Roger Crombie

Ratings agency A. M. Best, surveying the Bermuda re/insurance market late this summer, cast doubt on the island's ability to continue its remarkable growth. "Bermuda may be unable to sustain the current boom in the reinsurance industry due to a lack of local intellectual resources and office space," Best reported. Referring to the insurance and reinsurance companies formed in Bermuda since September 11, 2001, Best commented: "Uncertain ... is the ability of these Bermuda start-ups to build the necessary infrastructure over time, as intellectual resources and office space are in high demand and short supply on the island."

Best had its facts essentially right. Available intellectual resources are not just in short supply in the Bermuda ref insurance market: they are virtually nonexistent. Every Bermudian who wants to work in the sector already does so. New staff cannot be trained quickly enough. As investment in the Island's insurance sector soared after September 11, 2001, required headcount increased significantly, resulting in a wave of employees. hired from overseas.

Best refers chiefly to two problems that could be easily solved. One: Import more staff--a posting to Bermuda is hardly a hardship or a blot on a well-rounded resume. Two: Add office space, a process already well under way, as Hamilton extends itself in three directions simultaneously (Hamilton Harbour blocks the fourth).

Although the local population is loath to see more staff imported, Bermudians are smart enough to understand that insurance and other international businesses attracted three-quarters of the Island's foreign exchange earnings last year. As to office space, hardly anyone has objected to the recreation of the Hamilton skyline in the past five years or the ongoing construction boom.

What Best did not refer to are the threefold problems of success that may intractably dog Bermuda's growth prospects: housing, schools, and traffic.

Bermuda's housing market has always been expensive. Now, with monthly rents for well-appointed four-bedroomed houses running as high as $30,000 a month, Bermuda's landlords are laughing all the way to the bank. The top end has dragged the rest of the market with it, however. The cheapest one-bedroom apartment, with less than perfect facilities, costs about $2,000 a month. That sits badly with those who earn less elevated wages.

Bermudian houses are traditionally one level, but that may have to change. Change, however, is anathema to Bermudians, and their island becoming a Hong Kong for the 21st century is considered by many the worst possible outcome.

Bermuda's public school system has catastrophic problems. At fault is a policy that requires teachers to be Bermudians, plus an overpaid and underachieving Education Department that could do worse than send itself back to school. Private schools in Bermuda have been expanding as fast as possible to meet demand, but cannot keep pace. This situation will not change soon, and is a cause for grave concern among parents who cannot afford to fund both private education and, through their taxes, a misguided public school system.

Traffic, as any visitor to Bermuda will recognize, is daunting. Ninety-minute commutes to and from the Island's West End are not uncommon, and few appear willing to abandon their autos in favor of comfortable ferries. Courtesy on Bermuda's roads has all but vanished. The number of vehicles now approaches the population and will, one day soon, exceed it. Government has failed to come up with any feasible solutions.

The quality of life in Bermuda has deteriorated as the international sector has increased. This has fueled a resentment that has always existed against foreigners, who are seen to take advantage of Bermuda without necessarily adding value. That attitude could not be more wrong, but it sticks.

The issue of sustainable development is often raised and never resolved. Inaction on the part of succeeding governments has led to today's complicated situation; a continued lack of decision-making will only lead to increased social problems. Success, it seems, has its price.

Roger Crombie can be reached at crombie@northrock.bm.

COPYRIGHT 2002 Axon Group

COPYRIGHT 2002 Gale Group