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BERMUDA | RSS PODCAST

Economic diplomacy

Finance Minister Paula Cox's announcement that she will be calling on political leaders in Washington, DC is to be welcomed. It is a relief to see that someone is finally starting to take the damage done to Bermuda's reputation in the past couple of years seriously.

For the last few months, Bermuda has been subjected to a daily drumbeat of criticism from presidential candidates, compounded by years of negative press. This has gone unanswered, either because the Government does not how to respond to it, or because it does not wish to.

Thus Bermuda has reached the point where just yesterday, Democratic presidential candidate John Kerry said: "... If I'm president our government won't provide a single reward for shipping our jobs overseas, or exploiting the tax code to go to Bermuda to avoid paying taxes while sticking the American people with the bill."

Political candidates have discovered that it is easy to put the idea of "outsourcing" jobs and headquarters together and clearly it resonates with voters, or Sen. Kerry and others would not keep doing it.

Never mind that the two have nothing to do with each other, or that those few companies that have redomiciled to Bermuda have done so to regain their competitive advantage against global competitors whose parent governments do not tax their overseas earnings as the US does.

The bigger problem is that those companies ? whose contribution to Bermuda is minimal ? are drawing political heat that is doing untold damage to the Island's overall reputation as an international business centre.

At the same time, Bermuda has allowed its political capital in Washington to shrink and shrink ever since former Premier Sir John Swan left office.

The point here is that these relationships must be nurtured and cared for not for any immediate gain, but against the time when they are needed. For the same reason, local politicians who insult the US President or cosy up to Cuba might as well be flushing the Bermuda economy down the toilet for all the good they are doing.

So Ms Cox's announcement is timely. But this should not be a matter of going to Washington once, doing the rounds and coming back home.

Instead, a clearly defined message, outlining Bermuda's importance as an international financial centre, its contribution to the world reinsurance market, its intense anti-money-laundering and tax evasion efforts and its long history as a friend and ally of the United States, needs to be put together in order to persuade America's leaders that Bermuda is not some kind of menace to the US economy.

This also needs to be a non-partisan effort, led by Ms Cox and Premier Alex Scott, but supported by the Opposition, private business and other friends of Bermuda who can speak with one voice.

This is not a lobbying effort that will succeed overnight, and it is not one that should adversarial or so high profile that it is self-defeating. but the aim should be to educate US leaders on the good work that Bermuda does.

To be sure, much that is being said now is political rhetoric, but it should not be assumed that it will go away after the November elections. That's because, having gone unanswered, this has gone from rhetoric to accepted fact when it is assuredly not.