All eyes and ears were on the panel of prominent leaders within Cayman’s community at January’s Cayman Business Outlook to glean an insight on their views for the way forward for the Cayman Islands. Business Editor Lindsey Turnbull was in attendance and reports.
Cayman Business Outlook held at The Ritz-Carlton drew a diverse crowd all eager to hear how Cayman would prosper in a grave new world. Organisers Fidelity brought together a vibrant panel, consisting of attorney Sherri Bodden-Cowan, Pastor Al Ebanks, financial consultant Paul Byles, Police Commissioner David Baines and Auditor General Dan Duguay, who were all happy to share their views on the questions posed to them via moderator Gary Linford, managing director of DMTC Group. Questions had been sent to the organisers ahead of time by members of the public and no panel member had previously seen any questions.
Q. The Premier has said he wants Cayman to become the Singapore of the Caribbean. Singapore has a population of around 4.6 million with approximately 63,000 government employees. By the same rationale Cayman ought to have around 800 government employees. Is the Cayman Islands civil service bloated and how can we move away from a culture which expects government to support so many?
It is very clear that the expenditure side of the equation is key. I have lived here all my life and I can see that the civil service is bloated and needs to be cut. It is clear that something needs to be done about its size, not because it is inefficient but because government’s fiscal sustainability is not in keeping with such growth. We need to look at a programme of divestment which is key. This should not be rushed but it has to be dealt with somehow.
Q. According to 2008 statistics there were nine work permit holders in the unskilled/semi-skilled category for every one out-of-work Caymanian. There have been many reports in the media about Caymanians complaining that they cannot find jobs for a living wage. To what extend do you believe that expectations are too high, or are wages too low in the semi/unskilled field?
One of the main labour concerns has been that no minimum wage was ever set although by law we have had the ability to set it since 1987. With regard to immigration, when an employer is applying for a work permit the wage must be clearly placed on the application form. In addition the advertisement in the newspaper must also state the salary. There needs to be a level of trust developed between the immigration boards, labour board and the private sector so there is no misrepresentation because sometimes employers do not state all benefits available to the employee, such as housing, car clothing and education benefits, which are not placed in the ad when a Caymanian sees it.
Immigration work permit applications and advertisements need to clearly and precisely state the salary and benefits of a job so that it can be decided whether a Caymanian can genuinely fill the job.
The Cayman Islands has for years benefited from workers from other countries coming here and willing to work for much lower wages that Caymanians could live on and send monies back home.
Without a minimum wage we have created substandard living accommodation within which individuals are forced to live and so I believe three areas of government need to co-ordinate (i.e. planning, housing and labour) to ensure that everyone is properly paid, housed and given a proper wage.
Q. The RCIPS appears to have successfully reduced lawlessness on the roads with the introduction of road blocks and more speed tickets being issued but the biggest issues in Cayman are the increase in violence, murder, burglary which brings fear to the community. What is your plan to defeat these issues?
Commissioner David Baines
In the short term we are getting in between the gangs responsible for the tit for tat shootings, which have blighted the island recently.
The increase in police roadblocks is not to target drunk drivers, rather it is a deliberate attempt to stop the gang members getting at each other, so that we can target them and monitor their whereabouts. It is regrettable that in the course of road blocks we also catch drunk drivers. But roadblocks are only dealing with the here and now. We are currently building a skilled tactical crime unit, which can target the arrest of certain individuals, who for different legal reasons, either because of the reluctance by individuals, or being fearful of the system, have been unable or unwilling to give evidence.
We are working on obtaining the best intelligence, increasing skills, changing the law to help build up public confidence. If we don’t get the perpetrators to court we leave them to perpetuate these most serious instances of crime.
I would like to say that when people point to Cayman’s worst crime peak ever currently underway this is not true. Total crimes for 2009 (2,800) are actually down over 2007 (3,481) but up over 2008 (2,600).
Headlines drive the public’s perception and further fuels this atmosphere of fear. What we really need to do is pit our limited resources against issues that affect security issues on these Islands.
Q. You have been quoted in the press as stating that an AG ought to have a 10-year contract. Can you explain the length of term you suggest that an Auditor General of the Cayman Islands ought to be able to undertake?
Auditor General Dan Duguay
We need to look at the role of an AG and understand that their ability to maintain independence is crucial. In the US the AG undertakes a 15-year term, in Canada and Australia it’s 10 years, in New Zealand it’s seven. In Jamaica and Trinidad the AG undertakes their role for life and can only be sacked for misconduct!
The AG has to be secure in the knowledge that if they annoy people this will not be a factor in continuing their employment. Currently after three years the AG in Cayman has their contract up for renewal. I would hate to think that an AG here has to look over their shoulder and worry about undertaking various audits just because their contract is up for renewal. I think it would be fair to have a five year contract here renewable once.
Q. Immigration is a big topic here. How might the rollover policy be amended to make it into sound policy?
The rollover policy got into difficulties when irresponsible politicians led the public into thinking it was a policy to throw ex-patriots out so that Caymanians could get their jobs. Looking back to the original Vision 2008 plan and the findings from the first Immigration Review Team which I sat on back in 2001 – 2003, we can see that the purpose of the rollover policy came about when overseas territories were required to abide by international obligations, in particular the European Convention on Nationality.
This states that anybody living in an EU country for ten years or more but who is not a citizen must be given the opportunity to become a citizen. We could not offer citizenship to all the work permit holders on island because the Cayman Islands would be obligated to offer all these citizens rights such as health, education, housing and pension plans, with huge implications for society. Thus it was felt that to abide by the EU convention we could offer such individuals a genuine break of stay and then start afresh at a later date. It was decided that the break of stay should take place after seven years of residency however it is conceivable that the break could take place after just under ten years of residency.
It is not a simple problem because Caymanian families and businesses suffer. And how do we consider sending an individual back to their country after they have lived here for 30 or 40 years, with perhaps no ties in their country of origin? We are also looking at the possibility of shortening the break of stay.
Q. Within the community things are getting tough now. What role does the church play in Cayman in dealing with issues such as anger, managing expectations and so on?
The Church plays a largely silent but important role within society. Senior business leaders to the common labourer all seek out spiritual leaders for guidance. We are expected to be all things to all people. Our strength comes from our diversity, with around 120 nationalities here who mostly live in peace. Here the Church plays an important role. We believe it does not matter the colour of your skin; we all deserve dignity and respect – it’s a mutual thing.
Q. Why are firms leaving?
It’s increasingly difficult to get the talent needed in the financial services industry. Talent is a serious issue. I carried out a series of one-on-one meetings at the end of last year/beginning of this year with businesses and one of their biggest issues was the difficulty in recruiting employees. The difficulty in recruiting is obviously not just an immigration issue; it’s also to do with personal preferences, the cost of living, salaries, and so on. But immigration is one of the most important factors.
There is substantial evidence to suggest that other jurisdictions are approaching CEOs in Cayman asking them whether they would like to set up in their jurisdiction. They are saying “We appreciate you.”
We need to aggressively pursue the establishment of businesses here, with real activity otherwise we face the serious risk of becoming the kind of jurisdiction of which we are constantly accused: a shell operation. Of course this is not true and substantial business takes place here, but I believe we face the risk of losing the argument. We need to look at how we view employment. Foreign workers bring tangible benefits. We only have a small pool of labour. We are a small country and the rate of growth of the financial services industry has always outpaced our ability to deliver the sufficient workforce. In order to service demand we have to get people here in order to grow.
Q. There is a quote by Martin Luther King that reads: “Our lives begin to end the day we become silent about things that matter.” How are we able to provide financial accounting transparency when we cannot measure where we stand?
AG, Dan Duguay
We need to do a much better job because we are not doing very well. I believe we have a good regime in place and if it worked as it should we would be the envy of the world. However, government statistics are far behind in some areas. Certain ministries can only provide financial statements for the 2004/2005 accounting period and some for the 2005/2006 period. This is unacceptable. Currently we have around 25 per cent of Government ministries, statutory authorities and boards, which are up-to-date and we have completed the audit on those. We need better information. Indeed, the figures presented by the Premier today (operating expenditure as compared to budget forecasts, was down CI$36.7 million/operating revenues were also down as compared to the budget forecast by CI$30.3 million) are the kind of statistics that every citizen should be able to access on a real time basis.
Q. How do you feel about the construction of alternative places of worship, such as mosques and temples, here in Cayman?
I am unaware of any attempt to build such a place of worship that has been forbidden. I don’t believe there is even the desire to forbid such houses of worship. The Cayman Islands is founded upon Christian principles and the role that Christ has played is formatted into our law and governance.
Q. The Premier said in his earlier address that we must “embrace wealth or reap poverty”. What do you say to this?
I say ‘Amen to that!’ The government needs to get its finances in order and the excuses have got to stop, for the benefit of the people of the Cayman Islands.
Q. To the Police Commissioner. Mr Baines, you made headlines across the UK when you sent Christmas cards to crime suspects, telling them that police were “thinking of you”. What kind of approach is needed to keeping Cayman’s streets crime free?
Commissioner David Baines
We need to recognise that the drivers of crime in Cayman are an underclass, which doesn’t share in the wellbeing of the Islands and they have no stake in Cayman’s future. The challenge is to keep that group as small as possible. We need to hook kids out of the pool and treat them with dignity and respect. We need to work with the schools and the education system as a whole to ensure that young people get the support they need so they feel they have a stake in Cayman’s future. In particular children need to be able to read once they are in secondary education. We need to invest in neighbourhood officers who work within schools. At the same time we are developing a proactive team to deal with the underclass in society who are beyond saving. This requires hard-edged policing. It is a balance between this type of policing and community building that is needed to recover confidence.
Q. What is the value of one new job created to Cayman as a whole, whether that job is filled by a Caymanian or an ex-patriot?
Professional and managerial positions account for around 20 per cent of all work permits and we have to look at the benefits derived by Caymanian businesses such as restaurants, shops, gym, janitorial services etc from these 20 per cent of ex-patriots. On the Immigration Review Team we are looking to approve the presumption of certain positions within a business as key to allow the individuals within that position to remain on island for nine years with the ability to then apply for permanent residency. This list will be extensive, to include MDs, CEOs, GMs, equity partners, presidents, senior vps, senior managers, brokers, dealers, traders, insurance managers, chief technical officers, COOs, underwriters, actuaries, etc. This will be approved at Cabinet level then passed on to the Boards so there is no break in policy. We need more clarity for businesses as to who should be granted key and this will help to break down any misconceptions that may be occurring now.
Q. With the need for new revenue sources is it now the time to look at introducing gambling to Cayman? It is no more life threatening than smoking or drinking and yet this option never sees the light of day.
I have always spoken out against gambling and I won’t change. Studies have been done in the US to prove that gambling detrimentally affects a community. We currently have problems within the community such as crime and poverty; gambling has proven to be a worse addiction and the Church will continue to speak out against it.
Q. To Dan Duguay, AG. Your investigations into Operation Tempura were critical of the government but not of the former governor, a view not widely held by the public. Do you believe that the former governor was in no way accountable for the oversight of the cost?
Dan Duguay, AG
The former governor started a process which he tried to get out of and put a body in place to oversee the operation however that body was flawed because it did not have enough oversight. No one was looking at why certain events were taking place, and what offences, if any, had actually taken place. For example in the case against Judge Henderson it was found that no offence had even taken place. The entire operation was flawed from the start. They didn’t have the right people and didn’t understand what they wanted to do. The important thing is to check to see if we actually learnt anything from the whole issue. It was a unique situation so it is hard to take any lessons learnt and apply them to another context. It may require the establishment of some kind of oversight body.