The last PPM Government has excessively borrowed and spent Governments money and put Cayman near bankruptcy. Now the international press is publishing this disastrous news.
Our view is that most of the financial damage to Cayman is from the PPM Governments excessive borrowings and excessive expenditure without which Cayman could weather the economic recession much better.
In our letters of May 2006, June 2007 and February 2008 and others we set out the dangerous spending spree that the PPM Government was on and stated that any fool can spend money but only smart people can make money. There was no published sustainable plan in place by the PPM Government to make profits to fund capital works before it spent and excessively borrowed.
The only 10 year strategic plan the Cayman Islands ever had was VISION 2008, which was the Cayman Peoples plan and which sadly was abandoned by the PPM. The present financial disaster may not have happened if Vision 2008 had been followed. The PPM had no published sustainable long term plan to replace Vision 2008.
The upper limits on borrowing by Government were well known to PPM and all previous Governments all of whom honoured this prudent limit and accepted that it was for the protection of the Cayman people and their money.
In 1992 the Government borrowings were $55 million; in November 2000 they were $107million. Today the government and statutory authorities’ borrowings and future contractual payments, unfunded pension liability and Government guarantees exceed $1 billion ($1,000,000,000)
We warned the people of Cayman that other Caribbean countries were financially ruined and started on the road to independence in one 4 year term of political party governments like the PPM. We wrote also that Cayman was on the course to financial destruction if the checks and balances were not put in the constitution to stop Governments spending sprees. Sadly those checks and balances were not put in the new Cayman constitution by the PPM. An old saying to children is ‘if you do not listen you will feel’. Caymanians and residents are about to feel the harsh burden of increased revenue measures to repay the PPM Government’s financial failure.
A good Government saves in a boom and spends cautiously in an economic recession to help its people who need employment through small projects that employ the people and not the massive buildings that the PPM Government started. The new schools and administration building could have been phased; eg build one of three 60,000 square foot administration buildings first and then the second if surplus profits are available. Build good normal classrooms first then gourmet kitchens and Rolls Royce gyms and recording studios from Govt. profits not loans.
In other Caribbean Islands , when the country cannot borrow any more money the politicians turn to the next disastrous stage and that is to SELL the country’s assets to private sector investors and in the case of buildings, lease the buildings back, to repay excessive debt. This does not make good economic sense but the PPM Government’s massive borrowings and future payments on the unfinished schools, administration building and land for roads not yet paid for may force the UDP to do so. PPM should have waited until their Government had substantial cash from surplus to help fund normal good school buildings and stayed within Governments means.
It is a joke for the PPM to talk about solutions to their financial mismanagement. Prevention is always better than cure. PPM should have prevented the problems.
The Opposition PPM Members of the Legislature are now criticising the UDP Government, which is trying to sort out the PPM Government’s financial mess instead of thanking the UDP for trying to rescue Caymans finances and PPM trying to help UDP.
The PPM Government is mainly to blame for the disastrous excessive borrowing and excessive expenditure that has nearly financially crippled the Cayman Islands. Sadly, future generations of our children over the next 30 years will pay for the four years of excessive borrowing and spending sprees of the PPM Government.