Speech to JMC week dinner by Premier Hon. Alden McLaughlin, MBE, JP, MLA

26 November, 2013

My Lords and Ladies, Your Excellencies, Members of Parliament, Your Excellency, Mrs. Helen Kilpatrick, Governor of the Cayman Islands, my colleague minister from the Cayman Islands, Hon. Wayne Panton, Cabinet Secretary, Samuel Rose, Chief Officer Jennifer Ahearn, Director General of the Cayman Islands Civil Aviation Authority, Mr. Richard Smith, Director of the Cayman Islands London Office, Lord Blencathra. Good evening and welcome.  I am delighted to be in this wonderful city which I have grown to love, and to be in the company tonight of so many fine representatives of the financial services industry, the international business community, the tourism sector, environment experts, and government.  I know many of you are very familiar with my country, the Cayman Islands, and have been our friends for some time.  Others here tonight are just starting to get to know Cayman, and I hope that by the end of this evening you will feel you know a little more about my home and all that it has to offer.

The Cayman Islands is renowned for its sugar-white beaches, crystal clear water, amazing wild-life interactive experiences like Stingray City, year-round sunshine, friendly people, and superb duty-free shopping.  But that is only one dimension of Cayman.  We are also a world-class financial centre, with a dynamic business environment. Our excellent infrastructure, educated workforce, and stable government all contribute to an excellent quality of life for our residents and a great experience for our visitors.

However, while we have a well-established, sustainable economy that continues to thrive even in these most difficult of times, it would be unwise to rest on our laurels.   I firmly believe that the day we stop growing is the day we start dying. And that is why my government believes that one of the most important mandates for our administration is economic growth and the subsequent creation of jobs.

I’m here tonight to tell you the Cayman story and hopefully inspire you to be part of our exciting efforts to fulfill that mandate.  The past five years of the global recession experience has powerfully brought home the critical need for economic diversification, and my government is pursuing this course with vigour. We understand that we need to be innovative, agile, and competitive in order to attract inward investment and encourage local investment to make this happen.  Our strategy is to foster an environment that facilitates private sector economic growth, employ prudent fiscal management within the public sector, further develop an educated and work-ready populace, and continue the development and modernization of Cayman’s infrastructure.

These four components of our strategy complement each other. We have just delivered our Strategic Policy Statement in the Legislative Assembly setting out in broad strokes our fiscal and development policies for the next 3 years.  Our fiscal policy will result in the Government improving its net financial position; supporting economic growth; creating employment opportunities and building infrastructure to serve the next generation of Caymanians.

The economic health of the Cayman Islands drives all aspects of Caymanian society. It affects the amount of revenue the Government earns as well as the level of services it provides, the number of people with jobs, crime levels and residents’ overall quality of life. We have therefore identified the economy as a central and core policy priority, and will seek to ensure sustained economic activity for the long term by building on what Cayman has, while encouraging additional private sector growth. We are working with tourism industry partners to grow the numbers of both cruise and stay-over visitors in a smart and sustainable way.

We know we have to support small businesses by reducing taxes and bureaucratic hurdles while also providing entrepreneurs with access to training on how to successfully manage their businesses.

Further, we are encouraging and enhancing the Financial Services sector; and expanding our economy by encouraging new types of business activities such as medical tourism, sports tourism, and health research and clinical trials.  We will continue to support responsible, larger scale developments such as the billion dollar planned community known as Camana Bay developed by the Dart Group and Dr. Devi Shetty’s Health City.

We are very excited about Health City as it not only represents the first major medical tourism project for the Cayman Islands, but it will also greatly expand access to tertiary health care for our residents.  Dr. Devi Shetty is a world-renowned heart surgeon, who has revolutionised the delivery of health care by making healthcare accessible to even the poorest and most vulnerable in his home country of India.   When Dr. Shetty embarked on identifying the location for his new project, he had a very clear objective – find a place that provides political stability, an excellent climate for development, well-regulated health care services, and an excellent tourism product that patients will want to visit and enjoy while they recover from their surgeries.  I am very pleased, but not surprised, to be able to tell you that Dr. Shetty found all these key qualities in the Cayman Islands.

Cayman Health City will be a centre of excellence in a number of major specialties including cardiac surgery, oncology, neurology, and orthopedics.  Its first phase will open in February of 2014 and will consist of a 140 bed tertiary care hospital that will focus on cardiac surgery, cardiology, and orthopedics.

Over the next decade, the hospital will expand to a 2,000-bed facility, and expects to be a Joint Commission International, USA, Accredited facility providing care in major specialties including neurology, oncology and other cutting edge tertiary care disciplines. The complex is also planned to have a medical university and an assisted-care living community.

Health City is just one of the ways in which the Cayman Islands is actively working to grow and diversify our economy.

Another major initiative – in fact one that has a welcome presence here tonight – is Cayman Enterprise City.  CEC, as it is known, is the first Special Economic Zone to be developed following our passage of the Special Economic Zones Law in 2011.  CEC is designed to attract firms engaged in internet and technology, media and marketing, commodities and derivatives, biotechnology, and education and training.

One of the great benefits of this Special Economic Zone is that it enables international companies to have a genuine offshore physical presence and generate active business income from the Cayman Islands.

We also recognise the importance of maintaining and enhancing our infrastructure, and we are currently embarking on some significant infrastructure projects.  Our procurement process for these major projects is enshrined in our public finance legislation, which demonstrates our firm commitment to fair, open, and competitive processess for procurement, a demonstration of our belief that good governance is key to a country’s success.

We have two major infrastructure projects currently working through the procurement process.  The first is the new cruise ship berthing facility, construction of which is expected to commence in early 2015.  This will represent the largest infrastructure project ever undertaken by the Cayman Islands Government.  This new port will be delivered as a “3P” project, and its completion will greatly enhance our cruise tourism product.

Another significant project that is just getting underway is much-needed improvements and expansion of our three airports.  Cayman has had the good fortune to experience year-on-year increases in stay-over tourism, and we have to build more capacity to maintain and improve the visitor experience.

Employment opportunities for Caymanian artisans and construction workers will improve with the start of construction on the Dart Group’s new hotel property and a new hotel being proposed to service Health City as well as a proposed new golf course development on the eastern end of the Island.

I should say, though, that as committed as we are to diversification, we are also committed to maintaining and strengthening our financial services industry, which is the foundation of our economic success.

The Cayman Islands has been among the vanguard of the global financial services industry for more than 40 years. I suggest to you that a country only enters into this company when its legislative and regulatory framework is strong enough to withstand international scrutiny, and yet flexible enough to provide industry with the products and services it needs to attract sound business.

Indeed, Cayman has built our reputation as a jurisdiction of stability and integrity because of the collaboration between Government and industry. Although this partnership has existed for decades, my Government recently strengthened it by signing an MoU with Cayman Finance, the primary body that represents our financial services industry.

Our amended Insurance Law, which came into effect in November 2012; and the Exempted Limited Partnership amendment Bill, which will soon be presented to our Legislative Assembly, are examples of this.

The Insurance Law now recognizes that the risks for captives and reinsurers are different and facilitates more opportunities to develop that area.

The Exempted Limited Partnership Bill, which will soon be presented to our Legislative Assembly, represents a significant advancement of the features of our Exempted Limited Partnerships and will be welcomed in the market.

Both pieces of legislation are the result of collaboration between Government and industry, and our financial services framework is stronger as a result.

As you know, Cayman has had – if I may say so – more than its fair share of scrutiny over the decades. But the results have been positive for us. In my biased opinion, the pressure has made us into a more brilliant diamond. Other CDs and OTs have experienced the same pressure and similar results, to the degree where, as you all know, the UK Prime Minister recently acknowledged the quality of our regimes.

To counterbalance my subjectivity about Cayman, however, I offer you three recent examples of objectivity. Last Friday, Cayman was named as a vice chair of the Peer Review Group of the Global Forum on Transparency and Exchange of Information for Tax Purposes. We also retained our membership in the Forum’s Steering Group.

These two examples speak volumes about what the forum’s 121 members think about Cayman’s contributions to the global discussion on tax and transparency.

My third example is the Global Forum ratings of member countries’ legislative and regulatory frameworks.   On the 10 elements that were assessed, Cayman was rated compliant in eight, and largely compliant in two. Our overall assessment was that of largely compliant.

I am proud of the work that has been done, and proud of the role that Cayman will continue to perform in developing globally accepted standards.

Earlier this month, Cayman was the first OT to sign a FATCA-type intergovernmental agreement with the UK, which prepares the way for Cayman to automatically share financial information with the UK on UK taxpayers who hold Cayman Islands accounts. We will also sign a FATCA Model 1 IGA with the USA on Friday morning.

Also this month, the OECD/Council of Europe Convention on Mutual Assistance in Tax Matters was extended to Cayman and will come into effect on 1 January 2014.

And in April, we committed to joining the UK, France, Germany, Italy and Spain, in the G5 pilot on multilateral automatic exchange of tax information. This commitment complements our engagement since 2005 in the EU Savings Directive.

Lately, however, the global level discussion has centered on beneficial ownership of companies and other legal arrangements. Immediately following the G8 Summit this past June, Cayman, and the CDs and OTs, joined G8 countries in publishing action plans that included a commitment to public consultation on beneficial ownership.

I am pleased to announce that yesterday; my Government issued its public consultation paper on beneficial ownership, in fulfillment of that pledge.  The paper reflects that beneficial ownership data has been collected and furthermore, updated, in Cayman for more than a decade; and that in April this year the Global Forum recognised that information relating to beneficial owners continues to be readily available to appropriate authorities in the 32 jurisdictions with which we have bilateral agreements.

Colleagues, we all must ensure that transparency delivers benefits for rich economies and developing countries alike, and that we maintain confidence in the fairness and effectiveness of our tax systems and in the operation of global markets. Tackling tax evasion and fraud is a global responsibility in which Cayman will continue to play our full part.

As I mentioned before, we are constantly looking for ways to improve our tourism product.  We are working to improve the experience for both our cruise and stay over visitors through upgrades at the cruise port and our airports.

A goal of this Government is to deliver the best possible product for the people of the Cayman Islands and the Islands’ tourism industry. We are addressing the sustainability of air and cruise transport to the Cayman Islands, while developing more tourism opportunities for our people.

Sports Tourism is an area ripe for further expansion. We have already seen successful events such as the NORCECA Beach Volleyball events, the Cayman Invitational Track Meet, the CARIFTA track championships, and more recently, the CONCACAF Under-15 boy’s football tournament that brought some 700 players, their coaches, families and friends, to our shores during August of this year.

Plans are already under way for the CONCACAF Under-20 women’s tournament in January, which will bring international media exposure to the Cayman Islands through the broadcast of the tournament on Fox TV.

We are also blessed with ideal conditions for watersports such as sailing, fishing, and kitesurfing, all of which will see international competitors coming to our shores over the course of the next year.

While we embrace economic development and welcome visitors to our Islands, we are very much aware of the need to protect our environment.

The long-awaited National Conservation Bill will be brought to the Legislative Assembly before the end of this year. This important legislation has our full commitment.

We also recognize the importance of addressing climate change. We acknowledge the sobering message of the report by the Intergovernmental Panel on Climate Change, a summary of which was released on Friday, 27 September:  Cayman simply cannot afford to ignore the conclusions of this worldwide committee of eminent scientists. The Government therefore intends to adopt the draft climate policy, produced in 2011 by a multidisciplinary public/private sector initiative led by the DoE, and to begin urgent work on an implementation plan.

Cayman created our now famous system of marine parks 26 years ago, 24 years ahead of the UK; we have rescued our Blue Iguana from near extinction and each year we add more green turtle stock to the oceans. That demonstrates our lasting commitment to protecting our wonderful bio-diversity.

In Cayman we recognize that we must do all that we can to protect the environment on all three Islands to ensure that we preserve paradise for future generations of residents and tourists alike.

So you see, while we are a powerhouse in the world of finance, the Cayman Islands also has much to offer in the way of investment and excellent quality of life for those who choose to join us.  I hope that tonight I have been able to give you an idea of what we have to offer, and I hope you will be compelled to come and be part of our story.

Again, thank you for joining us for dinner and fellowship. Please, enjoy your evening.

END

PHOTO: Cayman Islands Premier Hon. Alden McLaughlin hosted a dinner during JMC in London for Friends of Cayman and future Friends. Here he’s talking to Felix Francis, a true Friend of Cayman