Cayman's Economic Slide Prompts Expat Departures

Caymannetnews

16 March 2001

This story is reproduced by kind permission of Cayman Net News at: http://www.caymannetnews.com

If there is one vision which is conjured up in the average 'Cayman watcher's' mind - locally and overseas - is that of a place that is vigorous in every way and that it's 'business as usual'.

Oddly though, in recent days, the very people and entities accustomed to touting the virtues of Cayman's robust business climate, are silent regarding the state of the economy, which continues to slide.

We refer to the associations representing the banks, off-shore companies and insurance management companies, accountants, the Cayman Islands Chamber of Commerce and the two tourism associations, which have agreed to merge at the end of this month.

While it may seem prudent by these august bodies representing the two present pillars of the economy, the absence of their concerns is either a continuation of their traditional apathy or a reflection of their own inability to be responsive to matters which could have long-term effects on the country's economic future.

Quietly, ever so quietly, a surprising number of residents are making plans to depart from the Cayman Islands, citing a continuing drop in business, and no hope for them and their families being accepted as residents - or getting security of tenure - after having spent over 10 years or more in this country.

It is at times like these, when no one is saying anything, except those who are feeling the pinch, that rumors have a field day. Instead of waiting for these to subside, Cayman Net News, in trying to separate truth from fiction over the past week, has talked with a considerable number of business leaders, and have heard without exception - that the economy is definitely in a slump; business is bad and the future is not looking bright

There is a considerable amount of nervousness surrounding the delayed budget.

It has also been reported that the outstanding development in the growth of companies on the register for the fiscal years 1999 and 2000, has been replaced with a worrying reduction of renewals.

The Cayman Islands is often compared to Bermuda, a sister overseas territory. What is forgotten though, is that Bermuda, for many years prior to Cayman, has been through many trials and errors to earn the respected position it has in tourism and finance.

Bermuda, also because of its ability to recognise the need to be advanced in offering offshore investors what they need in terms of services and communications, has forged ahead by capturing a multi-million base of emerging e-business.

Governments of other emerging 'offshore financial centres' are also spending hundreds of millions to catch up and stay in the race for Internet technology as a new way of doing business.

In the same way that a plant accustomed to turning out a particular type of vehicle for years and years has to be retooled to meet its competition head on, so too should the Cayman Islands, with the help of its partners in finance who have come here and have done so well.

The story is well known. Many years ago, the ailing Chrysler Corporation was faced with shutting down many of its plants, retrenching thousands of workers directly and indirectly associated with it.

Chrysler's then leader, the physically big Lee Iacocca, went to the Federal Government and the big name banks in America, and put forward a plan for refinancing, which gave the company's ailing balance sheet the time and financial resources needed to put the company on the sound footing it needed to face its competitors.

Mr. Iacocca sold the idea, and paid back every cent, long before it was due.

Instead of trying to stretch or trim the resources of the Cayman's Islands which are already so obviously strained in personnel and revenue, a Chrysler plan needs to be put in place now.

And those with the authority to negotiate should take the bold step and deal with those who have become quite wealthy financial Cayman entities.

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