Miller pushes Fair Trade Commission

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    North Side MLA Ezzard Miller told a West Bay audience last week that the Cayman Islands government had “done nothing” with a proposal for a Fair Trade Commission he introduced in the Legislature last year.

    The private members’ motion, made by Mr. Miller in early 2010, sought in part to eliminate the practice of ‘fronting’; where a Caymanian becomes a local partner of a company with purported 60 per cent ownership, but in reality retains little or any control over the company’s operations and does not receive 60 per cent of the business profits.

    The Local Companies (Control) Law requires that all companies maintain at least 60 per cent Caymanian ownership, unless there is special exemption granted or the industry itself is governed under another set of laws.

    “A Fair Trade Commission…would create a level playing field for Caymanians,” Mr. Miller said last week during a concerned citizens group meeting at Sir John A. Cumber Primary School. “Everything that comes to parliament, it’s about making things easier for a foreign person to come here and do business.”

    The North Side MLA said he was particularly concerned about individuals with “deep pockets” who could simply outlast the local competition, driving it out of business. Mr. Miller made no secret at last week’s meeting that he considered the Dart corporation one of those entities.

    “I have been very concerned for a long time about our government’s continued relationship with the Dart Group,” he told the West Bay audience. “These people have the money and the economic means to do whatever they want to do.”

    The Caymanian Compass contacted Dart representatives last week for a response to Mr. Miller’s comments but received nothing by press time.

    At the time Mr. Miller’s motion was debated in the Legislative Assembly, Premier McKeeva Bush said he had given instructions to the Trade and Business Licensing Board not to issue new licences to designated businesses unless they were entirely owned by Caymanians. Some of those businesses in a long list read by Mr. Bush included; watersports, taxi and tour operators, beauty salons and barber shops, gardening and landscaping, auto repair, car washes, commercial fishing, private security companies, radio stations, real estate businesses, plumber and trucking services to name a few.

    Mr. Bush said at the time that already established businesses in those areas that were not fully Caymanian-owned would be allowed to carry on.

    However, Finance Ministry Chief Officer Dax Basdeo also indicated earlier this year that the ministry was looking at a revamp of the trade and business licensing process that could lead to higher Caymanian ownership requirements in many industries.

    The proposal set out by Mr. Basdeo in February attempts to accomplish two things: first, to offer greater protection against competition for Caymanian-owned businesses in established industries and second, to allow for greater foreign investment in industries that may have little to no presence in Cayman right now.

    There would be two general types of business licences created under the proposed revisions to the law, Mr. Basdeo said.

    One category, the “reserved” business, would be strictly for 100 per cent Caymanian-owned companies.

    “We have things to consider such as artisans, handicraft businesses, small convenience stores, watersports businesses; these are things that are being considered that should be reserved for 100 per cent Caymanian ownership,” Mr. Basdeo said.

    Under the other category, “restricted” businesses, some foreign ownership would be allowed. Exactly how much foreign ownership would depend on the type of business being conducted, Mr. Basdeo said.

    “For instance, if we want to encourage more tech businesses, what we could have is a provision that says ‘if you’re a tech business, you can have 80 per cent foreign ownership’. That would help encourage more foreign investors to come into the country…and hire Caymanians as well.

    “If we have more mature industries perhaps in terms of auto care, or beauty salons or taxi and tour buses…perhaps we could have more restrictive policies, maybe 90 per cent Caymanian ownership,” he said.

    “In some sense, that’s a more restrictive way of doing investment,” Mr. Basdeo said. “[The new proposal] creates a better policy tool for government; a way to control the flow of investment into the country and to ensure Caymanians can benefit.”

    Mr. Basdeo said the issue was merely at the discussion stage and that no finalised legislation had been sent to lawmakers.

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    Mr. Miller
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    15 COMMENTS

    1. I don’t get this? Dart is Caymanian – maybe not one of the ruling families but has status none the less. Didn’t the government ask him to buy the hotel that stood empty for years? No other Caymanian came forward.It appears to me that the wealthiest families want control of business on the island so they can profit by selling it to Dart!

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    2. Well this is certainly a slap in the face, sounds to me like if you buy a property in Cayman which I did, upon developing it I will not be able to get a Business license to rent it out to offset the cost of owning it. This is Bad Bad news for me personally after having invested so much into building this place to know the only thing I can do with is try my best to sell it and it sounds like the only folks I’d be able to sell it to are Caymanians since they will be the only ones allowed to earn rental income. Good for them bad for me, I wish I had known this prior to investing almost every penny I had into it. Funny how changes in laws can ruin someone’s future. This is not fair at all since the lure of buying property there was the option to rent it out when you were of island. Real Estate Agents need to make sure people know about this when they are considering buying Cayman Property.

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    3. I was going by what the article says regarding Mckeeva giving instructions to the Trade and Business Licensing Board not to issue new licences to designated businesses unless they were entirely owned by Caymanians, included on the list is Real Estate Businesses. Which, as far as I understand would include getting a TB Licence to rent out your property.

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    4. Under what legislation has Mr Bush the right/power to instruct the Trade and Licensing Board to whom and on what conditions they may issue licences?
      Chapter and verse, please.

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    5. This is a well-intentioned idea with terrible methods of implenting it.

      Restricting the sale of businesses makes those businesses harder to sell and worth less than they would be if you could sell them to anyone. Long term this is damaging for an economy – why would I (as a foreigner) ever invest in a country where laws like this crop up suddenly and completely change the game on me?

      Regarding tech businesses: perhaps it would be useful if someone in the government actually understood what makes a certain type of business successful before they make policies intended to attract those businesses…

      Tech businesses are built to be sold. They need multiple rounds of venture capital, so the ownership structure is always changing. Requiring 20% (or any %) local ownership kills the appeal of a tech business.

      If you want a tech presence, allow them to operate like the hedge funds do. Let them domicile here with 100% foreign ownership, and you’ll get some good side-effects from that. The brainpower is going to stay in New York, San Francisco, etc… But at least Cayman can diversify the economy a bit by letting them have operations here.

      Start with that, and if it works, then start finding ways to get more long-term benefits for the local population. The lawmakers are attempting to get a piece of the pie before it’s even been baked.

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    6. Dear Mr.Miller,

      No use having Fair Trade practices unless complimented with fair employment. God help us if we have to push for affirmative action!

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    7. Point to note about fair trade: it is welcome that the Chinese are willing to inject more into the economy by funding the airport expansion, and other prestigious projects etc. however, most of the instances is that with funding also comes the influx of chinese labour which spells doom for the local contractors and labour force.

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    8. Blue

      You’ve touched a key point there, mate, with only one very good example…

      This is a bunch of political crap meant to convince people to vote for certain individuals, similar to the roll-over policy, by appealing to their so-called sense of patriotism and xenophobia.

      The only voters who can be so misled are the same ones who are bought off with a carton of cigarettes and a bottle of rum, come election time and who can’t even hold a basic job, much less own and run a business.

      There are only 10 – 15% of the wealthiest Caymanians who hold 51 – 60% of fronting partnerships with the top 5% of wealthy foreign investors in Cayman.

      And that includes some of these politicians and their families and supporters of both parties, UDP and PPM.

      The way to increase Caymanian business ownership is to make investment capital cheaper and more available to small Caymanian entrepreneurs but…

      Try getting a loan for a samll business from the Cayman Development Bank (or whatever its called now) and see how far you get.

      When has this exclusive members club of Cayman ever passed laws that would hurt their own pockets ?

      What Ezzard Miller hasn’t told anyone is that most of those Caymanian fronting partners sit on their ample rear ends and do absolutely nothing to earn their monthly share of their foreign partners profits while the foriegn partner is the one working their own rear ends of behind the scene to keep the businesses afloat and profitable.

      This smacks of socialist policies of the nationalization of foreign-owned businesses.

      Michael Manley made the same mistake in Jamaica in the late 1970s and just as it spelled doom for the Jamaican economy, it will spell doom for Cayman’s economy as well.

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    9. its seems we are trying our best whats the bestand good for cayman,but unfortunately,they are so desperate and trying their very best to do something,but suddenly they are just keep making such a vey bad move,because most of them,have a such a politician attitude,and most of this people have such a very high pride of attitude ,no one knows how to humble in such a christian community,where is the christianity way on this island,they full of so much hatred of foreigners,because they always put on their mind that foreigners investor in their country was such a bad thing,try to accept that with out this foreigner investor their counrty is very nothing,every country needs help,every country need foreigner investor to help them,every country have different different nationality you might be born to cayman island thats why they call caymanian,but caymanian dont own cayman island its from GOD,and if caymanian dont accept that someday the cayman island will going to swept out in the map because of they hatred if mother nature strike back to all of our hatred behavior,and very suddenly the new generation also is getting that behavior also in such a young age,somebody told me in the supermarket plenty f words and go back where i come from becuase i told him in the corner side to stop doing the bad thing that he was doing,LET US BE REAL CHRISTIAN,STOP THE HATRED AND THE POLITICIAN BEHAVIOR,LET US UNITE FOR THE GOOD INTENTION,TRY TO LEARN TO BE HUMBLE ACCEPTANCE.theyre so much bad thing going on in this world and most of them come from mother nature that even scientist dont know how to explain,lets not wait for our turn that the mother nature strike us back,THINK……..

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    10. Mr.Miller is right. The only business of the Cayman Government is promoting the interests of the Cayman people. Not foreigners. Not even foreigners who have been here for a long time and have become paper Caymanians.

      They should have no rights here. Their forefathers were not forced to go to sea leaving their wives and children at home. Because the island was too poor to sustain them in work in Cayman.
      Their mothers did not have to scratch out a living making rope and baskets by hand. They never had to use smoke pots to hold at bay the billions of mosquitoes that used to plague this beautiful island.

      I am originally from England. When I moved here 30 years ago there were less than 5,000 foreigners here including me. You could see Caymanians hard at work everywhere. Now the average tourist can spend their entire vacation here and the only Caymanian they see is at airport immigration.

      It is time to turn the clock back.

      Paper Caymanians

      Let’s start by cancelling all Caymanian status. This should include that held by foreigners who married a Caymanian, even if they have been married for years and have children together. Everyone knows perfectly well they only got married so they could live and work here.

      Work Permits

      Effective immediately let’s stop issuing new work permits. Also no more one year renewals. Instead give every foreigner a deadline of one year to leave. Thus, if they have one month left on their work permits, extend it for 11months.
      This gives every foreigner a full year to sell their home, cars and whatever else they cannot take with them.
      By May 1, 2012 there would not be a single work permit holder in Cayman.

      Foreign business owners

      Give them also one full year also to sell their business interests. Since the only possible buyers would be natural born Caymanians there will be some incredible bargains out there. Since funding will be problem, prices will be driven down further. To the level that local Cayman owned banks will feel secure in lending to inexperienced business owners.

      A year from now Cayman would be cleansed of all working foreigners who have been taking Caymanian jobs.

      Of course Government revenue will be slashed too. No more work permit fees. No more foreign attorneys paying 50,000 a year or maids paying 3,000 a year.

      Import duty would be slashed too. Half the population requires half as many goods.

      Tourists would still be welcome and Caymanians would be cooking and serving in Caymanian owned restaurants. Caymanians would be able to work as maids and gardeners in Caymanian owned hotels.

      While government revenue would be down some 75% there would be less people to take care of. The roads would be traffic free and people would have snapped up some fabulous homes at bargain prices

      Like this idea? Just click below.

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    11. You Know I used to love this place and think of the Cayman as Paradise. But after being faced with so much animosity as a foreigner and hearing of all the Hatred that Caymanians have for any other Nationality. I am really starting to get to the point of disliking the place. The prejudice that is abound in the Cayman Islands is downright offensive at this point. I now agree with you all and think that everyone that was not born a Caymanian needs to leave you folks to your own. I wasted a ton of money investing into a home on your great Island because I thought it would be a great place to live out my older years and at one point thought the Cayman People were God fearing, loving and kind. I was completely disillusioned by a people who smile in your face until they have what they want from you and then are ready to kick you to the curb which is truly a trait of the devil. Cayman is not the only place in the Caribbean or the world with great beaches. I really hope you get everything you’re asking for and find yourselves by yourselves You all say how much you hate foreigners on your island yet you still want tourists to come there and spend money, what hypocrites. What a shame, as a black American man I have faced a lot of prejudice and animosity in my life and I thought the Caymans would be peaceful place to get away from that foolishness, how wrong was I to think Caymanians were different.

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    12. Dear NJ2Cay
      I sympathize with your sadness. But imagine if roles were reversed. Americans complain bitterly about Mexican laborers getting into the USA to take jobs that no American wants.

      Now imagine if 300 million hard working, educated Chinese people moved to the USA and owned most of the nice homes, had most of the best jobs etc.

      How would the average American feel then?

      The USA government only cares about Americans, and so it should be. Especially about rich Americans who support their election campaigns.

      Things would really change here if all the working foreigners left. But the Caymanians are a tough people. This place will not collapse.

      And if the off shore financial sector here closes down, so what. It is about time Cayman ceased being a refuge for tax dodgers and insider traders.
      And the Caymanians employed there would soon find new jobs as cooks, waiters, gardeners and maids.

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    13. History shows that protectionism never works in the long term. For economic growth Cayman needs investment of capital which has to come from outside the islands.

      Scaring off investors with repeated chopping and changing of the ground rules is not really a secure path to economic growth.

      There is a minority here who don’t particularly want economic growth and would like to go back to what they remember as a simpler, bucolic idyll before Cayman’s finance and tourism economy developed. That’s a valid aspiration, but you can’t have the lifestyle without the economy.

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    14. Longtermresident, you say that the US only cares about Americans, that may be true in some instances but that fact Is that they only care about Money. If they were so concerned about American they wouldn’t allow most of the largest Companies to send so many Jobs overseas, now these are people taking jobs that Americans want, without contributing to any US community, Paying US Taxes or even stepping foot on US Soil. Governments all over the world have their own agendas and most of the time it has nothing to do with what’s best for the people. One thing a lot of people do not realize about the US is that it’s a melting pot where everyone’s ancestors come from somewhere else, some by choice and some by force. I agree that things would change in the Caymans if every foreigner left but it’s still a shame the way people from a different country are looks upon. I myself haven’t taken anything from Caymanians I have never worked on the Island or owned a business, I am also not a Tax Dodger as I have always paid my Us Taxes as I am supposed to do. The land I purchased in the Caymans was a brought from a Caymanian who inherited it from his parents and said it was useless unwanted land, but when I made something out of it, people looked at me like I committed a crime to the Caymanian People and I’m accused of taking something away from Caymanians. If you don’t want foreigners owning land there, you shouldn’t sell it to them. Feel free to send any Caymanian willing to buy the land my way, I will give them an excellent price most likely a fraction of what was invested into it.

      As for Caymanians finding jobs as Cooks, Waiters, Gardeners and Maids if the Financial Sector closes down and foreign investment leaves. Well if that’s what they want for their Children’s future, more power to them.

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