Hamilton.

So much so, that five years ago, international business surpassed tourism to become our leading industry.

According to Finance Minister Grant Gibbons: "It was probably in about 1992 that foreign currency earnings from business surpassed those of tourism. And they're growing steadily with a particularly strong growth since 1990.'' In 1995, he said, Government reported that $193 million of tax came directly and indirectly from international business, comparing with $153 million from tourism related sources.

"We wouldn't have the standard of living that we have today if we didn't have international business. Another positive contribution it's made is the construction industry with the building boom. Obviously some of that is directly attributed to the demand by businesses for office space. But one thing which has been made very clear in the past few years, it that we need both sectors, business and tourism -- one doesn't work without the other.

"International business doesn't always move in synch with tourism. Tourism could be down and international business could be up and vice versa. It has a stabilising effect on our economy. However I do think international business is responsible for getting us through the difficult years of recession as it tended to increase at that time. And one didn't have to work in international business to be positively affected by it.'' According to Dr. Gibbons, the first off-shore company was registered locally in 1935, a subsidiary of the Lifesaver Company. The captive insurance market came about some 40 years ago, greatly contributing to the growth of international business.

Today, the insurance part of business represents 50 percent of the foreign currency earnings of international business, something which has evolved quite dramatically. Twenty five years ago, Bermuda was mostly a jurisdiction for captive insurance. In the mid-80's, ACE and XL with excess liability and direct and officer's insurance came along. Companies then began to add finite insurance and most recently, property catastrophe insurance has contributed to the wealth of offices on the insurance side.

"Most of the data we rely on comes from an Archer Study,'' explained the Minister. "It's an independent means of collecting data which allows us to keep track of any growth from year to year. It's also helpful also because it shows the number of jobs involved, and the percentage of those which are physically present companies as opposed to those which are managed through a law office or an accounting firm.'' The last study, he said, was done in 1995 and shows that of 9,515 companies registered locally, only about three percent of those are physically present on the Island. That three percent contributes 84 percent of expenditure to Bermuda.

Although well positioned right now, there are many changes in global financial business to which the Island is susceptible; changes in on-shore regulations such as the taxing of captive insurance companies by the US and the UK Governments. Any changes could dramatically affect the attractiveness of doing business in Bermuda, he said.

"I think we have tremendous opportunities in international business to continue at a strong growth rate. One of the issues we're thinking through, is what sort of provisions one has to make for the future. For example, housing and training. Are we making sure that when our children go through school they understand the opportunities there and are later taking the right courses and getting Business boom appropriate training to take their place in international business?'' In 1995, he said, it was estimated that $5.7 million in scholarship funds were donated by international business for the training of Bermudians.

"There's clearly a lot more choices available to businesses today than 25 years ago and as with tourists, Bermuda has to continually understand what the needs and the issues are that are important to the visitor or the international business. The way we do that is through talking with the Bermuda International Business Association and international companies. It doesn't mean we're always able to provide what they are looking for, but we can be responsible and try our best to accommodate those needs, otherwise it might be at our peril.'' Dr. Grant Gibbons GOVERNMENT GVT 100 YEARS ANNIVERSARY ANN