Bermuda was first settled in 1609 by shipwrecked English colonists headed for Virginia. Tourism to the island to escape North American winters first developed in Victorian times. Tourism continues to be important to the island's economy, although international business has overtaken it in recent years. Bermuda has developed into a highly successful offshore financial center. A referendum on independence was soundly defeated in 1995.

HISTORICAL HIGHLIGHTS
Bermuda is an archipelago consisting of seven main islands and many smaller islands and islets lying about 1,050 kilometers (650 mi.) east of North Carolina. The main islands--with hilly terrain and subtropical climate--are clustered together and connected by bridges; they are considered to be a geographic unit and are referred to as the Island of Bermuda.

In the early 20th century, Bermuda's tourism industry began to develop and thrive; Bermuda has prospered economically since World War II. Internal self-government was bolstered by the establishment of a formal constitution in 1968; debate about independence has ensued, although a 1995 independence referendum was defeated.

ECONOMY
Bermuda has enjoyed steady economic prosperity since the end of World War II, although the island experienced a mild recession in 2001-02, paralleling the recession in the United States. Bermuda enjoys one of the highest per capita incomes in the world. Its economy is based primarily upon international business and tourism, with those two sectors accounting for more than 70% of the total balance of payments current account receipts of foreign exchange. However, the role of international business in the economy is expanding, whereas that of tourism is contracting.

U.S.-BERMUDIAN RELATIONS
Because Bermuda is a British overseas territory, U.S. policy toward the United Kingdom is the basis of U.S.-Bermudian relations. In the early 20th century, as modern transportation and communication systems developed, Bermuda became a popular destination for wealthy U.S., British, and Canadian tourists. In addition, the tariff enacted by the U.S. against its trading partners in 1930 cut off Bermuda's once-thriving agricultural export trade--primarily fresh vegetables to the United States--and helped spur the overseas territory to develop its tourist industry, which is second behind international business in terms of economic importance to the island.

Full country name: Bermuda
Area: 21 sq miles
Population: 62,997
Capital city: Hamilton (pop 15,000)
People: 61% African descent, 38% Caucasian descent, a small minority of American Indian descent
Language: English
Religion: Christian (28% Anglican, 15% Roman Catholic)
Government: Self-governing British dependency
Premier: Jennifer Smith
Head of State: Queen Elizabeth II; represented by Governor Sir John Vereker
GDP: US$1.98 billion
GDP per head: US$30,000
Inflation: 2.1%
Major industries: Tourism, finance, insurance, structural concrete products, paints, perfumes, pharmaceuticals, ship repairing
Major trading partners: USA, Canada & UK