If there’s a sore point among Bermudians today, it’s their extreme desire to separate themselves from the islands of the Caribbean, particularly from The Bahamas, in the eyes of the world. They’ve been known to send angry letters to publishers of maps, reference sources, and travel guides, insisting that Bermuda is not in the Caribbean. As one irate Bermudian put it, “You don’t claim that Washington, D.C., is part of Dallas, Texas. They’re the same distance apart that Bermuda is from the Caribbean.”
Bermuda prides itself on its lack of economic, socioeconomic, and racial problems. Because of this, you won’t see many homeless people on its streets and there are few living below the poverty line, despite the fact that Bermuda is far costlier than its sister isles in the Caribbean.
Instead, what the island would like to be known for is its performance in banking and multinational business. During the first decade of the millennium, international business positioned itself to overtake tourism as Bermuda’s primary source of revenue. The trend began in the 1970s, when some Hong Kong businesspeople formed low-profile shipping, trading, and investment companies in Bermuda—companies that became, in essence, corporate cash cows.
When Britain surrendered Hong Kong to China in 1997, Bermuda became the largest British colony. A local businessman watched the televised ceremonies in which Britain handed over control, and gleefully remarked, “All we can say is: Thank you very much, Hong Kong, because here come the insurance companies and pension funds.” By the end of the 20th century, nearly half of the companies listed on the Hong Kong Stock Exchange—and even some of the Chinese government’s own holding companies—had established a legal presence in Bermuda, because the island provides such hefty tax breaks. Amazingly, tiny Bermuda emerged as the biggest and most prosperous of all of Britain’s colonies, the bulk of which are now in the Caribbean.
In the 21st century, Bermuda is attracting a growing number of American companies that are incorporating in Bermuda to lower their taxes without giving up the benefits of doing business in the United States. Insurance companies have led the way, but now other kinds of companies are following, including tech firms and investment banks. It’s been trumpeted in the press as “profits over patriotism,” since becoming a Bermudian company is a paper transaction that can save millions annually.
And as aggressively as Bermuda is pursuing business, it’s also more aware than ever of its fragile environment. Bermuda’s population density is the third highest in the world, after Hong Kong’s and Monaco’s. Because the number of annual visitors is 10 times higher than the population, Bermuda has had to take strong initiatives to protect its natural resources. Environmental protection takes the form of stiff antilitter laws, annual garbage cleanup campaigns, automobile restrictions, cedar replanting (a blight in the ’40s and ’50s wiped out the native trees), and strict fishing policies, among others.
Along the shaky road to self-government, Bermuda had some ugly racial conflicts. Riots in 1968 built up to the assassination of the British governor in 1973. But that was a long time ago; today, Bermuda has the most harmonious race relations in this part of the world, far better than those in the United States, or the Caribbean. There’s still a long way to go, but Bermudians of African descent have assumed political, administrative, and managerial posts in every aspect of the local economy. Bermuda hasn’t quite reached the point where the color of your skin is unimportant, but it has made more significant advancement toward that goal than its neighbors to the south.
In 2016 (the last year for which there are records), Bermuda’s average household income was $131,074—a stark contrast with some of the less fortunate islands in the Caribbean, many of which don’t even have the budgets to compile such statistics. Compared with residents of densely populated Caribbean islands like Puerto Rico or Jamaica, no one is really poor in Bermuda. On the downside, home prices in Bermuda are at least three times the median cost of a house in the United States or Canada.
As a tourist destination, Bermuda was a resort long before Florida, Hawaii, Mexico, and many other places. Over the years, it has exploited its position in the northwest Atlantic between North America and Europe. The United States remains its largest market—about 80% of visitors are Americans—but in recent years more and more travelers from Europe, Asia and Canada have been recorded visiting the island.
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