By Alexander Britell
Sir David Gibbons KBE is the former Premier of Bermuda. He led the United Bermuda Party government for 5 years from 1977 to 1982, in addition to having served as finance minister and Member of Parliament. Gibbons spearheaded the passage of the landmark Insurance Act in 1977. One of Bermuda’s business leaders, he has been the director of Nordic American Tanker Shipping since 1995, and has served as the CEO of Edmund Gibbons, a banking, insurance and retail company, since 1954. He was previously the chairman of Butterfield Bank and has been the chairman of Colonial Insurance Company since 1986. Gibbons, one of the most influential Bermudians, talked to Caribbean Journal about the way Bermuda interacts with the Caribbean, the state of the crucial reinsurance industry and his thoughts on the current Progressive Labour Party government.
Bermuda joined CARICOM as an associate member in 2003. How would you describe Bermuda’s economic interaction with the Caribbean?
Well, we have very little interaction other than bringing rum from Barbados and Jamaica — that’s about it. There’s no other trade, as it were. All of our trade is with the U.S., Canada, Britain, China and Europe.
What is the current state of the reinsurance industry in Bermuda?
Well Bermuda remains the world’s second-biggest reinsurance center after New York. Three or four years ago it passed the city of London and Lloyd’s, and the year before that it passed Switzerland, so the national reinsurance industry is very healthy, it’s been able to maintain its level in spite of all of these huge calamities, more recently from Japan, with the problems they had there, and the earthquakes in Australia and New Zealand and South America. In spite of that they’ve been able to meet all the demand, and the industry here is very healthy. There’s been a bit of movement abroad, because Bermuda is an expensive place to do business. So outsourcing goes to Canada in particular, a little bit to Europe.
How has Bermuda’s economy developed over the last few decades?
Well, prior to 1980, in Bermuda the majority of the GDP and whatnot was based on tourism. Now, with the huge development in the international reinsurance industry, tourism has fallen to barely 15 percent of GDP, and reinsurance over three-quarters. That represents a major change. As for tourism, now there are only a couple of major hotels that are operating, and the great majority of hotels have closed up, because people like guaranteed warm weather in the winter that they get in the Caribbean. In Bermuda, we have winter for three or four months of the year and light fires at night.
Do you think the Caribbean can diversify from tourism in the same way Bermuda did?
As far as they have concentrated basically on tourism and local production of sugar, rum and things like that, a vast majority of their GDP, a great preponderance of it is tourism. Cayman has a tremendous cruise ship business, although they do have the world’s fifth-biggest international banking center, with five or six hundred banks. But that has diminished quite considerably with the world economic slowdown in the financial areas. They’ll continue to grow certain markets like rum and do what they can do get tourism.
What do you think about Bermuda’s continued status as a British Overseas Territory? Do you think we will see an independent Bermuda at some point?
No, because the last time they had a referendum, 73 percent of Bermudians voted against independence. I have been involved with government for many years, and absolutely oppose it, because you have enormous advantages — you have completely free coverage as far as defence is concerned, as far as the British government. Look what happened in the Falkland Islands — not that we expect an invasion from Cuba or any place. We have no international defense cost — we have no cost in representing Bermuda. We are represented by Britain in the UN, and we don’t need consulates in various countries.
How would you describe today’s political situation in Bermuda?
Well, sadly, the present government is simply not competent. They don’t do any sort of a job at all of properly developing tourism. For example, in my day, we promoted golf in New England in the winter, because there’s snow all the way through Boston and New England, and people would come here and play golf in the winter. They’ve run up a huge national debt. In my day, we balanced budgets — 11 in a row. We paid the national debt and owed nothing. Now, they owe the best part of a billion dollars. I’m afraid the present Labour government is simply not competent.