Cayman’s pathway through the unchartered waters of the Covid-19 pandemic has been remarkably successful so far, in terms of keeping the population healthy and safe. While some countries will be grappling with the economic impact of the pandemic for decades to come, Cayman’s Finance Minister Roy McTaggart, said, so far, the country’s finances had been spared the worst. Considering the hit the economy has taken to its tourism industry, its second most important driver, Mr McTaggart was satisfied that Cayman’s finances were in pretty good shape.
He said he felt he had done a credible job in keeping the country’s finances secure and safe and managed in a fiscally responsible way, despite the considerable financial impact the pandemic could have had.
As Minister for Finance and Economic Development, Mr McTaggart, who is the MP for George Town East, has led the country’s finances for the past four years, having served as Councillor to the Ministry of Health before that, following his retirement as Managing Partner of KPMG Cayman Islands.
Up until the pandemic, Cayman’s finances were going well, with debt being paid, no new taxes introduced and wise spending, he stated.
“We did that right up until the pandemic, when everything went into disarray,” he said.
Government then saw a huge upswing in additional demands in order to assist people who were displaced and out of work and who, he said, were “in quite dire need” of assistance from the Government. The Government was then forced to repurpose considerable amounts of funding, as a result.
“Just through the end of last year we had spent more than CI$65 million on Covid-related expenditures, a good portion of that was for tourism displaced workers,” Mr McTaggart said. “But we still continued to manage the affairs of the country well to see it through the crisis and at the end of the year they ended up at a far better position than expected.”
Right now, the country is in as good a place as it can be from a financial standpoint, Mr McTaggart said.
“We still have significant cash reserves and we are now benefitting from the period January to March when revenues from financial services and licensing of businesses, etc. are coming in. It’s a very substantial sum, in excess of CI$100 million this year for the first time. At our current rate of spending we think we have a safe cushion that will see us through most of the year,” he said.
Of course, the economy needed to be continued to be carefully managed so that in a worst-case scenario Cayman was still able to assist those who were back at work and protect and support the most vulnerable among us, he said.
Mr McTaggart said it was clear what the immediate issue would be, should he be reelected.
“First and foremost, the focus for us will be on keeping our people safe, healthy and secure and so we plan to manage the reopening of the country to tourism in basically the same way as we have managed ourselves through the Covid crisis,” he said. “We are treading in unchartered waters and we have not seen a country yet that has been completely successful in reopening, and so we will tread carefully learning from others what has worked and what has not.”
Mr McTaggart said the Government would be led by the science and by the medicine, and this stance had stood them well through the pandemic. Once the country opened up again and tourism started to return, the focus would be on getting people back to work and having them earn a productive wage as soon as they could.
“Then we will start to return the country’s finances back to the stability that we had in the months leading up to the pandemic,” Mr McTaggart stated. “That is going to take some time for us because I do not anticipate that once the borders reopen its going to return to normal; that’s not going to happen.”
Instead, he anticipated a gradual building of the process, with the primary focus being stayover tourism, with cruise tourism expected to return more slowly.
“There are indications that won’t happen until 2022,” he believed. “But stayover tourism is where Government gets a lot of its revenues. That’s the most important element for us. There will be pent up demand for travel and it is hoped that with the vaccine rollouts in our source markets and here at home that there will be greater confidence in the safety to travel. I hope by the middle of the year we see tourism return to the country and people can return to work.”