September 18, 2020

Rollover the Rollover

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Firstly, I would like to say thank you to numerous well wishers who in some way regard my fierce criticisms of the rollover policy over a number of years as having resulted in the two year suspension commendably announced by the Premier earlier this week. However, I would like to say plainly that however well intentioned these comments, nothing could be further from the truth. What is the truth is that the predictions that the rollover policy would have a catastrophic effect on the financial services industry and the local economy made by me, and others, for over a six-year period probably had no discernable effect whatsoever. Whilst it was clear as far back as 2005, that the well intentioned representations of Ms Bodden Cowan as to the application of the policy would not be met in practice, nevertheless the criticisms fell on stony ground because there was and remains a fundamental misunderstanding of what is required to develop both substantial presence in the financial services industry, particularly post the 2008/2009 financial crisis, and a strong local economy. The simple fact is that it is only when the rollover policy and the exodus of some 14,000 high earning, high spending expatriates caused devastating hardship to the local economy and to the small businesses owned and operated by Caymanians that both the PPM and the UDP leadership saw the true nature of the writing on the wall and were obliged to suspend the rollover.

 

We should take a win, however, for whatever reason we get it but, rather than rejoicing overmuch at the suspension of the rollover, calm consideration needs to be given to the review by the Commission and to developing the legislation and regulatory system that will replace it. We are not encouraged by the comments of Mr Ezzard Miller who continues to attribute the downturn in the financial services industry and the local economy to macro economic conditions. He is right in that a deleveraged economic environment will create fewer transactions and less of everything and that will filter down into less Government revenue and less private sector spending in the economy. But he is wrong in that the rollover policy has substantially enhanced the negative effects. Playing populist politics by appealing to the xenophobia of a misguided local population will do nothing to ensure that the right solutions are introduced in good time.

 

No one inside or outside of Government is going to solve this issue by pouring fuel on the fires that drive the local concerns. Rather, we need a measured consideration of the legitimate concerns of the Caymanian people and particularly, on the subject of when and if a visitor to the Island must necessarily obtain full rights of abode, the right to work and the right to vote. It can be said with certainty that there is phenomenal confusion on these points. These rights normally characterised as the rights attributable to citizenship have in the context of the Cayman Islands nothing whatsoever to do with the grant of a British Overseas Territory passport, rather they are attributes of Caymanian Status, and so it follows, much of the United Nations comments is also misguided. It should be perfectly possible to grant to certain high net worth individuals, subject to minimum investment criteria, and for financial professionals bringing financial activities and employment opportunities to the Island a 25 year work permit which, since it remains a permit for that period and the holder therefore subject to a condition, would preclude obtaining vested rights to Caymanian status or otherwise. After a 25 year period of integration into the community, and subject to appropriate tests evidencing commitment to the Islands, even the most hardened xenophobe ought to be persuaded that the individual concerned has brought sufficient benefit to be welcomed on a permanent basis. It is highly important for the future of the Cayman Islands financial services industry (and no less important as the tourism and other industries as may be) that there be considered debate on these points using the excellent opinions of leading QCs on the issue of citizenship in the Cayman Islands as the start point. It is, and has always been, wholly unrealistic to suppose that an indigenous population of 25,000 can generate sufficient job opportunities to employ 600 school leavers a year. Politicians now, in the light of the accord reached between the UDP and the PPM on the need to suspend the rollover, need to show mature leadership on how best to integrate high net worth individuals and financial professionals into the Cayman Islands to ensure that Government revenues may be maintained at levels that will provide for civil service funding and capital expenditure and that as many job opportunities are created in the private sector as in the public sector. Only in this way can the Cayman Islands be assured of future success and stability in a crime free environment.

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