Make no mistake — that is very good news for Cayman’s economy.
Last Friday, the Compass ran a front-page story on the government’s annual economic report from the Economics and Statistics Office, which contained a dizzying array of figures for the year 2014, including on Cayman’s gross domestic product (up 2.1 percent), overall unemployment (at 4.7 percent), Caymanian unemployment (at 7.9 percent), total visitors (up 16 percent), air arrivals (up 11 percent) and cruise arrivals (up 17 percent).
At the same time, the government released another report showing that Cayman’s consumer price index, which is used to measure inflation, declined by 0.4 percent in the first quarter of 2015. Finance Minister Marco Archer attributed this deflation to falling oil prices, which are far beyond Cayman’s control.
Trotted out all at once, those assorted facts and fluctuations are enough to combust calculators and crumble crania.
Broadly speaking, in order to assess accurately the state of Cayman’s economy, we need not trouble ourselves with more than a handful of key statistics:
- The number of work permits
- The total population
- The amount of imports (except for oil and gasoline)
If those indicators are trending upward, which indeed they all were during 2014, then Cayman’s economy can be said to be growing.
Of the three bullet points we list above, the one likely to attract the most disagreement is the first. We can hear the indignant rejoinder now, “Immigrants steal jobs from locals.” That, of course, is a myth.
We maintain, and evidence-based analysis supports, the argument that the more people working in Cayman, regardless of immigration status, the better for the overall economy — and the better the overall economy is, the more job opportunities there are for everyone, including Caymanians and non-Caymanians.
When functioning properly, it’s a cycle of positive feedback.
Drawing on other recent headline news, our hypothetical opponents might point to the nearly US$180 million in remittances sent last year from Cayman to other countries (much of that, presumably, from foreign workers in Cayman to their dependents overseas). Isn’t that a clear indication of work permit holders shrinking, rather than expanding, the local economy?
In Thursday’s editorial, we said it is readily apparent that, considering their contributions in terms of government fees and local expenses, expatriate workers have a net positive effect on Cayman’s economy. We shall set aside that truth for now — and accept the narrower observation that outbound remittances, taken by themselves, do constitute a negative line-item on the economy’s balance sheet.
There is a way to stem this capital flight from Cayman, and to un-tether the status of Cayman’s economy from the quantity of work permits: Rather than continuing to treat expatriates as “rented” labor for a specified rollover period, we should transform our immigration regime so that work permit holders are regarded fundamentally as candidates for permanent residence, and potentially full-blown Caymanian status.
In other words, provide expatriates with a clear and level pathway to citizenship, so to speak. (Notice that we do not use terms such as “loose,” “easy,” or “non-selective.” Like academic testing, our immigration criteria should be rigorous and standards-based, but fair and transparent.)
This evolution in immigration ethos would encourage expatriates to keep and invest their money in Cayman. And, as foreign workers — after proving themselves as fit additions to our society — transition to PR status, it would reduce our country’s reliance on work permits and make that particular number increasingly irrelevant to the condition of Cayman’s economy.