobs.

?OFCs have largely done well out of globalisation,? The Economist?s special report concluded. ?Two decades ago, they were mainly passive repositories of the cash of large companies, rich individuals and rogues.

?Some jurisdictions still ply this trade today and should be put out of business. But the best of them ? for example, Jersey and Bermuda ? have become sophisticated, well-run financial centres in their own right, with expertise in certain niches such as insurance or structured finance.

?This special report will argue that although international initiatives aimed at reducing financial crime are welcome, the broader concern over OFCs is overblown.

?Well-run jurisdictions of all sorts, whether nominally on- or offshore, are good for the global financial system.?

Regulatory standards have risen in many OFCs, the magazine reported, yet still many struggled to shake off the bad name they had in the past.

?OFCs complain that the bar is set higher for them than their onshore counterparts,? The Economist said. ?When Stanley Works, an American toolmaker announced in 2002 that it was moving its headquarters to Bermuda, it caused a furore.

?Along with other firms that had moved to tax havens, including Tyco and Ingersoll Rand (both Bermuda-registered), it was pilloried as ?unpatriotic?, even though it was acting entirely legally. Partly as a result, new American captive-insurance businesses now often stay onshore.

?A regulator in Europe comments: ?Tax havens have to be whiter than white. It is the only way to shake off their bad reputation ? which some of them deserved not too long ago.??

However, the special report also focused on how regulation in OFCs was often more business-friendly than on shore.

?In America, for instance, a national insurer may find itself being regulated by each of the 50 states,? The Economist stated. ?In Bermuda, by contrast ?you can focus simply on running a sound business and making money ? not on red tape?, says Karole Dill Barkley, an insurance consultant.?

Jeremy Cox, the Bermuda Monetary Authority?s insurance supervisor, is also quoted as saying the Island?s way of doing things is ?practical regulation that tries to use the experience of industry?.

The magazine added that ?Bermuda also puts some of the regulatory onus on independent auditors, who must sign off on insurers? annual filings and confirm that they meet minimum liquidity and profitablility standards?.

Infrastructure strains have come with success for many small-island OFCs, especially for Bermuda.

?Some islands are running out of space,? The Economist said. ?Jersey, for instance, imposes strict housing restrictions. Bermuda is facing even greater strains on its capacity.

?Households are limited to owning one car to cut down on traffic, so affluent businessmen can be seen zipping to work on motor-scooters. Getting permanent residency in Bermuda is difficult and house prices are vertiginous, not least because unlike many other OFCs Bermuda is the home base of many huge global businesses with large numbers of employees.?

The report goes on: ?Bermuda quietly pursues affirmative-action policies that give locals first refusal of any jobs before expatriates can be considered. For the leading OFCs, success comes with its own headaches.?