Contrary to the dismal picture of the future being painted by some political pundits, all the key indicators point to continued health of Bermuda's economy, a local economist says.

Craig Simmons, a Bermuda College lecturer in economics, believes speculation about a crisis in the local economy is diverting attention away from what he says are the problems being caused by the Island's current prosperity.

The challenge for the party that wins the upcoming election will be to deal with the limits to growth and reposition Bermuda in the global marketplace.

"While tourism is down, all the principal indicators -- GDP, international business spending, the money supply, the value of new projects put in place, employment, company incorporations, retail sales -- all those things are good,'' Mr. Simmons said. "What is bothering people a lot is this issue of tourism. But if you take that one out, things are looking very good at the macroeconomic level. So I don't know where these stories of doom and gloom are coming from.'' He said it's currently difficult to determine how much of an effect the downturn of the Asian economies will have on Bermuda. The economic connections between Asia, the US and Bermuda would have to be determined before a proper forecast is made. However, consumers will benefit from the crisis.

"From the consumer perspective Bermudians should benefit,'' Mr. Simmons said in an interview. "It should mean goods from the Asia-Pacific Rim countries will be cheaper. Consumers should be happy because of the Asian crisis. A group that won't be so happy are those folks that got caught holding Asian stocks. Whether they are angry or put off because they got caught with their pants down, that sounds to me like a personal problem. From that to say Bermuda is going to suffer -- it's not clear to me that's the case.'' He said tourism could be hurt depending on how much disposable income of potential visitors is affected by the Asian markets.

"I could see how tourism will be affected if people's disposable incomes are lower,'' Mr. Simmons said. "The people in New England are our biggest market.

Outside of that I can't see how it's going to bring on this deep recession.

There might be some mild downturn.'' Mr. Simmons instead believes the party that takes power on November 9 will have a much harder task in dealing with the consequences of Bermuda's prosperity. The larger economic picture is hiding problems within the society.

"The macroeconomic data hides the fact that there are constituent groups in our society that are not benefiting from the growth in international business,'' he said. "...A large segment of our population feels disinfranchised, and has decided to go off and feed itself independently of the mainstream. There are negative side effects of that from time to time.'' He believes one way Government could encourage inclusion is by promoting more home ownership.

"Bermuda has one of the lower home ownership rates of Western style countries,'' Mr. Simmons said. "It's below 50 percent. A noble objective over the next five to ten years would be to try and increase that by ten percentage points. You want people to buy into the concept of Bermuda as a community, allow people to buy shares in that community. Home ownership is something that can move Bermuda both in terms of a sustainable direction and in terms of a stable direction from an economic perspective.'' Another issue a Government will have to address is how far the continued economic growth can be supported by the Island's ecology. He believes the political parties have tossed that concern out of the door in pushing for more growth of international business and tourism.

"The present economic philosophy of going out and trying to collect as much foreign exchange as you can creates problems for Bermuda as a sustainable society,'' he said. "There are a number of local indicators showing that we are in fact living beyond the rejuvenation capacity of the ecosystem. That's something that needs to be addressed by the politicians.'' Bermuda's per capita production of garbage and energy -- crude measures of consumption -- are among the highest in the world, he said.

Government should develop importing conventions to attempt to reduce the amount of waste produced. A study should also be done on how many tourists and how large a population can be supported in Bermuda.

"We need to determine what's the carrying capacity of our economy,'' he said.

"I believe we are living beyond the rejuvenating capacity of our ecosystem.'' Government will in fact be forced to decide about international business as organisations like the OECD start to crack down on tax havens.

"It's pretty obvious in this area of international business of how we make our living -- getting a company to come offshore and not paying taxes to its rightful government -- and we benefit from that,'' he said. "With globalisation moving along at full speed as economies become more dependent on one another it's difficult for me to see how Bermuda can continue to offer these kinds of tax shelters. In such an economy tax havens don't have a place.'' Bermuda will have to reinvent itself and figure out what kinds of services it is going to provide this global economy, he said. One answer is through promoting electronic commerce. However, other countries are also competing for this type of business.

"The tax advantage will be wiped out in the future,'' he said. "It has been good. We have done well under this kind of regime. If we believe that we can continue in this vein then we are sorely mistaken. We desperately need to look for further opportunities and recognise that those opportunities when they become available as the global community will be more competitive.'' ECONOMY ECO BERMUDA COLLEGE EDC