The collapse of the Berlin Wall in 1989 signalled the imminent destruction of walls around the world -- walls not only of concrete and barbed wire, but of legal statutes, cultural prejudices and political and economic doctrine. In subsequent years, agreements such as NAFTA and the Maastricht Treaty removed barriers preventing free trade and the ready movement of capital and labour.

More recently, the election of opposition candidate Vicente Fox marked the final chapter in a decade-long destruction of Mexico's one-party, socialist economy. These walls and barriers fell because the citizens (and sometimes their leaders) of Europe, North America and Mexico decided that they should.

They saw that these barriers served to reduce their employment opportunities, to limit their freedom of choice and to increase their cost of living.

In Bermuda, globalisation (meaning the destruction of local barriers) has already made much headway. The abolition of currency controls enabled Bermudians easily to travel, shop and invest abroad. Assisted by the Internet, Bermudians now take virtual tours of their vacation destinations, order goods from thousands of companies worldwide and purchase mutual funds and shares on-line. The abolition of currency controls, combined with the power of modern technology, has thus made every retail store, travel agency and investment firm in Bermuda compete with the best of those businesses abroad. The walls that previously protected these Bermudian firms, that provided jobs to their employees and a sheltered stream of income to their owners, have come tumbling down with all the suddenness and finality accompanying the fall of the Berlin Wall.

Ironically, local barriers remain in place even when firms that the barriers were intended to protect desire their removal. (Similarly, the Berlin Wall and `Iron Curtain' remained standing even after most inhabitants of the USSR and Eastern Europe had concluded that they would be better off without them.) The Bank of Bermuda, for instance, has expressly requested a waiver of the 60/40 regulations limiting the percentage of the Bank that may be owned by non-Bermudians. Although the Government appears favourably inclined to approve this request, a formal response has yet to be made. Certainly, too few Bermudians appreciate the probable consequences of the Government's approval -- or, indeed, how remarkable it is that the small Bank of Bermuda is asking to be permitted to compete in a world of mega-sized financial institutions relentlessly focused on enhancing shareholder value.

In brief, the Bank of Bermuda requires additional equity capital. It cannot raise this capital and still maintain a Bermudian ownership of 60 percent.

Consequently, the Bank intends to apply for a NASDAQ listing and to sell additional shares in the US (and elsewhere). Clearly, once the Bank has raised capital in the American markets, it will be judged by all the financial ratios and operating standards that banking analysts apply to American institutions.

Broadly speaking, even accounting for differences in size, the application of these ratios and standards to the Bank of Bermuda will show that the Bank has much to do in order to be regarded as favourably as the firms it views as its principal competitors. To get there, the Bank will be required to make substantial investments in technologies that improve both the efficiency of its employees and the ways in which its customers access its services.

In other words, the Bank will need to provide to its customers the tools and technologies available from Citibank, Bank of New York, Chase and other similar firms. Even with these technologies, successful financial performance is not guaranteed. Without them, successful performance is almost impossible.

And sub-par performance will drive down the Bank's shares and increase the likelihood that it will be compelled to seek a merger with one of its many competitors.

So, by asking the Government to waive its rules, the Bank is voluntarily "walking the plank'' into an ocean containing fierce sharks and swift currents. Why do this, especially when the Bank could choose to remain in the safe and sheltered waters of Hamilton Harbour? The fact is that the Bank of Bermuda, like scores of companies and countries around the world, has been forced to make a Hobson's Choice of sorts. On the one hand is likely decay. On the other, an uncertain future. Trapped by the status quo, the Bank will find it extremely difficult to fund its necessary technological innovation. Barring this innovation, the Bank will ultimately be unable to garner new customers and to attract and retain talented employees; its best customers will gradually desert it for other financial firms, and its earnings will fall as only its least profitable businesses remain intact. In other words, the status quo means a slow but probable death. Alternatively, a more competitive financial environment provides no assurance of success. It does, however, offer the Bank the means of adapting to and prevailing in it. At the very least, this path would seem to provide the Bank with the opportunity to negotiate a combination/alliance with one of its competitors on terms of the Bank's choosing.

Whichever of these outcomes occurs, customers of the Bank are almost certain to enjoy banking services that are clearly superior to those that they currently receive.

Indeed, it is possible that the Bank's services will actually become both better and less expensive.

Of course, one of the unpleasant consequences of globalisation is job losses.

Ross Perot campaigned relentlessly against the adoption of NAFTA, claiming that a "giant sucking sound'' would be heard as jobs headed south to Mexico.

More recently, protesters at the WTO meetings in Seattle violently expressed their concern at the prospect of losing their jobs as American companies relocate operations to countries with less expensive workforces. But what Perot and the protesters in Seattle missed is that, in a world without borders, jobs losses are inevitable if companies are prevented from adapting to the dynamic changes of the marketplace! A company prevented from adapting is a company that has written pink slips for its entire workforce and placed them in the drawer for future delivery. Only by confronting the challenges of the marketplace head-on can a company preserve and create jobs. Certainly, there is no doubt that some jobs are lost and that, for those that lose them, this can be a tragic occurrence. However, what the experience of the US shows is that there need be no net job losses. Although some types of jobs are lost, many more and better jobs are created. (It is no accident that the US unemployment rate now stands at 3.9 percent, well below the level at the time that NAFTA was signed.) For many Bermudian employees, whether CEOs or sales assistants, globalisation has therefore meant that the bar for performance has been raised. No longer is the competition solely the bank down the street or the shop around the corner.

Now, the competition consists of businesses in Munich, Madrid, Minneapolis and Mexico City. In this interconnected world, employees cannot afford to be complacent. Rather, they must constantly seek to re-invent themselves and to ensure that, as the nature of the job required of them changes, they are up to the challenge. In this way, employees can be confident that it is only their job descriptions that change.

As the Bermuda Government considers waiving/amending the 60/40 regulations (whether for the Bank of Bermuda or for other businesses), it knows several things. The Government knows that innovations in technology and finance have enabled firms around the world to reach through our fibre-optic phone lines to pluck the best business from the Island. It knows that resisting this development would be the modern equivalent of King Canute ordering the tide not to come in. The Government also knows that, with each byte, some jobs are lost but others are created. Although it is rightly concerned about the implications that globalisation has for the ill-prepared, Government should focus on the potential for economic growth, for better employment opportunities and for the lower costs to Bermudians that will result from the more competitive global marketplace.

In his book, `The Lexus and the Olive Tree', New York Times foreign affairs columnist Thomas Friedman argues that globalisation has eliminated the First World, the Second World and the Third World. Now, there are only two worlds: the Fast World -- the world of the wide open plain -- and the Slow World -- the world of those who fall by the wayside or deliberately choose to live away from the plain in a walled-off valley of their own. To be sure, with a faltering tourist trade, the Slow World does not offer much to Bermuda. Only in the Fast World, as unfamiliar and uncertain as it may be, can the Island's future be found.

Preston Hutchings, a Bermudian, is chief investment officer for finance of RenaissanceRe Holdings Ltd.