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CAYMAN AND BERMUDA: COOPERATION OVER COMPETITION

International 17 Feb, 2020 Follow News

Hamilton, Bermuda

Cruise ships in George Town

George Town, Cayman Islands

Hamilton, Bermuda

Dr. Roy Bodden

By Michael Jarvis

 

A series of articles in Bermuda’s Royal Gazette newspaper over the past week focusing on the Cayman Islands makes for an illuminating read and is an encouraging indicator of shared interest in each other’s development.

Much more of that among the family of British Overseas Territories (OTs) would be welcome.

The five-part series examines a range of socio-economic phenomena in the Cayman Islands, relying on the insights of persons uniquely qualified and connected with the territory.

Topics range from Cayman ‘building more economic pillars’, to questioning if development in the territory is ‘spinning out of control’.

'Most would not believe the poverty in Cayman' posits one article, while another suggests ‘average Caymanian not having a better life’.

The series, however, pivots on a fundamental theme; 'Bermuda and Cayman can combat threats together'.

Looking out for - rather than merely looking at - one another is a way of looking at it.

Caymanian Dr Roy Bodden, author, historian, former labour minister and retired president of the University College of the Cayman Islands, offers informed insights.

His well-documented concerns about the path and pace of rapid development of the territory feature prominently in one article labelled; 'Cayman development ‘spinning out of control’.

“Many Caymanians are alarmed now, because they realise the development is spinning out of control,” Dr Bodden told The Royal Gazette.

“We’re on a treadmill — and if you’re on a treadmill and don’t know what you’re doing, you’re likely to fall off," he said.

Bermuda and the Cayman Islands lead the Caribbean in per capita income, the measure of the average earnings of citizens over a year.

In the Cayman Islands it's around $US 67,000 while for Bermuda the figure is $US 95,000.

Both OTs have populations of around 65,000.

Even more worthy of reflection is the exploration of areas of cooperation between Georgetown and Hamilton.

Critical to this is the sector on which they both rely on to maintain their individual - and joint - development within their economic specialisms; insurance for Bermuda and banking, hedge funds and investment in the Cayman Islands.

Both OTs are world leaders in their respective financial sectors.

The islands are saddled with the rather unfortunate label of offshore tax havens, somewhat of an albatross, which has put them in the firing line of scrutiny as havens for tax evasion which both reject.

Both have been at pains to make the distinction between tax legal avoidance and the illegalities of tax evasion.

The territories' administrative authority - the United Kingdom, the European Union, the Organisation for Cooperation in Economic Development(OECD) and other agencies monitoring the lucrative global offshore financial sector regularly raise issues of compliance with what a bewildering array of rules.

In the most recent case, the Cayman Islands is now facing EU sanctions with the risk of being placed on an EU blacklist for failing to meet the stringent compliance demands.

The government insists that has been diligent in adhering to regulatory requirements as stipulated by the UK and the EU.

Another joint issue facing Bermuda's and the Cayman's financial sector is the demand by the UK for disclosure of corporate beneficial ownership of registered companies.

It was, therefore, encouraging to read Jude Scott, CEO of Cayman Finance, calling for cooperation between the fellow offshore financial centres as they both are frequently having to deal with the same international pressures.

“I think we need to work together and use the talents that are in both jurisdictions to find better ways to address some of these threats and turn them into opportunities, to share the good news about jurisdictions like ourselves," he told the Royal Gazette.

In the article titled ‘Bermuda, Cayman can combat threats together’ written by the paper’s business editor Jonathan Kent, Mr Scott suggested that such collaboration could take place not only at industry level and between Cayman Finance and the Bermuda Business Development Agency, but also at political and civil service levels.

He is further quoted by the  Royal Gazette as saying; “Even though historically, Bermuda and Cayman have seen themselves as competitors, I think there are enough differences between us that we would benefit hugely from working together,” he added.

The appeal for collaboration is particularly timely...and necessary.

The future of the status of the OTs within the ‘British family’ is already being redefined especially because of Brexit.

It was also a factor of the 2018/19 inquiry into future relations between the UK and the OTs by the British parliament’s Foreign Relations Committee (FAC).

That inquiry, the first in over a decade, seems already dated, overtaken the pace and extent of recent political changes in the UK, not least of which are a Conservative government with a much different focus from its predecessor, and the all-embracing Brexit.

A lobby is starting from within the ranks of the ruling Conservative Party for OTs to be represented in the UK parliament. One MP has already indicated that he’s already working on proposals for a nine-seat representation.

There are 14 British OTs and three Crown Dependencies.

However that evolves, but more importantly, in the overall post-Brexit relationship, the Cayman Islands and Bermuda will have a key role to play in shaping it along with their sister territories.

Cayman Finance’s Jude Scott is ‘on the money’ by prioritising cooperation over competition between Bermuda and Cayman.


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