This is the story of an island, the Acqua Isle. Idyllic in nature, hardy in purpose, the remote island has survived global forces of nature. It has existed as a comforting habitat for many hundreds of years.

Its people are a hardy, serious lot devoted to life surrounded by the sea from which they draw their sustenance, transportation, commerce, and emotional fortitude. Semi-autonomously governed, Acqua islanders have always felt rigorously, independently, self-sufficient. Large percentages of them have resisted being a “island child” to an administrative parent country.

Remote island life has always been a challenge to its inhabitants. Pure planning for survival requires a unique perspective through which to view the prism of financial opportunities that are presented. Natural geographic beauty, while a balm to the spirit, is not enough if an island’s natural resources cannot support the population.

The Acqua Isle residents know the sea and its vagaries. They utilised their strengths and experience of their environment to build a significant fishing industry that for more than 70 years became the single most reliable source of revenue, foreign direct investment in the island, and provider of their quality of life.

While the population ebb and flow has over centuries settled around 45,000, as with many island and small town population patterns, there was been an gradual reduction in younger people who leave for further education and do not return. With the booming fishery industry, gross domestic product was increasing nicely at 6 per cent year-over-year, but almost full local employment could not absorb this phenomenal growth. Foreign labour was imported to augment production.

Global markets embraced this natural sea product. As time progressed in the latter part of the 20th century, island fisheries sought to increase further demand by improving technical processes. They continued to invest significantly in borrowings from local banks. Personal and company debt rose from a couple of hundred million to more than two billion in just a few years in the late 1980s.

This dependence on a single natural resource, the large focus on aquaculture and export profits because it worked and worked well, generated some complacency. And, as is often the case, the unpredictable outliers in mother nature interfered to change the course of economic history. It may not have been realised that fishing stocks are a finite resource, and that the source of production can change rapidly from geographical occurrences, competitors, economic sanctions, and market demand.

A number of swiftly occurring events happened during that timeframe to the serious detriment of the island’s living standards. Other countries acted to legislatively protect their fishing reserves to the 200-mile limit, thereby impeding access to some of the traditional fishing grounds used by the islanders. The quality and quantity of fish caught deteriorated as fish migration patterns changed, sea temperature variations and fish diseases contributed to lower stock, and more offshore fishing factories entering the business increasing competition.

Further, an international boycott of the island’s products was enacted by larger nations over fishing quotas to contain overconsumption of these natural resources. A global recession ensued that decreased market share thereby exacerbating the island’s major industry decline.

Ultimately, the island sank to crisis mode as public and private revenue evaporated. The bottom fell out of the fish market, island fish production evaporated, companies defaulted on loans and filed for bankruptcy. Banks saddled with unreclaimable debt burdens sought to stay alive by seeking government assistance. With few alternative viable products to stabilise the island’s general revenue, the economy collapsed. More than 25 per cent unemployment occurred in some areas. Thousands of islanders, between 10-15 per cent of the population, saw little prospect of employment and emigrated elsewhere.

The island’s GDP dropped by 40 per cent. The island government, by now burdened by astronomical debt above three billion (consisting of both public and private debt) with no recourse for payment, had to seek intervention from the parent country.

So, what is this story? Fiction, fact, some of both? Did I just make this up? Did the island recover? Send me your guesses.

Next week we discuss the vulnerability of an island economy in the 21st century.

One hard fact. We need foreign dollars. We need even more realistic doable plans for those dollars. We need time-sensitive concrete statistically-driven detailed researched cost-benefit and financing plans to bring new business into Bermuda. We are all waiting.

Martha Harris Myron CPA PFS JSM, Masters of Law: International Tax and Financial Services. Appointed to the Professional Tax Advisory Council, American Citizens Abroad, https://americansabroad.org/. The Pondstraddler* Life™ financial perspectives for Bermuda residents with multinational families and international connections on the Great Atlantic Pond. Contact: martha@pondstraddler.com