Bermuda Well Placed To Respond To Financial Crisis: BIBA

by Phillip Morton, Investors Offshore.com

02 March 2009

The Bermuda International Business Association has commended the Bermudan Finance Minister, Paula Cox, on her 2009 budget, stating that it will enable the Association to adapt Bermuda to survive the current economic climate and face challenges resulting from a global revision to financial governance infrastructure.

Cheryl Packwood, CEO of the Bermuda International Business Association commented:

“The Bermuda International Business Association commends the decisions announced in the Budget Statement of the Minister of Finance. To fund our needs and develop a cushion for unexpected systematic shortfalls, Minister Cox has, in our opinion, successfully adapted and tailored to Bermuda, the wisest choices made by other governments in dealing with far harsher economic crises than ours.”

“Domestically, we respect that Bermuda’s government has rightly focused not just on encouraging sustainability of the Island’s business community in these turbulent times, but also on ensuring that all Bermudians are able to participate in any successes within the international business sector. The government has also offered necessary encouragement and careful prodding to international businesses, so that Bermuda is more than just a great example of capitalism, but it is also an example of a truly progressive and inclusive society.”

Packwood continued stating, “Current widespread economic crises and related problems are now highlighting the transparency and governance weaknesses in many of the offshore jurisdictions that are traditionally viewed as our competition. Additional funding would have afforded us a strong opportunity to aggressively move forward and highlight Bermuda’s strengths and enhance interest in our Island as the leading offshore jurisdiction for companies and individuals seeking a transparent, well regulated jurisdiction with nothing to hide. However, receiving the same budget allocation as last year does allow us to continue to focus on the areas that were previously identified, and retain the recognition factor that we have worked so hard to create. We are grateful that we have been provided the opportunity to continue to move forward domestically and internationally in these areas. We deeply believe as an organization that our work not only is to highlight our strengths internationally, but our members have the responsibility to work to cultivate relationships at home to create opportunities for young Bermudians in international business, and also build interest in education and training so that our next generation is well-prepared to capitalize on those opportunities and preserve and advance Bermuda’s standing as a leading financial center in the World.”

“Bermuda has a remarkable history of growth and success in international business that this budget allows us to continue to foster. Past growth and success has occurred through a unique and compelling partnership between Bermuda’s government and its business community. There is an indelible spirit of understanding, cooperation and common purpose that has enabled the Island to carefully plan and implement policies that we are confident will help to promote long-term economic growth and sustainability.”

“There is no doubt that international business and, in particular, the financial service business, including insurance, reinsurance, trust management and administration, fund management and administration and capital markets product offerings have become the driving force in Bermuda’s economy, contributing increasingly larger shares of Bermuda’s gross domestic product and foreign exchange earnings. We are most fortunate, that in times like we are currently experiencing, we have been granted the funds to continue to show the world our strengths. This is a rare opportunity that will reinforce our unique and trustworthy standing amongst offshore jurisdictions.”

“Bermuda’s government has carefully managed its financial resources and contribution to the growth of international business, while also working hard to assist the development of its tourism base in these difficult economic times. That management is seen in the remarkable credit ratings that Bermuda has earned from Fitch, S&P and Moody’s.”

“As we look towards the next decade, the Bermuda International Business Association believes we are approaching another new phase in Bermuda’s international business economic development. The conditions of the current global economic climate are not to be ignored. They are undoubtedly challenging and the beginning of the turnaround is uncertain, particularly since no one seems to know where the bottom of the economy and the market is. However, we believe that this budget addresses this and take comfort in the foreplanning that is evidenced.”

Over the last two years, Bermuda has been increasingly aggressive in marketing itself as a jurisdiction as the place for innovative and effective international business. Research undertaken by BIBA in July, announced last week, showed that Bermuda had made tremendous strides in both new and existing markets.

Detailed findings showed:

• Awareness of Bermuda in international business is relatively high overall in key markets around the world
• 85% of North American respondents and 87% of United Kingdom and European respondents were very familiar or familiar with Bermuda.
• In new markets in Asia and Latin America, 51% and 54% of respondents respectively were very familiar or familiar with Bermuda.
• 100 % of insurance / reinsurance executives surveyed know Bermuda, which is remarkable in the context of any survey
• Of lawyers surveyed, 85% in N. America, 90% in the United Kingdom and Europe, 65% in Asia and 55% in Latin America were very familiar / familiar with Bermuda
• Of accountants surveyed, 60% in N. America, 75% in the United Kingdom and Europe, 15% in Asia and 10% in Latin America were very familiar / familiar with Bermuda, suggesting that there is an opportunity to expand relationship build awareness in both traditional and new markets
• Among the 70% of all respondents surveyed who were very familiar/ familiar with Bermuda, the jurisdictions strengths remain fairly consistent in major markets including 45% highlighting its sophistication and ability to do complicated business, 35% highlighting the credibility of service providers and 20% highlighting reputation of the jurisdiction
• Bermuda’s reputation and the experience of its service providers are strengths with those that are very familiar / familiar with Bermuda in Asia (18%) and Latin America (19%), suggesting that building on those features will be helpful in enhancing Bermuda’s reputation
• In Asia, 55% highlighted Bermuda’s reputation and 40% highlighted experience of Bermuda’s service providers as strengths.
• In Latin America, 45% highlighted Bermuda’s reputation and 38% highlighted experience of Bermuda’s service providers as strengths.
• While the survey was overwhelmingly positive, Bermuda has an opportunity to address some of its perceived weaknesses among those who are very familiar / familiar with the jurisdiction.
• Among the features that were highlighted as weaknesses by the 70 % who were very familiar / familiar were the perception by 45% that Bermuda is costly and 25% that is slow and inefficient.
• Despite those perceptions, the good news is that among that same group only 18% had concerns or perceived the “Tax haven” label as a weakness, suggesting that this is a declining issue of concern. Similarly only 17% had concerns or perceived a weakness in Bermuda’s proximity (too far away from their home jurisdiction)

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