There has been a big hoopla from
some corners recently about the government giving various concessions to
developers in order to facilitate projects.
Callers to radio talk shows have
complained that the government was giving away revenues by making such
Such thinking assumes that the
project would go on even without the concessions, an assumption we don’t
believe is anchored in reality.
There was a time when the Cayman
Islands didn’t have to offer concessions to developers. Pretty much anything built on Seven Mile
Beach was a success, eliminating the need for the government to offer concessions.
But times have changed. There’s really nowhere else to build on Seven
Mile Beach for one thing, meaning developers have to take more risk in building
a projects off the beach.
For another thing, Cayman is no
longer the idyllic tourist location it once was. West Bay Road is now an over-crowded,
Americanised strip reminiscent of lots of other places. There’s rising crime, increasing pollution
and a government in such serious financial straits that it can no longer afford
to clean the beaches. Despite the new
problems, the cost of a Cayman vacation isn’t getting any cheaper and remains
more expensive than most other Caribbean destinations. The cost factor holds
true for developers as well.
At the same time, other places in
the Caribbean region are building resorts to attract Cayman’s main tourism
To think that the Cayman Islands
can attract developers without offering concessions, when competitors are doing
just that is arrogance. Concessions are
given to developers all the time, all over the world.
Perhaps a bigger question is
whether Cayman wants more development at all.
Premier McKeeva Bush has proposed increased development as a way of
getting the Cayman Islands through its current economic difficulties without
resorting to such measures as direct taxation and civil service job losses. Indeed,
with the future growth of Cayman’s financial service industry in doubt, the
country must look at developing new revenue streams.
If Cayman refuses to give
concessions, developers will just go somewhere else. The country can’t give away revenues that
don’t exist, and it can’t reap benefits from developments that don’t exist