In the mid 1930s Sir Henry Tucker discovered that exempting foreign dealing companies from Bermudian ownership restrictions could create wealth and prosperity for Bermudians. Today, as our debts have grown and we face prospects of a prolonged local recession can we return to his idea for inspiration? Are there restrictions we could look to relax today to rejuvenate investment and encourage capital flows into our island to get our economy back on track? Rather than simply exempting a company from Bermudian ownership requirements, perhaps we could create special exemption zones that exempt the requirements of Bermudian status on business and property ownership as well as residence restrictions while saving the rest of Bermuda for Bermudians?
What Bermuda needs most is to provide for Bermudians. We’re facing dire times with increasingly greater numbers of unemployed and many finding themselves without the levels of education necessary to succeed in our prime industry. We’ve relied heavily on high paying jobs with low skill requirements as a means to survive Bermuda’s low education levels, high cost of living and bridge the wealth divide. During the boom times, construction offered a great many such opportunities. Now that the bubble is bursting, many are finding themselves without opportunity and some are turning to crime. Our most important task is to ensure that we can adequately employ Bermudians, ensure a reasonable cost of living and make it sustainable enough for Bermudians to continue to prosper.
In a May opinion piece in The Royal Gazette John Jeffries recalled Sir Henry’s idea and suggested it could serve as inspiration for how we could salvage our economy. Mr. Jeffries pitched the ‘Monaco Model’ of offering residency cards as an illustration of what we could do here. His suggestion was for casinos and while we can be wary about the positive or negative impact casinos could provide, we could instead focus on Mr. Jeffries suggestion that we examine Monaco’s residency card program. A large part of Monaco’s success is in their ability to offer residency to individuals of very high net worth and encourage significant capital investment from these individuals. Would Bermuda change for the better if we could encourage the same?
The largest issue with offering residency and ownership rights to non-Bermudians is the fear that Bermudians will be priced out of Bermuda. It’s a valid concern, the average Bermudian cannot compete with the wealth and prosperity of the world’s rich and famous. One question however is whether we could leverage it to our advantage? Much like how we exempted a certain kind of business from Bermudian ownership restrictions could we do the same with certain designated zones? Could we take areas like Hamilton, Morgan’s point and Southside and create special exemption zones that encourage foreign investment while leaving the rest of Bermuda for Bermudians? Could we take that foreign investment and turn Bermuda into a leading business traveler destination not only for our existing industries but to expand to better cover the trade shows, conferences and incentive travel that we're best suited for?
Using capital from foreign residency card holders we could develop these exemption zones into major business tourism centers. They could serve as an economic pillar not encumbered by the need to be low tax nor the seasonality that plagues our leisure tourism industry. Further we could develop the area with marinas, conference centers, meeting spaces, hotels, spas, entertainment and housing, all while freeing up more of the rest of Bermuda for Bermudians. In the interim we would return growth to the construction industry while in the long term create more diversity in the jobs available for less skilled Bermudians.
The brilliance of Sir Henry’s model was that reduced restrictions created opportunities for Bermudians and largely put us on a path to considerable economic success. The only problem was that if you were not riding the wave of prosperity you were likely to eventually get caught simply trying to stay afloat. We need to find ways to return prosperity to Bermudians without pricing ourselves out of Bermuda. We need to find a path to success while creating new jobs for Bermudians and a stable new economic pillar. Leveraging special exemption zones to develop our ability to target business tourism could make it happen.