Politicians everywhere must redefine their thinking if their countries are to reap the benefits of the global economy. The motto of successful politicians used to be "think locally and act globally''. However, there has been a shift in political thought, politicians now must "think globally and act locally''.

Our leaders in politics, business and the trade unions have to be conscious of the external changes that are affecting our ability to maintain the standard of living we now take for granted. If we fail to recognise these changes, our competitors in both international business and tourism will take advantage of our inflexibility and self-centred attitude in order to attract business away from us. Either we embrace this reality with energy and foresight or we risk destroying our economy. Bermuda as a service-based economy cannot afford to isolate itself from the realities of the new global economic order.

The corner stone of the Government's policy is social justice -- social justice cannot be truly realised without moral conviction coupled with a strong economy. Unless social justice is built on a solid foundation of both economic growth and moral conviction, social justice is doomed to fail.

In this, a truly global world the preeminence of national governments in a broad range of public policy issues has declined over the past decade due to the influence of domestic and international organisations. It is an irrevocable fact that governments increasingly share power with non-governmental organisations, both locally and internationally. There are a number of reasons to explain this global trend towards power-sharing: 1) The challenge of legislatures to cope with a new range of threats that respect no political boundaries (environmental degradation, narcotics, crime, corruption, terrorism, to name but a few) and do not differentiate between foreign and domestic policy; 2) Information technology which transcends borders, collects and manages information independently of governments, facilitates electronic commerce and the further spread of international standardisation and regulation of business practices, values and nomenclature; 3) The ease of travel and other forms of communication is contributing to the rapidly growing globalisation of trade services which in turn is creating a growing commonality of popular taste; gradually and unevenly we are all moving toward a world of consumer dominance rather than producer dominance, a horizontal world that legislatures will find increasingly difficult to scrutinise and regulate; 4) Private capital flows now far exceed the value of trade in goods and services as a result of technology, which is transferring financial influence from governments to the international marketplace; the global economy forces national governments into fiscal responsibility; domestic legislation is no longer the exclusive preserve of national legislatures but rather are greatly influenced by the global economy, local collectives and supra-national organisations; and 5) International decision-making is seen as contributing to what has been called the "democratic deficit'' of power moving from elected assemblies to unelected international organisations. For example, when countries borrow money from the World Bank and/or the International Monetary Fund, these organisations virtually dictate the countries economic policies. The OECD and the G7 can insist that countries have certain laws and regulations that govern their economies. The countries that fail to pass and enforce these laws and regulations would more than likely have a difficult time economically. The OECD can penalise a country that does not comply with international economic norms.

On the eve of President Clinton's inaugural visit to Canada, Canadian newspapers and Canadians were not talking about the US President's visit, instead they were talking about the visit that had just been made to Canada by the Man from Moody's. A team from Moody's had just come to Ottawa and read the riot act to the Canadian Finance Ministry and legislators. The Moody's team told them that if they did not get their deficit-to-GDP ratio more in line with international norms and expectations, Moody's would downgrade their triple A credit rating and therefore Canada and every Canadian company would have to pay higher interest rates to borrow from abroad.

To emphasise that point Canada's Finance Ministry issued a statement declaring: "The sheer magnitude of Canada's foreign debt in relation to the size of the economy means that Canada has become excessively vulnerable to the volatile sentiment of global financial markets. We have suffered a tangible loss of economic sovereignty.'' For those Canadians who might not have gotten the point, Finance Minister Paul Martin put it more bluntly; "We are in hock up to our eyeballs''. No, the Canadians were not the least bit interested in the US President's visit. It was the Man from Moody's who had their undivided attention.

What is Moody's and how did it become such a formidable force as to be able to exert such a powerful influence on nation-states? Moody's Investors Service is the international credit rating agency which rates economics all over the world on a sliding scale with grades of A, B and C (each letter with degradations A etc) so that global investors know who is pursuing sound economics and who is not. If your economy gets a lower rating it means you will have to pay higher interest rates for international loans. Moody's is the international organisation that rates Bermuda's economy. Moody's rating virtually determines how much interest we pay and the extent of our borrowing overseas.

Internationally the Bermuda Government shares power with the British Government, the OECD, the G7, Moody's, the European Union, the Privy Council and other international organisations. Locally, the Bermuda Government shares power with the trade union movement, The Hotel Association, The Chamber of Commerce, BIBA and other international organisations.

The sharing of power is not a sign of weakness but the reality that we must embrace this reality with energy and foresight. Our economic growth, our standard of living and the social programmes we establish for all Bermudians especially those who are most vulnerable socially and economically will be linked increasingly to this shared concept of governing.

Sir John Swan was Premier of Bermuda from 1982 until 1985.

Sir John Swan