From the Royal Gazette
A Cayman [Islands] business leader yesterday outlined the island chain’s recipe for success.
Anthony Travers, chairman of the Cayman Islands Stock Exchange and senior partner in law firm Travers Thorp Alberga, said the Caribbean chain had learned from past mistakes.
He added: “It is probably true to say that there is now a growing realisation in Cayman that the old assumptions, that the expatriate workforce was temporary only and to be replaced ultimately by Caymanians, is flawed, although of course it is one that historically prevailed in many Caribbean islands and indeed Bermuda.”
Mr Travers was speaking after an editorial in the Cayman Compass newspaper said the country had its highest-ever population — standing at more than 58,200 after five years of “decline and stagnation.”
The editorial said that the population grew 4.5 per cent last year alone — largely fuelled by 1,800 non-Caymanian residents, mostly work permit holders.
But it added that — at the same time — unemployment among Caymanians had dropped 1.5 per cent to 7.9 per cent.
Mr Travers said: “The recent statistics have indicated that as the expatriate workforce increases, Caymanian unemployment reduces, which shows that the better understanding is that a viable local economy can support the integration of Caymanians who have developed sufficient skill sets.”
And Mr Travers said that the controversial “rollover” policy on work permits, similar to the now-axed Bermuda term-limit policy, had affected the country.
He added: “Evidently, mistakes were made in the Cayman Islands, particularly with regard to the imposition of the rollover policy, which caused the exodus of a significant number of fund administration jobs to locations such as Canada.
“It is being recognised after the fact that 50 per cent of the workforce in the fund administration industry was in fact Caymanian. “So lessons have been learned from these mistakes and, although there are those that adhere to the old assumptions, there is now a growing understanding that a less restrictive immigration policy is more likely to boost the local economy.
“Needless to say, over many years this involves a change to the status quo in the local population, but the alternative appears to be government deficits, widespread unemployment and eventually a downward spiral into crime. Once that cycle is evident, inward investment is improbable.”
Bermuda economist and consultant Peter Everson told The Royal Gazette earlier this week that the Cayman economy was growing, rather than contracting, and that the islands now had a budget surplus, which meant they could choose between funding major projects and paying off debt.
And he said Bermuda needed to look at abolishing barriers to overseas investment and make public services more efficient.
Mr Travers said: “There is nothing particularly surprising, however, about the about the need for populations to evolve and develop — no population in history has managed economic development without evolution and change.
“It is up to the politicians, though, to show leadership on this issue and to ensure that immigration is managed effectively and with proper checks and balances to minimise concerns.”
Mr Travers was backed by Bermuda elder statesman and successful businessman Sir John Swan.
Sir John said the success of Cayman was “a reflection of them assuming the responsibility of recognising that their economy was in dire straits and that in order to overcome these problems some major steps had to be taken”.
He added: “Obviously, the legislature is controlled by the Cayman people and with the assistance of the British government, which we don’t have any interference from, which they do because of their constitutional position.
“They elected to take steps to reduce the costs of operation and enhance economic activity and, because they have a free market economy, not obstructed by cartels and policies that might have worked years ago, but are no longer relevant.”
Sir John said the “restrictive” Bermuda 60/40 rule to guarantee majority Island ownership of businesses did not apply in Cayman.
He added: “They have been able to attract capital, competent people and product that allowed their economy to grow and provide jobs and opportunities for their people.
“We, on the other hand, have elected to procrastinate and prevaricate on every little move that is made, sending a message to the world that we’re really are not in business to do business and expect them to do business with us when we’re not prepared to do business with the world.”
Sir John said: “You can apportion blame however you want — and it’s not all a result of international events — but we have to face up to the reality that our economic condition is not only bad, but appears to be getting worse.”
He added that an increasing trend towards mergers in the insurance industry, leading to job losses, was not offset by new company formations, while local businesses continued to suffer and often close down altogether.
“We need a national conversation on where Bermuda needs to be — reducing debt, growing GDP, creating jobs and providing the services and goods the world has need of.”
Sir John said: “I call on the Government, the Opposition, members of the Bermuda community and community leaders to have conversation about what we must do to make Bermuda a place that is in the real world competing and able to do the things that are necessary. At the moment we’re doing neither in an effective and functioning way.
“The country must step forward and stop thinking of self-interest and think of the national interest and thus serve the greater good of its people.”
IMAGE: Anthony Travers
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