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Our government's financial mess

Discussion forum for expats moving to or living in the Cayman Islands.

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Our government's financial mess

Post Posted: Tue Mar 11, 2014 9:20 pm

This is a piece I posted on my blog in December, under the title "More trouble in paradise". It was addressed to local readers, but it is a useful update to my past comments on Cayman's political situation. Our private sector remains a sophisticated and efficient provider of international financial services; but our wretched government is a mish-mash of populist politicians with little awareness of the "offshore" sector, and a heavily bloated Civil Service that operates an old Soviet-style bureaucratic empire. Altogether, they devote themselves to raising revenue to waste on grandiose vanity projects.

More trouble in Paradise
Government’s financial mess has us all worried, who care what happens to Cayman. Certainly there are many, many more worried long-term immigrants than there used to be. Whenever two or three of us are gathered together, the mood is sombre. Collectively, we aren’t feeling as comfortable as we used to do about the economic future.

Of course I can’t speak for the whole community of veteran expats, or for the current community of tax-haven expats; but it’s no secret that there is a general loss of confidence in the ability of our local rulers to fix the mess. The FCO probably has the ability, but does it have the will? Its attention tends to wander, where its colonies’ internal affairs are concerned.

The loss of confidence among long-term expats may soon reach critical mass. The endemic xenophobia of a large portion of the ethnic Caymanian community is a large factor. It is oppressive, and there are no signs of its abatement. Despite some reformist mumbling in the six months since the last general election, nothing has changed. Political interference with the private sector’s independence will continue as far ahead as we can see. So will the anti-expat sentiment that drives our Islands’ immigration policy.

Let’s be honest about it. Public-sector employment will not be reduced: its heavy hand will not be lifted. State-owned enterprises will not be sold to private investors; state-operated services will not be outsourced. Corruption will not be curtailed; cronyism and nepotism will not be suppressed. The Public Debt will not be paid down to any significant degree; unfunded government pensions and medical expenses will stay unfunded. The rollover policy will come and go according to the whim of the moment.

Last month, there was a bit of a kerfuffle in Bermuda, when a local independent Commission on “Spending And Government Efficiency” (SAGE) reported its findings. Huh. They must lead sheltered lives up in Bermuda, for the findings wouldn’t have surprised anybody in Cayman. It’s an interesting read, though. Google SAGE Report Bermuda for the full Report and its 17-page Executive Summary.

The FCO may well decide on a similar Commission for Cayman – although ours would NOT be truly independent. ALL our existing Commissions are overseen by a shrewdly appointed “safe pair of hands”. Our politicians and senior Civil Servants are highly skilled in the suppression of independent opinions. My own experiences on our Human Rights Committee and Vision-2008 exercise can testify to that. Actually, a perusal of SAGE Bermuda’s Executive Summary shows many similarities with Vision-2008, whose reports and recommendations have been gathering dust since January 1999.

If a SAGE Cayman Commission were to be appointed, its first job should be to substitute Cayman for Bermuda throughout the entire Bermuda report. Nine tenths of the work would thereby be done. For the remaining tenth, it could simply dust off all the relevant Vision-2008 Reports and Minutes and slot them in where appropriate.

(The Minutes recorded what was agreed and what not, at least on the two committees I composed the Minutes for. However, the final Reports were subjected to skulduggery, and did not always reflect what had been agreed in the Meetings.)

Sigh. I wonder whether the FCO clerks would be prepared for all the shenanigans that would lie in wait for them. Almost certainly, not. The existing waste-of-space Commissions – on Corruption, Human Rights, and Standards in Public Life – have bamboozled our colonial masters successfully; small chance that a fourth one would be any different. [END]


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Re: Our government's financial mess

Post Posted: Wed Jul 02, 2014 12:54 am

Just a quick update. Our local rulers are now toying with the idea of privatisation. I approve of that in principle, but in practice there are dangers. I blogged about this just last month (June), making particular reference to the government-owned and -operated Turtle Farm, which has for decades been a bottomless pit for Public Revenue and a wonderful source of corruption. Here are a couple of paragraphs from the blog-post:

This Turtle Farm is several things: a commercial farm, an endangered-species refuge, a tourist attraction with bells and whistles, and a zoo with a snack shop. It occupies a block of prime sea-front real-estate, which is the only thing that any private investor is likely to be interested in. All the operations could and would be closed down in a month, if private-sector standards were applied – but will almost certainly take a year or more using civil-service standards. Full privatization of all unnecessary government operations will take the best part of a generation.

Of course selling state-owned assets is a one-off fix at any time, and when bureaucrats are involved in the selling it’s an invitation to fraud on a massive scale. It’s how Russia ended up with so many overnight billionaire oligarchs. It created a few billionaires in Britain, too, during the Thatcher years. The amounts are smaller in Cayman, but there are plenty of bureaucrats and cronies panting for the chance to pick up government assets for cents on the dollar.

The whole article can be seen on my blog - which I think is available via my EF Profile.


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