Where are we now?
Bermuda's economic position is almost unique. With one of the highest Gross Domestic Products per capita in the world yet very few natural resources, the population is dependent on imports for most basic commodities and consumer goods. Bermuda imports merchandise and exports services. Foreign currency generated by international businesses, from tourism and from overseas investments, makes Bermuda a wealthy island which sustains many varied local businesses.
In 2004 Bermuda earned over $1.7 billion from tourism, the financial sector and international business and spent $964 million on imported goods (including $64 million on cars and vehicles), and $226 million on over 155,000 overseas trips.
Yet Bermuda's current economic success is, like any other economy, vulnerable. The economic mainstays are subject to many influences beyond Bermuda's control, including increased competition from other jurisdictions. However, the lack of economic diversity and the difficulty in identifying alternative economic sectors to earn foreign currency which will not impact negatively on Bermuda's infrastructure and limited workforce means that Bermuda has to be more nimble and watchful than other, larger jurisdictions in protecting its current economic situation.
This has always been the case and Bermuda has been successful in identifying and embracing new opportunities throughout its history. This Chapter seeks to explore some of the issues associated with maintaining the economy, as well as ensuring that all Bermudians have the opportunity to share in Bermuda's prosperity.
One area which is very difficult to address is the cost of living and doing business in Bermuda. Bermuda's small size presents issues of scale throughout the market, which in a number of cases prevents effective competition that could bring down prices. Equally, the high cost of living is simply an indicator of the sustained success of the economy and an increase in disposable incomes.
Issue 4.2: How do we strengthen the existing economic sectors which earn foreign currency?