Fixed Income Management announcing that it is relocating its operations to California. The firm had 18 staff here and manages approximately $10 billion in assets. Its principal offices are currently located in Hamilton.

William H. Williams, Chief Executive Officer of STW stated: "STW is in its sixth year in Bermuda. We have found it not only prudent but also necessary to relocate our business to the United States. Bermuda is a democracy. I respect the Bermudian people's right to elect any government they wish. Now all of us on the Island must live with the results of the last election and all of its implications. Our company competes with the top asset managers in the world.

We must be able to freely recruit and retain the very best talent and to manage our business efficiently. If we cannot, we will fail in our fiduciary responsibility to our clients and lose out to our competitors who are not similarly hamstrung in the conduct of their businesses.

`Gov't unpredictable' Bermuda is a very expensive place to do business. Its light regulation in the past was a major factor in offsetting the high costs.

We are concerned about the new work permit policies. Delays in granting permits, the necessity to advertise for important positions, and the proposed limit on how long a non-Bermudian may continue employment on the Island is unworkable for companies who need the best available employees. We believe the imposition of CURE regulations will be disastrous. The employment of the best qualified individuals at all levels of a business regardless of race is an important goal for employees seeking good jobs and employers wishing to hire the best workers. This legislation, rather than promoting opportunity, threatens to cripple or drive away the very businesses that provide the jobs.

The present Government seems to us to be unpredictable and more motivated by their ideology than we would like and less by practicality than we require. We don't know what they'll come up with next. We can't afford to wait and see.

`Great damage done' We cannot have bureaucrats and governmental boards calling the shots in important aspects of the management of our business. This is not a preference.

It is an absolute imperative.

Bermuda's economic success will be determined by the activity of real business doing real work on the Island with real employees, not by the number of paper entities in the Register. STW once had 25 employees on the island, twelve of which were Bermudians. We now have eighteen, five are Bermudian. Eventually the number will be two, one may be Bermudian. The direct Bermudian job losses at STW, while unfortunate, will have less effect on the economy than the loss of services that will no longer be provided to the company and its employees by Bermuda-based businesses and individuals.

The government and the people of Bermuda must respond to the reality that much of the international business here is highly mobile. Rational enterprises will locate their operations where it serves their self-interest. There is a risk that this statement may be misinterpreted as a threat. It certainly is not. It is simply an assertion of economic reality.

Is there hope for the future? I can't say, but great damage has already been done.

`Over-regulation' Who would locate new operations in Bermuda if the quality of their middle and paper level employees were important to the efficient operation of their business? Who would not be put off by the uncertainty about the polices of the future? What international business with a substantial presence in Bermuda is not at this very moment in the process of evaluating which parts of their operations might be better located elsewhere? The longer things are allowed to deteriorate, the less chance there is for saving the prosperity of this Island. International business must speak out publicly and in no uncertain terms, letting Government and voters know the specific damaging effects of Government's actions, and the steps the companies will take if things are not made right. Bermudians from all walks of life must let individuals in Government know that they object to the threat to their prosperity from the wrong-headed policies and less than efficient administration. The Opposition must quickly put forth a proposed set of policies for business. These must be even more liberal than those that existed under the former UBP Government. They will then be a standard against which to benchmark present and future policies.

Finally, "International Business'' must begin to be viewed as enterprises that have chosen to come to Bermuda to conduct business internationally, not some alien entity to be mistrusted and over-regulated.

`Divisive rhetoric' Only then will these enterprises truly be a part of the Bermudian community with an equal stake with all Bermudians in the Island's future. My experience on this island shows me that Bermudians of all races have been among the freest people in the world, with a wealth of opportunity. I fully understand that the ghosts of the discrimination of the past still haunt Bermuda's memory. Anti-foreigner and racially divisive rhetoric and policies may feel good to some, but at a practical level, they benefit no one. In spite of the message carried by a few demagogues and the grumbling of some members of the public, Bermudians are hardly serfs, but there is a lesson for Bermuda in a verse by the 19th Century Russian poet, Nikolay Alexeevich Nekrasov.

And now the chain is broken Both ends are recoiling One end strikes the landlord The other end the serf.''