From The Royal Gazette, Bermuda

The Cayman Islands are pulling themselves out of recession on the back of increased immigration.

And yesterday economist and consultant Peter Everson said Bermuda could take a leaf out of the Cayman book and do more to cut the country’s debt and boost inward investment.

Mr Everson said: “The government in the Cayman Islands, partly by luck, perhaps, but also by dint of what they have done, is everything Bermuda said we should have done.”

Mr Everson was speaking after an editorial in the Cayman Compass said the Caribbean island chain had its highest-ever population — standing at more 58,200 after five years of “decline and stagnation”.

And the editorial said that the 4.5 per cent growth in population in 2014 had been largely fuelled by 1,800 non-Caymanian residents, most of them work permit holders.

It added — at the same time — unemployment among Caymanians had dropped by 1.5 per cent to 7.9 per cent.

Mr Everson said: “They’ve got a growing economy — expanding not contracting — and they now have a government budget surplus which means they can choose how much they spend between capital projects and how much they put towards paying the debt.”

The editorial added: “As most recent statistics illustrate, nearly all of Cayman’s new residents will arrive by airplane at the Owen Roberts International Airport, not by stork at the Cayman Islands Hospital.

“As time goes on, expatriates will account for a greater and greater proportion of the Cayman population. Actuarially that redistribution of demography is ordained and inevitable.”

Mr Everson said: “The issue is the difference in reaction to foreigners, both individually as people and as investors.

“The Cayman Islands had a far lower standard of living than Bermuda as recently as 35 years ago. They had very little in the way of tourism and very little international business. They’ve grown both sectors of the economy in 35 years.

“They had a population about half the size of Bermuda 35 years ago, but a land mass several times the size of Bermuda. They had a lot of unused land — that means they always have land they can build on.”

Mr Everson said that foreign investment — particularly from one foreign investor — had boosted the economy over the last ten years.

He added: “He effectively built a new town on the main island.”

And he said that Cayman — despite lacking the natural beauty of Bermuda — had also attracted major investment in new hotels and refurbishments.

And he said the islands had “extremely aggressively” worked to establish a framework for hedge fund administration to complement its existing banking businesses.

Mr Everson added: “That became the backbone of their success in the 1990s and 2000s.”

He added that the Governor of Cayman, backed by the UK government, had refused to sign off on a bill to allow the Caymanian government to borrow more money unless it made major reforms.

Mr Everson said: “It wasn’t as though the islands’ representatives sat around the table and said ‘we have got to cut back’.

“We have the OBA which is trying to cut back, but not at the pace of the Caymans and an Opposition party which believes Bermuda would be better off not cutting back.”

Mr Everson added: “We should be actively seeking foreign direct investment to stimulate the economy and construction jobs.

“And we should be looking to remove any barriers to foreign business setting up in Bermuda and then, obviously, continue to rationalise Government services to make them as efficient as possible.”

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