Financial industry Cayman’s mainstay

I have read with interest your editorials this week concerning the FCCA Conference.

While it is always nice to see any attempt to tidy up Grand Cayman, the organisers have known about the Conference for at least two years.

So why was the beautification effort left until only a few weeks before the event?

If occasions like this are the only time we care to clean up this island, we might also schedule more frequent visits by the Queen!

According to Department of Tourism Visitor Exit Surveys (Compass, March 10, 2006), stay-over visitors have for some time been expressing discontent with cleanliness and beach quality, as well as bigger issues like congestion and overdevelopment. Why are we not addressing these problems every day, rather than on a superficial level every so often for some road show or state visit?

Anyway, I am sure the customary harbour front display of temporary flags and banners will leave a lasting impression on the Conference delegates. And then the Department of Environmental Health (which does a great job in the face of the general public’s relentless effort to trash the island) can come out in force later in the evening and sweep up the rubbish that litters the streets of George Town after every cruise ship visit.

I am bothered though by the assertion that ‘no matter what business you are involved in on Grand Cayman, your paycheque contains some portion of the money the cruising tourists leave behind’.

The majority of Caymanians arguably derive their livelihood from the financial industry, either by way of direct employment or as civil servants or as owners/employees of the various commercial enterprises and industries that support daily life on the island.

Over the past 30 years, the sustained growth of the financial industry and the related expansion of the civil service have yielded a seemingly inexhaustible supply of excellent jobs for Caymanians (especially the office jobs that Caymanians now clearly prefer).

The financial industry puts Cayman in the unique position of not having to depend on tourism to the same extent as other Caribbean islands and we are charting a dangerous course by over-emphasising high volume mass tourism, which is a shame because it means that this prosperous and relatively crime-free jewel of the Caribbean may never fulfil its potential as an exclusive high-end tourist destination.

Apart from the obvious employment benefits for the local population, the financial industry has a much better Caymanian to expatriate ratio than most other industries (for example, tourism and construction).

And the smaller numbers of expatriates needed to run the financial industry do not threaten to overwhelm the local population or have anywhere near the cultural impact of the massive imbalances in the more labour intensive industries.

The financial industry’s contribution to Government’s finances far outstrips that of any other industry and every available Government resource at this time should be directed at facilitating its continued expansion.

This means that our immigration policies should be weighted in favour of those who actually drive our economy and create employment for Caymanians.

It also means that some of the 10s of millions of dollars that Government spends on promoting less critical industries would be better allocated to its departments and authorities that service the financial industry and need better facilities and more staff to operate to the standards required by the world’s financial markets.

To put into some perspective the importance of the financial industry, consider that in 2003 company, banking and mutual fund fees pumped CI$69 million straight into Government’s coffers, compared to CI$11 million from cruise ship and travel tax (which also includes travel tax paid by local residents when we fly off island).

Of course, the estimated CI$186 million cruise tourism impact on the economy should never be discounted, but this pales somewhat even when compared to the contribution of the stay-over tourist sector. It is a fact that the economy benefits significantly more from smaller numbers of stay-over visitors than larger numbers of day visitors.

For example, in 2003, a mere 293,000 stay-over visitors put CI$226m into the local economy, as against CI$154m expended by 1.6 million day-trippers.

Does it make sense continually to promote labour intensive mass tourism that mainly employs non-Caymanians?

Good economic policy perhaps in countries like the Bahamas, Jamaica and Mexico that need to find employment for large numbers of locally available labour, but we don’t have that problem.

Cayman has long been sailing in the wrong direction where the tourism industry is concerned and the current Minister of Tourism summed it up well when he commented that, ‘Clearly, the future of the tourism industry, and by extension the Cayman Islands, does not lie in mass tourism’ (Compass, April 25, 2006).

So while serious efforts must be made to improve the tourism industry, the priority for the foreseeable future should be the financial industry.

The resilience of the financial industry has been shown time and again. Its importance to the local economy was best demonstrated in the aftermath of Hurricane Ivan when the tourism industry shut down completely and the financial industry was operational almost immediately. That is what kept this country going. It is the financial industry that provides employment for most Caymanians and the bigger it is the more Caymanians it can employ.

Andrew Reid

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