Bermuda can be the Dubai/Singapore of the Atlantic
By Scott Neil
A man who heads a US investment company that is reaping success in emerging markets and natural resources has put his focus on Bermuda.
And from his own acute observations of what brings results to places as far-flung as Hong Kong, Singapore, Dubai and Dublin he believes he can see what is missing from the Bermuda equation - world class education.
Frank Holmes, whose Texas-based fund business has $4.5 billion under management, calls it the "DNA of success."
It is something that can be observed running through the powerhouse economies and jurisdictions of the world, he explained.
As a lead-in to what that DNA is, he referred to the late economist Simon Kuznets who is regarded as the grandfather of the Gross National Product economic measurement.
"He did research into emerging economies and said that when you have policies for infrastructure, trains, ports, subways, etc, that create jobs that will last for 20 years and then are followed by the building of hotels around that infrastructure," said Mr. Holmes.
That is what is happening in the emerging economies, with China building cities that are based on copies of Hong Kong and Singapore, with Dubai expanding at a vast rate in a similar fashion to Singapore and now with Saudi Arabia seeking to create four "Dubai-like" cities.
As all these countries advance they do so in tandem with a programme of ensuring world-class education is on tap for the local population to give them the skills and qualifications needed to fill many of the best jobs that are created.
Highlighting the emergence of Ireland as one of the most dynamic of Europe's economies, he observes: "They got all their children learning two languages at school. Global companies were then attracted to Ireland because it had an educated workforce that was largely bi-lingual allowing them to do business in countries across Europe.
"What you need to have are tax-free zones and education."
That's what the emerging powerful economies and cities are doing and as an example Mr. Holmes points to Dubai where famed US institutions Howard University and Massachussetts Institute of Technology are setting up world class satellite campuses.
"So you can turn around and ask Bermuda isn't so far off the economic make-up of Dubai, Singapore and others with an 80 percent reliance on business and 20 percent on tourism, Mr. Holmes points out.
"You can see the successful models. Bermuda could become the next Singapore of Dubai of the Atlantic."
Bermuda also needs to look at it's future energy needs and partnerships.
He hit on a topic of the day for many, with national energy provider Belco planning to expand its oil-fired power station. But with the cost of oil around the world already bumping around the $100 a barrel region there seems little likelihood of it going back to the $50 or $60 per barrel level.
Mr. Holmes' company US Global Investors keeps a close watch on fluctuations in the commodity prices for natural resources and funds linked to emerging economies particularly those in the Far East, led by China and India.
As those countries seek out raw materials to drive their rocketing economies, they are in direct competition with the US and others.
A scarcity of supply compared with huge demand pushes commodity prices higher. At the moment it is estimated China needs to consume 36 percent of a $1 trillion demand for resources by the emerging markets, next come Russia (16 percent), the Gulf countries (13 percent) and India (10 percent).
Population boom and increasing prosperity are the driving forces. All this time the US is having to go up against the others to try and secure its requirements.
For the US things are not so rosy. China and India can run their economies using two barrels of oil per person, Mexico uses seven per person, but the US consumes a whopping 25 barrels per person to keep itself moving, Mr. Holmes reports.
That is something Bermuda must also keep in mind.
Further information about San Antonio-based US Global can be found at www.usfunds.com
