The cool breezes that we so enjoy during Christmas time in the Cayman Islands have a way of clearing our minds for the start of a New Year. They bring refreshment and clarity, purpose and determination, and they stir our sense of expectation – and of hope – with regard to the birthday of Christ, and the exchange of gifts which commemorates the Holy Birth, as well as stirring hopes for the coming year.
 
But realising this hope – turning it into reality – does require work; you know we say that God helps those who help themselves.
 
In terms of governance, this work involves choosing – from the many ways of approaching the problems we face, and the many
concerns that must be taken into consideration, what ultimately will be best for the country.
 
For 2012, my hope is that these many tributaries of thought – flowing from government, the private sector, and the more than 50,000 people who call the Cayman Islands home – will come together and become a force for change for good in our country.
 
We made good progress in 2011. Now, the quest is to keep focused on key national goals that are within reach: A growing economy; stronger infrastructure; and stable financials for government, and I dare say, for individuals. If we stay focused and work collectively toward these goals, we will have a country that is better for Caymanians. However, I can assure the entire public that our hopes will not be realized if we rely on our resources alone. By that I mean that we must watch, and pray. It has been proven many a time that it is only when we truly accept our limitations that we can find the true depths of our strengths.
Despite some of the challenges that we are facing – and addressing – I believe the people of this country understand that our Islands are well positioned for economic growth; we are well positioned for investment, both local and foreign. I am pleased to say that, as we have in times past, the Cayman Islands has again demonstrated forward thinking and innovation for a Caribbean country. The steps we have taken to strengthen our economy are unprecedented in the region – including the establishment of the first special economic zone in the Caribbean.
Cayman Enterprise City has made great strides since I announced the signing of the MOU, only 11 short months ago, at the Business Outlook Conference. The accomplishments of the CEC development team, government, and the civil service – who have worked together to achieve so much in such a short timeframe – are extraordinary.
 
The CEC zone is now operational; and the Special Economic Zones Law passed the Legislative Assembly in September. Furthermore, the Special Economic Zone Authority had its first meeting last week, and it is prepared to license the first zone companies in January 2012. Thus far 11 Caymanians have been employed at Cayman Enterprise City.
 
This project has earned support because the public see the multitude of opportunities this project brings to these Islands. They see the benefit of direct foreign investment and the creation of a third, technology-based pillar to our economy. They see the new educational and job opportunities for our youth. And they see the expansion and creation of new markets for local businesses.
This is what we promised.
 
Turning to healthcare and foreign investment, Cayman is closer today to realising the benefits of the Narayana Cayman University Medical Centre, which represents another first for the Caribbean in the form of medical tourism and medical excellence. The medical centre, with its planned 2,000 beds to be built over 15 years, is poised to become another strong support for the Cayman
economy.
 
Government has finalised most legal and regulatory issues for the medical centre, and it expects to complete the remaining matters during the first quarter of this year. Property for the medical centre has been purchased in East End, and it is now in the process of being subdivided.
 
Narayana Cayman University Medical Centre is expected to submit to Planning approval early this year, and the project is slated to commence before the middle of this year.
 
Moving from foreign to local investment, I also am pleased to lend strong support to the Health Ministry, as they both strive to make healthcare more efficient and cost-effective, and, crucially, renew their focus on preventative care, and encouragement of healthy and active lifestyles. Not all of us can be Olympic athletes, like those young persons headed for London 2012, of whom we
are so proud – but we can learn from their dedication, and also encourage other young people to adopt them as role models.
 
I can also note very positive progress in the ForCayman Investment Alliance project. This initiative is moving ahead with the recent agreement signed by government, through the Cabinet Office and the National Roads Authority; and Dart Realty.
 
Because of this agreement, Dart Realty will invest $35.2 million in our roads infrastructure, beginning with the relocation of about 2,500 feet of West Bay Road, between Coutts and Yacht Club. It also will commence the redevelopment of the hotel property that was held by Courtyard Marriott, with an estimated minimum investment of $50 million to $80 million.
 
This plan will accomplish four important objectives for the country. First, it will provide a more protected roadway during bad weather, including hurricanes, as that current stretch of the road is quite vulnerable to flooding and other damage.
 
And second, as we all know we only have one road to West Bay. It will give West Bayers a second road to and from West Bay. This must and will
enhance our quality of life. Third, it will provide better access to the hotel property, which will improve its financial viability. Better financial viability, of course, leads to economic growth and stable employment.
 
The fourth objective, and one that is very noteworthy, is that relocating a portion of the road will enhance and expand the Public Beach, and allow improved public facilities such as safe play areas for children, cabanas, outdoor grills and parking.
 
It’s been well publicised that Dart has also released $5 million for community investment. This amount will be divided between the Saving Homes, Save the Mortgage, and education projects. In these hard economic times I am particularly pleased to be able to offer our people assistance to help them save their homes. There can be no better objective for the programme than to save a home.
 
A committee has been established to administer the programme. With assistance from banks that holds the specific mortgages, this committee will assess the applications and, for those which merit assistance, award up to an initial $12,000, with the possibility of subsequent assistance for up to three mortgage payments.
 
However, the total of the funds awarded will not exceed $20,000 each and – this is important to emphasise – these sums will all be paid directly to the successful applicants’ banks.
 
At the same time, we have been working hard, through the Ministry for Housing, to provide affordable houses for families. Thus far we have built 67 houses.
The roads and the community investments are moving forward in advance of the signing of the ForCayman main agreement. In other words, these investments are made in good faith, and in continuation of the significant contributions that the Dart Group of Companies has made over the years, for the betterment of our country.
 
As I said while announcing the ForCayman Investment Alliance agreement just a few weeks ago, the Cayman Islands does not have the luxury of waiting for the economy to turn around. We must act now. I trust that the people of these Islands recognise how fortunate we are, to have the good relationships with private-sector groups such as CEC, Narayana Cayman University Medical
Centre, and Dart that allow these partnerships to move past the discussion stage, past the “would be nice to have” stage. All three of these investments, representing both foreign and local confidence in the Cayman Islands, are well on their way to becoming a beneficial reality for the country.
 
Ladies and gentlemen, I’ve just given a brief outline of the major foreign and local investment initiatives that are underway,
and now I ask for your attention as I speak about accomplishments in the tourism sector – one of our longstanding economic pillars.
 
The benefits of foreign and local investment, and good infrastructure, are apparent to persons who live here, and I trust that the benefits of our tourism industry are also well recognised. Many destinations provide sun, sand and sea, yes; but people who travel also appreciate destinations that have stable economies and good infrastructure; these things enhance their visit.
 
In tourism, government’s strategies and policies have ensured that our tourism industry has held strong and thrived. In 2011 air arrivals increased month over month, keeping us on target not to just achieve our goals, but to exceed them. I am optimistic that the 2011 end-of-year figures will confirm that, for the first time since 2008, the Cayman Islands will have welcomed more than 300,000 stayover visitors to our shores. This accomplishment is all the more meritorious when compared with some of our Caribbean neighbours, which have unfortunately registered declines in arrivals over the same period.
 
In addition to the encouraging arrival statistics, our Islands received several rave reviews throughout 2011 for which we can be justifiably proud. Accolades such as these are irrefutable evidence that our tourism industry is rebounding. This is a crucial but exciting time in tourism and throughout 2012, my government and our private sector partners will continue implementing innovative new initiatives
that will further enhance the positive trend, and maintain the growth and sustainability of this important economic pillar.  Included in this will be a Market by the Sea in West Bay, where local craft and produce can be sold.
 
The Ministry for Culture will also support our economic and cultural sustainability through the new purpose built National Gallery, and continued protection of our beautiful physical environment. Together with foreign and local investment, and continuously improving infrastructure, tourism helps to strengthen the platform upon which our country’s economy is built.
 
 
I touched on an infrastructure initiative, when speaking about the ForCayman Alliance Investment and its roads proposal, but there are other noteworthy infrastructure projects in development. Seaport and airport facilities; road works in addition to those planned for West Bay Road; and the radar tower are some of the significant projects that I’d like to remind you about today.
 
We shall also be pleased as a Government, to extend the decreased rates on import duties for construction materials, following a year of success of this measure, which produced an increase in the rates of importation of these goods. This has clearly been an effective economic stimulus initiative.
 
I shall also be mentioning some projects that are planned for the Sister Islands; again significant, in terms of economic stimulus.
 
Government and the Port Authority of the Cayman Islands are in advanced negotiations with China Harbour Engineering Company to develop cruise tourism facilities at the George Town Port; supplementary cruise facilities at Spotts and Cayman Turtle Farm; and purpose-built amenities to enhance the Turtle Farm.
China Harbour is the only developer to show interest in such a broad-based partnership for seaport facilities, and they have the capability of financing the developments on the most favourable terms.
 
The Cayman Islands Government and the Port Authority have subsequently engaged KPMG to prepare the business and value for money case required for our due diligence.
 
Government is also pressing forward with strategic local facilities, including a boat ramp and parking lot at Coe Wood Beach in Bodden Town. This will help serve our local population, allowing them better access to the sea while improving the aesthetics of the area.
 
Our airports facilities are also overdue for upgrades; members of the public identified this need years ago and today, we are closer than ever to significantly improving both the Owen Roberts and the Gerrard Smith airports. Master plans have been drawn up to meet the needs of resident and visiting air travelers for the medium term. Residents on Cayman Brac will be gratified to know that the Cayman Islands Airports Authority plans to redevelop Gerrard Smith to enable international flights. This work should start in the first quarter of 2012.
 
While the cruise facilities will improve the journey for seafaring folk, and the airports facilities will improve conditions for those who take to the skies, it’s also important to improve the roadways. With this in mind, government plans to reduce West Bay Road to 25 mph, and to install pedestrian crossings at The Strand and the Westin Hotel areas, to improve safety conditions for
both pedestrian and vehicular traffic.
 
This year the Blue Iguana Reserve Access Road – now officially named Colliers Wilderness Drive – will be completed, and the Asphalt Road Programme in Cayman Brac will continue.
 
Lastly, as has been well publicised, the new Traffic Law is now in effect,
having been passed in the Legislative Assembly and assented to by His Excellency the Governor.
 
In 2012 Cayman will also have the benefit of a new radar tower. Construction is to commence in early February, and completion is expected by late summer.
 
You will have noticed that some of these infrastructure initiatives I’ve mentioned are geared toward improving the economy on the Sister Islands. Of course, an economic benefit to one of our islands is an economic benefit for all three; with this in mind, for 2012, government has a number of plans for Cayman Brac and Little Cayman.
 
Eight affordable homes will be constructed under the oversight of the Sister Islands Affordable Housing Development Corporation: four in Watering Place, and four in West End. Construction work will continue on the Brac Emergency Facility, and commence on the Little Cayman Emergency Command Centre.
 
Ladies and gentlemen, to recap, I’ve talked about the economy, in terms of foreign and local investment, and tourism; and I’ve outlined infrastructure initiatives. This leads me to government’s third goal for 2012: Stable financials.
 
At the start of this government’s term in May 2009, the entire public sector deficit – this includes central government, statutory bodies, and government-owned companies – was $81 million.
 
Common sense tells us that this deficit, combined with the effects of the economic downturn, would be difficult to overcome; but today I am very pleased to say that the state of public finances has been steadily improving since May 2009. Let me demonstrate this improvement with a “before and after May 2009” comparison.
 
Over its four-year term of governing, the previous administration borrowed and caused to be borrowed a total of $591 million. When I left executive office in 2005, central government’s public debt balance was $156 million at 30 June 2005.
 
In my government’s first two years in office, we had to borrow $260 million and the vast majority of the borrowing was to continue a capital programme started by the previous government that could not be stopped without serious adverse financial consequences.
 
In the current fiscal year that will end on 30 June 2012, government will not borrow, and the same position applies for the year that will end on 30 June 2013. I therefore expect that during the present government’s four-year term, there won’t be any borrowing.
 
Although we have reduced governments debt, the message with respect to borrowings is clear: The present government minimizes and avoids borrowing wherever possible, whereas the previous government significantly increased the country’s public debt during its term. They started two schools at a cost of $100 million each, without planning, or the funds to pay for them. Plus the government administration building.
 
Continuing on with our quest to improve public finances, in November 2011 and on behalf of government, I signed a Framework for Fiscal Responsibility – or FFR – with the UK Government.
 
One of the key features of the FFR is that the decision-making criteria, by which government assesses its borrowing plans, are stricter than past years. Government believes that minimizing debt is sensible and beneficial.
 
We know very well the difficulties certain European countries are now experiencing as a result of high debt levels. Government does not ever wish to see the Cayman Islands experience such problems because of increasing debt.
 
Importantly, I must state categorically that the FFR does not owe its origin to concerns over a particular project – instead, the laudable and noble pursuit of improving the state of public finances in general, is the origin of the FFR.
 
In terms of reversing a deficit situation of the previous administration, the present government has done well. In respect of the year ended 30 June 2011, central government achieved an unaudited surplus of $20.6 million. Moreover, statutory authorities and government-owned companies also did well: they achieved an unaudited net surplus of $2.8 million. Therefore, for the year ended 30 June 2011, the entire public sector had a surplus of $23.4 million.
 
It is on the basis of the surplus achieved in the previous fiscal year that I kept my promise and government rewarded civil servants for their hard work by reinstating the 3.2% cost of living adjustment that was previously removed from civil servants’ emoluments in 2010.
 
I am extremely pleased also that with the assistance of the Deputy Governor and the Pensions Board, new Regulations have now been passed whereby “a Caymanian already in receipt of an ex-gratia pension will be eligible to have that
revised either from:
* $200p.m. to $300p.m. for a Caymanian who has served four (4) or more years but less than ten (10) years; or
* $300p.m. to the minimum of $450p.m. for a Caymanian who has served ten (10) or more years.
 
For some of these Caymanians, who have worked for over 15, 20 or even 25 years without any entitlement, the new method of determining their ex-gratia pension based on their period of service and salary at the end will translate into a nice, well deserved increase.
 
The best affirmation of the financial information I have presented comes in the form of an 8 December 2011 report on the Cayman Islands by Moody’s, which maintains the very high rating of Aa3 for the Cayman Islands. This is a rating that the Islands have kept since the 1980s.
 
The maintenance of such a very high rating, at a time when some advanced countries have received rating downgrades and others have been put on a negative outlook, is clear evidence that Moody’s, as a highly reputed independent assessor, is satisfied that these Islands – and by extension, the present government – is managing its financial affairs in a responsible manner.
 
I am confident that the “before’ and after May 2009” comparison that I have provided, along with the independent view of Moody’s on the Cayman Islands, serve to prove that public finances in the Cayman Islands have been improved by the present government, and there is more improvement that is possible under the present government. In spite of the Opposition’s claim that all of the
things that I had done were going to cause the ratings to drop, we have remained steadfast and are holding the fort! This is good management!
 
So while at the end of 2011, as the world slowly and painfully strives to stave off its economic problems, we in Cayman must take steps to protect and strengthen what we have. I believe that as a country – as a matter of fact, as every man, woman and child – we can wisely apply the lessons of yesterday to whatever situation we face in 2012.
 
Therefore, government’s plan for the New Year is to build a stronger economy, stronger infrastructure, and stronger financials by carrying through the plans that we announced and those that we have started. The overarching goal is to create more employment opportunities; to work with the private sector and build a country in which no Caymanian can say they cannot find employment that allows them to meet their responsibilities. While government will always assist those who find themselves in true need, the pride of Cayman is one of being self sufficient. In a difficult economy, this is not always possible, despite one’s best efforts. But we all must make the effort.
 
It is time for us, as a country and as individuals, to think critically, speak wisely, and act prudently. We all must reassess how we approach our economics – in other words, our budgets. We can do this without losing our sense of who we are; in fact, it will help us to regain what has perhaps been forgotten. It can strengthen our identity, our core values, which have been under increasing pressure not for the past few years, but for generations.
 
A number of key steps will be taken towards consolidation of our core values.
* Government will continue the development of a policy framework for a Food and Nutrition Council with a focus on Food Safety and
Food Security
* The development of the National Energy Policy framework will be continued; and
* A property asset re-evaluation project will be started by March 2012
The economy is turning and things will get better. I speak in particular to our people especially our young people that when the economy changes for the better they will make money – they must save some of it, think about what is a priority and save your money. We know what happens to everyone when times are rough and you find yourself in need – sometimes dire need. So make a plan
on your expenditure prioritize it and save.
 
This year the Government will conclude our negotiations of the Water Authority 25 year lease – and our divestment of the sewerage system development. This has been agreed to by the UK.
 
I also encourage young people to take full advantage of all that is available, to gain further and higher education. Currently the Ministry of Education has 371 students on overseas scholarship and 506 Students on local scholarship.
The 371 overseas scholarships include students pursuing: Associate, Bachelor, Master and Doctorate programmes as well as vocational technical programmes in automotive studies and ship building. Overseas special education needs students are also included in this number.
 
The 506 local scholarships include students pursuing: A’ Levels, Certificate, Associate, Bachelor & Master degree programmes. Many of our local students are not just young people coming out of high school but mature persons who still have the desire to further their education to better themselves and their families.
 
My own Ministry sponsors 45 Tourism scholarships, in addition to an apprenticeship programme; and under the Young Nation Builders Programme has 90 students on scholarship, as well as sponsoring after-school programmes in traditional crafts, musical and performance skills development. Funds are committed to this annually and this will increase as the new Hospitality School comes on stream within 2012.
 
The cool fresh breeze is blowing; our purpose is becoming clearer. My wish for us all, in 2012, is that we will come together and become a force for change – positive change – in our country.
Let us all now in the New Year do as His Majesty the late King George 6th said in his famous 1939 New Year’s message:
 
“And I said to the man who stood at the gate of the year: Give me a light that I may tread safely into the unknown. And he replied: Go out into the darkness and put your hand into the hand of God. That shall be to you better than light, and safer than a known way.”
 
This was true then, it is still the best advice today.
 
God bless us all and, on behalf of government, I wish every resident in the Cayman Islands all the best for the New Year. Good health, good friends, peace, joy and hope.