Economic development ‘Grave New World’

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The following is an excerpt of an address by Premier McKeeva Bush, at the Fidelity Business Outlook Conference held on 21 January 2010 on Grand Cayman. During his remarks, the premier addressed a number of economic development imperatives for the Cayman Islands in the context of a challenging global economic environment. The full text is available from www.caymanfinance.gov.ky.

First, I wish to thank the board and senior management of Fidelity for their wonderful commitment and organising of this important event on the Cayman Islands conference calendar.
 
I also thank you for providing me with the opportunity to make these remarks today.
 
The theme of this conference today, “Prospering in a grave new world,” is indeed timely. We are well aware of the gravity of the economic situation not only in the Cayman Islands but in many countries around the world. We are also acutely aware of the challenges that lay ahead as we attempt to create and implement a myriad of solutions to not only address the economic situation, but to come out of this an even stronger nation.
 
Allow me to suggest a different way to look at the problems facing the global economy.
 
The evangelist Mr Billy Graham once said: “Comfort and prosperity have never enriched the world as much as adversity has.”
 
So while I fully understand the need to acknowledge the realities before us, I believe we should look beyond adversity and keep focused on the first word of today’s conference theme… prospering.
 
As the premier chosen by the people I have been entrusted to help ensure continued prosperity for our country in the face of hard times.
 
This responsibility is an ever-present part of my role as premier and occupies my mind 24-hours a day, 7-days a week, every day since being elected.
 
In my remarks, I will provide an update as to the government’s actions and our progress in addressing the challenges which it faced on being elected to office only eight months ago. I will also speak to the state of government’s finances. I, as the minister with responsibility for the economic sector, will speak directly to what I see as the key issues that need to be resolved.

That said ladies and gentlemen, the key message that I wish to make here this morning is that as a country, the Cayman Islands needs to make some fundamental changes to the way in which it approaches economic development. We can no longer apply the same old policies to the new challenges that we are facing. We must bravely tackle the realities of a global economy and intense competition between countries for the necessary investment for their economic and social survival.
 
More than a decade ago, in a speech which was widely reported throughout the local media, I said that the Cayman Islands “must embrace wealth or reap poverty”. Since being re-elected in May 2009, I have been reminded by several persons of the remarks I made back then.
 
Indeed these persons feel that those remarks I made then have a particular relevance today given the economic climate. Those of you who have listened to any of my public remarks at various events since May of last year will also know that I have been essentially pounding the pavement again with a similar theme.
 
When I am through with my remarks today, I hope that I will be able to demonstrate that there are areas in which we need to completely adjust our way of thinking.
 
Equally importantly, I appeal to you the business community to assist in the need to educate the wider community on what is required from a business and wider economic perspective, for this country to not only survive, but prosper.
 
There is some negativity in certain quarters regarding our policy of welcoming inward investment. It is important that you, as the engine of our economic success and as key stakeholders in the process, help to get the message out on what is needed. In short the things that you have all said to either me or the government in our discussions, must now be said more publicly so that the wider community is kept fully abreast of the implications on inaction in key areas.
 
Cayman remains attractive to investment
Now let me begin by giving you an update on the progress we have made:
 
The global financial markets gave us a resounding vote of confidence by making our November 2009 international bond offering the lowest ever yield by a Caribbean issuer in a US dollar public bond transaction.

  • Moreover, several new private sector interests from around the world are showing interest in the Cayman Islands. We saw this first hand as part of our recent investment marketing efforts across the US, Europe, Asia and the Middle East where I personally met with hundreds of current and potential investors;
  • As many of you know, a significant opportunity before us comes from our recent visit to India where we were able to further discuss the possibility of a large state-of-the-art hospital in the Cayman Islands targeting primarily US patients seeking affordable, high-quality healthcare; developing our medical tourism potential;
  • Visitors to our Islands also showed their loyalty and affinity as the Department of Tourism is reporting that the Cayman Islands ended the last two months of 2009 with visitor arrivals up five per cent over the same period in 2008. This is particularly remarkable given the majority of our visitors originate from the US;
  • The governments of many large countries have shown economic interest in the Cayman Islands evidenced by the 14 tax information exchange agreements signed in 2009, and 15 more that have either been negotiated or are currently being negotiated; and
  • For the next three to four years, our economy has attracted more than $3 billion in infrastructure and commercial developments such as new port facilities for cargo and cruise ships, to world class developments such as Camana Bay, Dragon Bay, a significant new phase of the Ritz-Carlton Grand Cayman, and Cricket Square, among other projects.

These early achievements demonstrate the strength and stability of the Cayman Islands in a difficult global economic climate and it should provide reassurance to all of us that we have tremendous opportunities ahead of us and unlimited potential to realise them.
 
While I may be accused of being an over-optimistic nationalist for the future of the Cayman Islands, I am also the first person to tell you that – even though we have the international interest, willingness and resources to succeed – we have much work ahead of us if we are going to fully reach our business and economic potential.
 
Fidelity and the other conference organisers are exactly right in identifying a “new normal” for today’s successful public and private enterprises.
 
For us in the Cayman Islands, this involves taking the best of what has made our country great – our resilience, entrepreneurial spirit and family values – and recasting those attributes in ways that meet today’s standards of productivity, growth and social responsibility.
 
Since taking office in May 2009, my colleagues in Cabinet and I have been on the front lines of bringing about immediate, positive changes to how government serves the needs of businesses and individuals in the Cayman Islands and to the economic and social well-being of everyone who calls these Islands their home.
 
We have had to do this against a backdrop of the global financial crisis and resulting domestic economic slowdown, in addition to the myriad of changes brought about through the implementation of constitutional amendments in November 2009.
 
We have had to take on change and adversity as our “new normal”, which has also meant having the courage to address challenges head on.
 
That is what our government has had to do over the past eight months and that is exactly what I believe we all need to do for the continued prosperity of the Cayman Islands!
 
Ladies and gentlemen, I know we have challenges and we certainly will be discussing those today. But I hope that you agree with me that these early achievements by the government that I have just described, is a clear sign that there is still confidence in our economy!
 
Just last week, the Cabinet formally approved a set of new policy directions to the Work Permit Board, the Business Staffing Plan Board and the Chief Immigration Officer for their guidance in the exercise of their respective powers, functions and duties. These directives are aimed at providing urgent relief for the protection and continued success of our financial services industry.
 
Fully integrated approach to financial services policy
Furthermore, in order to coordinate the continued negotiation of tax information exchange agreements (TIEAs), maintain the momentum gained by our successful inclusion on the OECD white list, as well as our membership in the OECD Steering Group and our participation in the OECD Peer Review process, we have restructured the Financial Services Secretariat. A director has been appointed and will coordinate and oversee the functioning of this strategic unit.
 
A senior legislative policy advisor has also been appointed and will focus mainly on liaising with key stakeholders including the Monetary Authority and the private sector, to develop and amend financial services related legislation. This new holistic approach to financial services policy will seek to integrate the key areas of research, policy development, communications and legislation and demonstrates the high priority my government places on strengthening our financial services industry.
 
In conclusion, I wish to reiterate that this government is embracing a true partnership with you the business community. In that partnership, we will do what is necessary to facilitate economic progress that is sustainable and directly benefits Caymanians and others who work in, and contribute to, these Islands. At the same time, we also seek your support in addressing the challenges we face in getting that job done.
 
Many of you are already excellent corporate citizens. But I encourage all of you to become even better corporate citizens particularly in these challenging times.
 
I also look forward to your support in getting the important messages out there regarding the benefits of the inward investment which you facilitate on a daily basis.
 
Our government will be relentless in seeking out opportunities that will help secure the prosperity of the Cayman Islands for generations to come.
 
I know many of you in this room share the same passion for wanting the Cayman Islands to succeed.
 
This is where I believe we need to come together to ensure we are putting what is best for our country first. The Cayman Islands has been literally transformed in just one generation.
 
My message to you is that we need to look ahead and this will mean having to do things differently than before. Where we once had business coming through the door, its leaving and we now have to go out and find it – we cannot sit back and wait for the world to find us. We have to show the world all that we have to offer, and what makes us great.
 
I realise that change takes courage. It is hard work breaking new ground, finding new and better ways to do things, but we in the Cayman Islands have an opportunity to show the world what a small country can accomplish.
 
I sincerely wish that when I am old and reflect on my life I will be pleased with my efforts to have made the Cayman Islands a better place.
 
We have the resilience, resources and fortitude to make it happen.
 
Let’s make it happen.

graveSM

Premier McKeeva Bush