Although nothing is finalised yet,
it looks like the Department of Commerce and Investment office in Dubai is
close to paying dividends through some inward investment here in Cayman.
Plans for that office were
originally announced in March 2005 by Premier McKeeva Bush, who was leader of
government business at the time. However, when the People’s Progressive
Movement took power in May 2005, one of its early decisions was to close the investment
office in Hong Kong and to abandon plans to open the Dubai office.
As justification for closing the
Hong Kong office, Cabinet Minister Charles Clifford cited a cost of $16,000 a
month in operation expenses, including salaries, and $9,000 in office assets,
both relatively small amounts of money.
In the year or two that followed,
most of Cayman’s big law firms proceeded to set up offices in Hong Kong, Dubai
or both. That Cayman’s private sector firms saw the benefits of setting up shop
in these countries while the PPM government did not, puts the closing of the
offices into perspective.
All of that happened before the
2008 global recession fundamentally changed investment in the world. Cayman’s
financial services industry now faces a more serious challenge if it is going
to regain its former lustre.
One thing certain is Cayman can no
longer simply rest on its laurels as being one of the best off-shore financial
centres. In an increasingly competitive world where more and more jurisdictions
are vying for a slice of the offshore investment pie, Cayman needs to be proactive
in its efforts to attract new inward investment, and it cannot just leave the
marketing to the private sector.
The Department of Tourism spends
millions of dollars each year promoting the Cayman Islands as a tourism
destination and yet the government found spending $16,000 a month too much to
try and promote Cayman’s financial services industry.
It’s impossible to say how much
better off Cayman would be had there been investment offices in Hong Kong and
Dubai since 2005. But it’s easy to see the decision to abandon having those
offices showed a serious lack of foresight.