It is now customary to begin any conversation about COVID-19 with the observation that these are unprecedented times.

Policies that were unimaginable a few short weeks ago have quickly become a daily reality.

The same type of radical thinking that has been rightly used to justify border closures, curfews and business lockdowns, must now be applied to helping those who are suffering the consequences of those decisions.

Nothing should be off the table – including direct welfare payments to those left without jobs.

It may go against the grain for a country that values an honest day’s work for an honest day’s pay. But when the right to work has been taken away – albeit for very valid public-health reasons – the equation changes.

Cayman is facing its third major crisis in 16 years – Hurricane Ivan in 2004, the global recession of 2008 and now the COVID-19 pandemic.

Each time, Cayman’s economic structure has resulted in a shrinking labour force, lower consumer demand and a downward spiral that drags Caymanian jobs with it.

Assistance for those impacted by these events remains piecemeal.

Regardless of one’s ideology on social-welfare assistance, this time is different.
This time the government has ordered businesses to shut and consumers to stay at home in the interest of public health.

If these efforts to protect the community at large cause mass unemployment, it is not just a matter of welfare policy that those out of work are supported. It is a matter of fairness and social cohesion.

A report commissioned by the Chamber of Commerce predicts more than 5,000 Caymanians could lose their jobs this year. To put this in context: in 2012, when Caymanian unemployment reached 10.5%, there were fewer than 2,000 Caymanians recorded as out of work.

It is laudable that government has turned around its finances, reduced public debt and accumulated reserves for a rainy day.

It is raining now.

Even Bermuda, which finds itself in a much more precarious fiscal position than Cayman with massive government debt, has found a way to pay every unemployed person, regardless of whether they are Bermudian or expat, US$2,000 each month.

We are not calling on the government to simply copy what Bermuda has done. But it should give pause for thought that governments around the world, who cannot be suspected of having developed socialist instincts, like the UK or the US, are now resorting to direct welfare interventions that seemed unthinkable only a few months ago.

So far, the Cayman Islands government has batted away suggestions that it should follow suit, with the claim that it is simply unaffordable.

A back-of-the-envelope calculation tells us it would cost $90 million to pay 5,000 people $1,500 a month for a year. Not cheap, but not out of reach for a country with a gold-star credit rating and one of the lowest public debt ratios in the developed world.

Loss of revenue from work permits and tourist taxes may yet take a sledgehammer to government’s finances, but the successes of the last seven years mean Cayman is in a stronger position to help its people than most other countries.

While direct benefits of this kind should be an emergency measure for a limited time only, it is clear Cayman’s welfare system as a whole needs a rethink.

Some commentators see the COVID-19 crisis as a kind of portal to another world – a chance to evaluate the direction of our countries and re-examine plans for the future.

Cayman did not need a global pandemic to know that its social welfare support system is in urgent need of reform.

Five years ago, the auditor general released a report that looked into Cayman’s social-assistance programmes. The audit found no overall strategy, no objectives, no priorities, no coordination and, ultimately, no accountability for how $50 million were spent that year.

As then-Auditor General Alistair Swarbrick wrote: “Government has not taken the necessary steps over the years to ensure it is providing assistance in the right amount to the right people at the right time, and thus [is] ultimately failing the people they are supposed to serve.”

The current crisis shows little has changed structurally since 2015.

Taxi drivers and tour operators may receive some ad hoc support. Others are told to raid their pension savings.

Cayman needs a social assistance programme that leaves no ambiguities as to who deserves aid and under which circumstances, with a coherent structure that supports Caymanians when they need it most.

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1 COMMENT

  1. The job loss situation will have a ripple effect. Less jobs means less spending and eventually it will hurt the government coffers by virtue of less duties received from imports as the demand of goods will shrink as well as other areas which derive income for the government.
    A domino effect.
    The way I see is there is bound to be a shrinkage in funds. The government gives, the money goes. They do not give still the money will go as less money will be received from whatever sources the government derives its income from. Be it import, be it sale of real estate or anything else. The fear in people’s mind do change their spending habit. When there is stability, everyone knows there will be a pay check down the line, one spends more liberally. Both ways the bottom line will be hurt.One way you will see it today, the other way you will still see, but a little later.
    It is a catch 99.
    The administration has to decide which route to take. There is a proverb in the Indian language. Translated it means “ you kill the snake but do not break your stick in the process.
    Let us be optimistic. The Government has done a good job and will continue to do so in the future.
    We should all rally behind the administration.
    As the saying – of the people, by the people, for the people.
    God bless