Much debate on Independence has focused on its costs -- but little has been said about the prospects for the Island's economy. In the penultimate story in its series on Independence before tomorrow's referendum, The Royal Gazette finds views on the economy are very much a matter of oprinion.

Would Bermuda's economy be better off with Independence? Finance Minister Dr. David Saul admits it would not. On the other hand, there was nothing to indicate Bermuda would be worse off under Independence either.

Where money is concerned, he says, confidence is the bottom line.

Bermuda has always managed its money well, he claims. Countries that became indebted after Independence demonstrated irresponsible fiscal behaviour.

But good governments that did their job well would continue to attract international business, independent or not.

Anti-Independence proponent Bank of Bermuda Chairman Mr. Eldon Trimingham agrees "perception is everything''.

But, he says, international companies simply look at the poor track records of other Caribbean countries that opted for independence.

"They don't ask how or why it all happened. They just know they went Independent and ran into trouble. They look at the options and see that Bermuda is top of the list because it is backed up by a major power.

"The stance taken in the Government's Green Paper is that providing everything goes right, everything will be all right,'' Mr. Trimingham says.

The question, he says, is what if it doesn't? While the issue of cost has dominated the Independence debate, the overall economic health of an Independent Bermuda has more far reaching implications.

The effects on international businesses and tourism, and the stability of the dollar have been the subject of heated discussion both on the floor of the House of Assembly, among the Island's financial sectors and overseas.

Government's Green Paper is upbeat on the subject of the economy but has been criticised for painting an unrealistically rosy picture.

Independence opponents like the Hon. Clarence Terceira have pointed to the economic downfall of Caribbean islands bigger than Bermuda with other incomes besides tourism and exempt company business, as reasons for Bermuda maintaining the status quo.

Anti-independencites cite the value of the Jamaican dollar which plunged from $1.20 to 2.9 cents with Independence or the Bahamas that is now saddled with a national debt in excess of $1 billion.

And while they say Independence may not be entirely to blame in every case, countries that have opted to cut ties with Britain have suffered initial periods of political and economic instability that some would claim they are still paying for.

The Green Paper's section on economy and finance opens with an overview of the Island's current financial health. The Island, it claims, is one of the top ten of the world's richest countries on a per capita basis with a Gross Domestic Product of $1,863.5 million.

Bermuda's credit rating is AA1 as set by US Credit Agency, Moody's meaning the Island is presently in a strong position to negotiate loans with favourable interest rates.

A statutory sinking fund obliges Government to set aside 2.5 percent of the public debt outstanding at the end of the preceding year to pay back the principal sum borrowed.

Ministry of Finance statistics showed that while other Caribbean islands are strangled by enormous debts (the annual interest of which, in some cases, equals Bermuda's budget for a year) Bermuda last year owed $6 million interest on a $100,000 million debt.

With Independence, the Green Paper states the legal status of the Bermuda Monetary Authority would remain the same. The BMA is an independent authority that fulfils the role of a central bank in supervising the country's banks and financial institutions. In the event of Independence, it would remain "totally unaffected'', says Finance Minister Dr. David Saul.

Responding to the claim that the Bermuda dollar would devalue under Independence, Dr. Saul claimed this would never happen.

"That is quite simply a myth,'' he said.

The value of the Bermuda dollar which has been fixed at a par with the US dollar, has been enshrined in law under the Bermudian Dollar Parity Order 1981. According to Dr. Saul, there would be no economic reason to change this if Bermuda hit hard financial times under Independence or not.

"Devaluating the dollar would not help. There would just be less dollars around and we would all just tighten our belts,'' he said. "Since we export nothing devaluation of the dollar would be redundant. It could only be the case if we sold material things abroad.'' But Bermuda's recently acquired membership with the "rich man's club'' -- Organisation of Economic Cooperative and Development (OECD) would lapse with Independence.

Bermuda was invited in under the wing of the United Kingdom but as an independent country, the Island would be an unlikely candidate for the OECD.

Although Bermuda has been a member for less than a year, association with the OECD could mean more favourable interest rates and is a "good housekeeping seal of approval'', according to Dr. Saul.

But it is the fear that Bermuda's long courted international business sector -- now responsible for more than half the island's foreign currency earnings -- could pull out a moment's notice if political instability followed Independence that most frightens anti-Independence.

The Green Paper admits this boils down to a question of confidence.

"If there were a loss of confidence, Independence for Bermuda, at least temporarily, would almost certainly have an adverse effect on international business,'' the paper states.

But, it continues, "confidence per se, should not diminish on independence''.

This was because there would be no change in the legal system and the option for right of appeal to Britain's Privy Council. Bermuda also had the capacity to quell civil unrest and politicians were aware of the need for political and social stability.

Progressive Labour Party Shadow Minister of Finance Mr. Eugene Cox agrees that the reaction of the international business sector hangs on the political stability of the Island.

"As long as Bermuda is politically stable, I don't see that there would be any problems with international companies taking flight. If Independence was achieved the right way by bringing people together and educating them properly on Independence, I don't think Independence would impact Bermuda adversely. It would even enhance the economy.'' Debt, he said, was not an inevitable outcome of Independence.

"We have always managed our affairs better than other countries,'' he said.

Little, however, has been said about the impact on tourism, the other pillar of the economy, under Independence.

The Green Paper states it was unlikely there would be any diminution in Bermuda's British atmosphere popular with North American visitors. Inherited traditions such as Parliament, the Judiciary, the Regiment and Police would remain the same under Independence.

"Tourists who come to Bermuda will continue to come,'' said Dr. Saul. "I don't think Independence would have a major effect on them.'' But Tourism Minister the Hon. C.V. (Jim) Woolridge disagrees. If the economy slackened and social and other standards fell, Bermuda would no longer be a desirable holiday destination, he claims.

Asked if he thought the economy would improve with Independence, Mr. Woolridge gave an outright "no''.

"Independence will be a drain on the purse strings of every man, woman and child,'' he said.