Nick Shaxson ■ Bermuda’s offshore sector tells local dissenters to f*** off
From the excellent Financial Secrecy Media Monitor:
“Earlier this year the offshore financial sector in Bermuda launched a campaign called “Everybody’s Business” which aims to “educate Bermudians about the importance of international business to all sectors of the community”, and is sponsored by PriceWaterHouseCoopers and the Bermuda Business Development Agency. (“International business” is a euphemism for offshore finance.)”
And the latest instalment of this campaign is a column by the campaign’s leader, Cyril Whitter, in the Bermuda Royal Gazette, with the title ‘International Business – what does it owe Bermuda?’
“You will hear, from time to time, the assertion that international businesses in Bermuda should be doing more to help us with the challenges that we face as a nation.”
“It is my considered view that IB companies owe Bermuda and Bermudians absolutely nothing. They have already provided us with so much that to ask for more simply is not right.”
Which sums up the attitude that pervades offshore: a challenge to any locals who would dare to impinge on the offshore sector’s right to make as much money as possible. Back to Financial Secrecy Media monitor:
“What (the column) doesn’t mention is that Bermuda’s economy is already dominated by international finance, but hasn’t grown in five years. In fact, chances are that Bermuda may need less finance rather than more; the state of its economy looks a lot like a case of the Finance Curse.”
And this brings us to a very important point about the ‘development’ that offshore industries can bring to small islands like Bermuda.
Some people would point to Bermuda’s high GDP per capita figures, to argue that this has brought massive development to the islands.
Not so fast.
The large majority of the value added that is measured in Bermuda’s GDP figures reflects the activities of skilled (typically white, male, Anglo-Saxon) expatriates imported from overseas, on a temporary basis. Whether importing foreigners who are denied full citizenship and making them rich constitutes ‘national development’ is a matter for debate. The benefits for established indigenous populations are typically obtained through trickle-down effects and, sometimes, ‘indigenisation’ policies for foreign offshore activities – which often have the effect of scaring the world’s often rather racist hot money away.
But the point is: this ‘trickle-down’ is not what Bermuda’s GDP per capita figures reflect: not at all. If one considers the benefits to the local indigenous permanent population, stripping out the benefits obtained by the wealthy white expatriates, and the GDP per capita figures will fall to a small fraction of what the published versions say.
Bear in mind, too, that GDP measurements are significantly attributable to entities that are not Bermuda and will at some point be repatriated; there is no linkage between profits earned by international business booked in Bermuda and the domestic Bermuda economy. So don’t think this is a route to fantastic national development.
And offshore finance, as in so many other small islands, not only drives up the prices of everything locally, making other sectors less competitive, but it also leaches those sectors – along with government – of the best educated people. The industry becomes ever more of a monoculture, and it becomes ever more difficult for alternative voices to be heard.
And to protect against dissent, there is ever more impetus for shamelss, anti-social fuck-you lobbying of the kind the Financial Secrecy Media Monitor has just pointed out.